According to the New York Times, the drop in oil prices are dimminishing one of the few big bright spots that banks have enjoyed since the financial crisis. The reason is that banks have been experiencing a lending boom to companies in the nation’s energy industry.
1. Which banking group has the greatest investment banking revenue from the oil and gas sector in 2014?
2. What is the prediction of analysts if oil remains at or below $50 per barrel for long?
3. What is the underlying collateral of most energy loans valued at?
4. What do advisors predict will happen to the yield on energy junk bonds for 2015 & possibly 2016?
Corkery, M. and P. Eavis. (2015). As Oil Prices Fall, Banks Serving the Energy Industry Brace for a Jolt. The New York Times, January 11 (Retrievable online at http://dealbook.nytimes.com/2015/01/11/as-oil-prices-fall-banks-serving-the-energy-industry-brace-for-a-jolt/?hp&action=click&pgtype=Homepage&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0)