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Equity in sentence

1327 examples of Equity in a sentence

Of course, so long as the US runs annual current-account deficits of almost a trillion dollars, it will need to borrow from strategic rivals such as China, Russia, and unstable Middle East petro-states, which increasingly will lend in the form of high-yield equity investments rather than low-yield T-bills.
So unless the US starts to save more, it will find it hard to complain about the form – equity rather than debt – that the financing of its external deficit takes.
Such institutions thrive on cheap credit, which enjoys more favorable treatment than equity financing under most Western tax regimes.
Corporate leverage in China rose from 2.4 times equity in 2007 to 3.5 times last year – well above American and European levels.
One in five listed corporations carries gross leverage of more than eight times equity and earns less than two times interest coverage, weakening considerably these companies’ resilience to growth shocks.
While these attempts to revolutionize the equity capital markets have yet to gain widespread traction, their very existence is evidence of the opportunities for disruption in this sector.
Such possibilities include livelihood insurance, home equity insurance, income-linked loans, and GDP-linked and home-price-linked securities.
The rapid growth in America’s gross liabilities to the rest of the world is apparent in US Treasury data on foreign holdings of US securities, which rose from $9.8 trillion in 2007 to $17.1 trillion by June 2015, of which $10.5 trillion was debt and $6.6 trillion equity.
But it also comes down to this: how much loss-absorbing shareholder equity is on the balance sheets of the largest financial firms?
In the run-up to the 2008 crisis, the largest US banks had around 4% equity relative to their assets.
(Here I’m using tangible equity relative to tangible assets, as recommended by Tom Hoenig, Vice Chairman of the Federal Deposit Insurance Corporation, and a beacon of clarity on these issues.)
Now, under the most generous possible calculation, the surviving megabanks have on average about 5% equity relative to total assets – that is, they are 95% financed with debt.
We should want a lot more loss-absorbing shareholder equity.
Building support for legislation to simplify the biggest banks would greatly strengthen the hand of those regulators who want to require more shareholder equity and better regulation for the shadows.
Because equity-backed debt has been issued to China’s highly leveraged corporate sector, the decline in stock prices has triggered collateral calls and forced asset sales, putting further downward pressure on equity values.
In order to limit a negative overshoot, Chinese policymakers have been talking up the strength of equity markets, while shoring up and expanding credit channels for the private sector, particularly for otherwise healthy and creditworthy small and medium-size enterprises, which remain disadvantaged relative to their state-owned counterparts.
Whether the government will intervene directly in equity markets remains to be seen.
Banks that grant risky loans on too little equity illustrate the analytical value of homo economicus particularly clearly.
Their profits are privatized, but any losses exceeding their equity are dumped on their creditors, or, even better for them, on the taxpayers.
Here the key issue is leverage, or how much banks are allowed to borrow relative to their equity, and the temptation that policymakers face to allow banks to borrow more, particularly when times are good and asset prices are rising.
In addition, the executives’ pay is typically based on return on equity, unadjusted for risk.
Its equity markets have been discredited.
That, together with diminished growth prospects, would depress equity markets, and declining employment and household income could lead to a sizeable loss of GDP in both the US and China.
Such episodes are bad for everybody – workers who lose their jobs, entrepreneurs and equity holders who lose their profits, governments that lose their tax revenue, and bondholders who suffer the consequences of bankruptcy – and we have had nearly two centuries to figure out how to deal with them.
The collapse from 2007 to 2009 of equity, credit, and housing bubbles in the United States, the United Kingdom, Spain, Ireland, Iceland, and Dubai led to severe financial crises and economic damage.
For now, policymakers in countries with frothy credit, equity, and housing markets have avoided raising policy rates, given slow economic growth.
The equity bull market is now six years old.
And when it does, pension funds and insurance companies will be more exposed than ever before to volatility in the equity markets.
If the combined effect of steep losses in equity markets and rising dependency ratios cause pension funds to struggle to meet their obligations, it will be up to governments to provide safety nets – if they can.
The Fed vs. the FinanciersIn his August 31 address to the world’s most influential annual monetary policy conference in Jackson Hole, Wyoming, United States Federal Reserve Chairman Ben Bernanke coolly explained why the Fed is determined to resist pressure to stabilize swooning equity and housing prices.
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