Moody's Talks - Focus on Finance

Warren Kornfeld, a Senior Vice President at Moody’s Ratings with expertise in banking, and Farooq Khan, a VP-Senior Analyst also at Moody's and based in London, dive into the intricacies of credit risk transfers. They discuss the balance banks strike by offloading credit risk, exposing both benefits and challenges. The conversation sheds light on counterparty risks, regulatory dynamics in the U.S. versus Europe, and the implications of semi-retail transactions. Transparency and investor concentration are key concerns as these transactions reshape capital management strategies.

In this engaging discussion, Sabih Behzad, the Head of Digital Assets and Currencies Transformation at Deutsche Bank, shares insights on the integration of blockchain technology in traditional banking. He highlights the challenges of interoperability with legacy systems and the importance of user experience. The conversation also tackles the complexities of tokenized securities, the need for strong custodial solutions, and the evolving global regulatory landscape for digital assets. Additionally, Sabih addresses the rising cyber risks and the security measures banks are implementing to protect digital assets.

David Tao, a Banking Analyst at Moody's Ratings, shares insights on global banking systems amidst trade tensions and economic risks. He discusses the resilience of credit conditions despite potential downturns in GDP and business investment. The conversation highlights Europe's modest recovery, the varying stability of banks in different countries, and the impact of geopolitical tensions, particularly in Asia-Pacific and the Ukraine situation. Tao emphasizes diverse profitability trends across regions, providing a comprehensive outlook for the coming months.

Evan Auyang, Group President at Animoca Brands, dives into the transformative world of Web3 and its implications for the digital landscape. He discusses how collaborations among institutions and regulators are essential for mainstream adoption. The conversation highlights Hong Kong's leadership in Web3 innovation, the significant role of stablecoins in modern finance, and the importance of regulatory harmony in ensuring secure digital transactions. Auyang effectively illustrates the push towards user empowerment through decentralized technologies.

In this insightful discussion, Sandip Wadje, Managing Director at BNP Paribas and an expert in financial technology risks, shares his perspective on the challenges banks face amid rapid technological advances. He explores how financial institutions are balancing innovation with security, particularly with emerging technologies like blockchain and AI. The conversation dives into the pressing cybersecurity risks in the financial sector and underscores the importance of navigating compliance amidst outdated systems, emphasizing a collaborative approach for future resilience.

We discuss the outlooks for digital finance and cybersecurity. Tokenization and digital assets will gain traction. Meanwhile, cyberattacks will likely be more frequent and more personalized.Speakers: Cristiano Ventricelli, VP-Senior Analyst, Moody’s Ratings; Leroy Terrelonge, VP-Analyst, Moody’s RatingsHosts: Danielle Reed, VP – Senior Research Writer, Moody’s Ratings; Carolyn Henson, VP – Senior Research Writer, Moody’s RatingsRelated research:Digital Economy – Global: 2025 Outlook – Institutions to edge further into digital finance, focus on risk mitigationCybersecurity – Global: 2025 Outlook - Credit risk set to rise as cyber attackers target larger companies

Solid GDP growth in most markets and low unemployment will support finance companies’ profitability and ease asset risks. Moderating inflation will improve most companies’ ability to issue debt.Speaker: Bruno Baretta, VP-Senior Analyst, Moody’s RatingsHost: Michael Porta, VP – Senior Research Writer, Moody’s RatingsRelated research:Finance Companies — Global: 2025 Outlook – Stable with solid economic activity and easing inflation in most markets

Higher interest rates and a favorable macroeconomic environment are among the factors supporting credit strength for insurers worldwide.Speakers: Vincent Del Gatto, VP-Senior Analyst, Moody’s Ratings; Will Keen-Tomlinson, VP-Senior Analyst, Moody’s RatingsHosts: Danielle Reed, VP – Senior Research Writer, Moody’s Ratings; Myles Neligan, VP – Senior Research Writer, Moody’s RatingsRelated research:Life Insurance – Global: 2025 Outlook – Stable on largely favorable macroeconomic conditions, strong capitalProperty & Casualty Insurance – Global: 2025 Outlook - changed to stable as price increases offset rising claims costs

Analysts from Moody's Ratings discuss key outlook drivers including slower economic growth, low interest rates, weak credit demand and ongoing effects of distress in the property sector.  Speakers: Kelly Chen, VP-Senior Analyst, Moody’s Ratings; Frank Yuen, VP-Senior Credit Officer, Moody’s RatingsHosts: Danielle Reed, VP – Senior Research Writer, Moody’s Ratings; Simin Ngai, AVP-Research Writer, Moody’s Ratings Related content: Financial Institutions – China: 2025 Outlook - Negative on profitability pressures and elevated asset risks

We discuss what’s behind our shift to a stable outlook for banking globally in 2025 from our negative outlook in 2024, and unpack some regional differences.Speakers: David Yin, VP-Sr Credit Officer at Moody's Ratings; Maria Cabanyes, Senior Vice President at Moody's Ratings; David Tao, AVP-Analyst at Moody's RatingsHost: Jun Yang, AVP-Research Writer at Moody's RatingsRelated research:Banks – Global: 2025 Outlook - Improves to stable, underpinned by stabilizing economic growth