Experts Explore Global Debt Market at BB&T-COBE Event
The nuances and the fundamentals of the global fixed-income or bond market were the topics for a team presentation Friday by Mary Rose Carosia and Theresa Werner of Standard & Poor's Capital IQ, kicking off this academic year's Radford University Global Capitalism Distinguished Speaker Series, sponsored by BB&T.
Carosia, vice president for Enterprise Solutions, and Werner, senior director for Global Sales Operations, took the College of Business and Economics (COBE) faculty, staff and guests behind the scenes at S&P, a financial intelligence service provider that analyzes and values the vital fixed-income market in which sovereignties, supranationals, state and municipal governments raise money.
The 2012 Global Capitalism Distinguished Speaker Series included two events Friday: a luncheon in the multipurpose room of the new COBE building and a lecture in the Hurlburt Student Center auditorium.
"Ratings agencies provide standardization for the credit market," Werner said. "It is an opaque market with few transactions, but a lot of money flows through it."
Werner said the growth of the bond market has surpassed that of the stock or equity market in the last 12 years and is now valued at $79.3 trillion, while the global stock market is valued at $57.2 trillion.
"For us in fixed income, it is all about assessing and managing the downside, the doom and gloom. In bonds it is about risk. In stocks, risks and rewards are both assessed, but for us it is what could go wrong," Werner said, adding that S&P's analytic technology and experience track $30.1 trillion worth of debt instruments for clients around the world.
"The most important thing is data," Werner said. "And it is not necessarily financial data, either. We need to have accurate, reportable information that goes back to its original source."
Carosia, whose experience includes managing large data implementation projects, shared some insights into the fixed-income market. She called data showing the preponderance of debt floated by the American and Japanese governments—one third of the $68 trillion developed country debt market—"interesting." Government debt accounts for about a fourth of the $9 trillion emerging debt market.
She also characterized S&P's process of analyzing the market as "disciplined, transparent and yielding market-driven, independent evaluation."
While detailing S&P's exhaustive rating process, Werner cited Radford University's recent on-time, under-budget completion of the COBE building, saying, "Ratings agencies love that. It shows that the team here has good management skills."
The 2012 Global Capitalism Distinguished Speaker Series is an ongoing project between BB&T and COBE to stimulate thought and discussion about capitalism, the tenets of free enterprise and the best practices of successful organizations.