Phil, please tell our readers a little bit about yourself, your experience and your current focus?
I have been working at NatWest Markets (formerly RBS) for over 14 years but in my current role for the last 6 or so, principally advising EMEA banks and insurers on their regulatory capital raising requirements in the international debt markets.
Prior to this I spent a number of years structuring and executing bilateral cross border financing transactions and prior to my current role was seconded to the Asset Protection Scheme project as part of the scheme design team responsible for negotiating and executing the underlying contractual agreements between RBS and HMT.
My current focus with respect to our banking clients is the ongoing EU harmonisation and implementation of MREL and TLAC, transaction sequencing and navigating prospective regulatory change that may impact issuance planning
Phil, You will be joining Société Générale CIB, NatWest Markets, and HSBC on a panel discussion on expectations for final requirement and timelines for the upcoming year. One talking point will be the impact on issuing bonds, what are your thoughts on this, and what else do you expect to be discussed and why?
My expectations remain fluid, in main driven by the contrasting requirements of European G-SII’s who are seeking to meet a 2019 TLAC threshold and the remaining EU institutions to whom different time lines and requirements may apply. There has yet to be full clarity on the latter and I note further proposed amendments to the CRR, CRD and BRRD – the final timing and outcome of which remains uncertain.
Nevertheless, the technical backdrop to the market remains highly constructive and we are beginning to see evidence of institutions issuing more innovative instruments, designed to achieve harmonised MREL eligibility, but in the absence of final legislation i.e. Santander Group. I expect if this backdrop continues we can expect to see further similar developments.
We are also looking forward to your presentation covering investor appetite in an increasingly saturated market ahead of final rule and implementation. Without giving too much away, what top 3-4 key challenges and points will you be addressing?
1. How would pricing and appetite be affected if the EU was to experience a full blown bank resolution?
2. In broad terms, the existing universe of senior unsecured issuance should be sufficiently large to “re-cycle” into new MREL eligible instruments. However, is there:
(a) Market capacity to accommodate the MREL “multiplier” effect of future RWA inflation?
(b) What is the consequential impact on the secured funding market and could we expect increased balance sheet management activity i.e. true sale securitisation?
3. How quickly can other funding markets develop to provide diversity – what are the principal challenges faced by non-EU based investors in buying bail-inable assets?
Leading into the implementation of TLAC and MREL, what key challenges do you believe will be faced by capital and risk management professionals and teams?
Very simply – the impact of ever changing regulation!
We asked Phil several informal questions and discovered Phil…
- Receives on average 200 emails per day!
- Enjoys chicken paprika and Guinness.
- Rates his memory a 7 out of 10.
- Would take water (smart!), his wife and children, and an endless supply of books if given the opportunity to take three items to a deserted island.
