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Equity in sentence

1327 examples of Equity in a sentence

If government becomes a partner, it may well endow the banks immediately with the equity required to sustain their business.
The Hedge Fund HegemonThe recent volatility in global capital markets should give pause to those who say German leaders, who have been arguing for greater transparency in global hedge funds, are just sore losers US and UK policymakers, in particular, say the German whining is nonsense, and that hedge funds, along with other new age financial entities such as private equity firms are key innovators in today’s, global economy.
Seventh, US and global equity markets are frothy.
The rapid rise in house prices until 2006 caused households to increase their spending, financed in part by converting home equity into cash.
The resulting fall in wealth has reduced consumer spending, while the decline in homeowners’ equity prevents borrowing to finance any increase.
As the economists Amartya Sen and Sudhir Anand argued more than a decade ago, “It would be a gross violation of the universalist principle if we were to be obsessed about intergenerational equity without at the same time seizing the problem of intragenerational equity.”
Ultimately, these financial failures reflect the downward spiral of house prices and the increasing number of homes with negative equity, i.e., with substantial mortgage debt in excess of market values.
Negative equity is significant because mortgages in the United States are generally “no recourse” loans.
As homeowners with large negative equity default, the foreclosed homes contribute to the excess supply that drives prices down further.
And the lower prices lead to more negative equity and therefore to more defaults and foreclosures.
Raising interest rates on bank deposits, which are now negative in real terms, would reduce incentives for individuals to pour money into equity markets or real estate, mitigating the risk of asset market bubbles and boom-bust cycles in the economy.
CAMBRIDGE – After the financial crisis erupted in 2008, many observers blamed the crisis in large part on the fact that too many financial firms had loaded up on debt while relying on only a thin layer of equity.
The reason is straightforward: whereas equity can absorb a business downturn – profits fall, but the firm does not immediately fail – debt is less forgiving, because creditors do not wait around to be paid.
Financial firms in the United States pay about 34% of their profits in taxes, and, while they can deduct interest payments to creditors from taxable income, equity is not taxed as favorably.
Most countries have similar tax preferences for debt over equity, thereby encouraging financial and other corporations to use more debt, as financial analysts have long known.
And, yes, tax incentives are not the only – and perhaps not even the most important – reason why financial institutions use a lot of debt and minimize equity.
Government was less likely to bail out equity.
So regulators have focused on command-and-control orders to financial firms to increase their equity, and to reduce the riskiness of their investments.
Were their demand for debt lower – and, in the case of corporate debtors, were they to rely more on equity – financial institutions would face less pressure to use so much debt themselves.
Much consideration has already been devoted to how to reform corporate taxation in a way that levels the playing field for equity relative to debt; more than 20 years ago, the US Treasury conducted a major analysis and devised a plan to do so.
When the Fed flinched at its mid-September policy meeting, they enjoyed a sigh-of-relief rally in their currencies and equity markets.
In doing so, the Fed is relying on the “wealth effect” – brought about largely by increasing equity and home prices – as its principal transmission mechanism for stabilization policy.
In 2010, the last year for which SCF data are available, the top 10% of the US income distribution had median holdings of some $267,500 in their equity portfolios, nearly 16 times the median holdings of $17,000 for the other 90%.
And these deficits are now being financed in riskier ways: more debt than equity; more short-term debt than long-term debt; more foreign-currency debt than local-currency debt; and more financing from fickle cross-border interbank flows.
Investors outside the US can see the magnitude of the trade deficit, calculate the likely decline in the dollar required to eliminate it, and recognize that the interest rate and equity return differentials from investing in the US are insufficient to compensate for the risk that next month will be when capital inflows into America start to fall.
For starters, in equity markets, high-frequency traders (HFTs), who use algorithmic computer programs to follow market trends, account for a larger share of transactions.
But, over time, the longer central banks create liquidity to suppress short-run volatility, the more they will feed price bubbles in equity, bond, and other asset markets.
How do we deal with equity on a global scale when we cannot even deal with it country by country?
True, easy money did help to restore equity prices, but it might also have created new asset bubbles.
Reducing the face value of mortgages and providing the upside – in case home prices were to rise in the long run – to the creditor banks is another way to convert mortgage debt partly into shareholder equity.
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