Moderate Optimism, Eying Risks

VOL. 38  NO. 1

The New Year starts with renewed geopolitical tensions and wars, as well as near-term uncertainty about monetary policies—despite these factors, not necessarily pessimism. Going over the forecasts from major financial institutions and listening to their presentations, your editor felt a sense moderate optimism. And yet, much has changed in just a year concerning interest rates and growth predictions.

For example, the new reality of high-interest rates is still setting in for many businesses, even if 2024 could sign the beginning of lower growth in some key advanced and developing economies. The cost of debt for companies and sovereign governments is still high, and there is not a clear idea when—or how much—this may change.

This month’s cover story on private lending shows a booming industry attracting more interest from commercial banks. It focuses on the upcoming and growing risks for borrowers due to higher interest rates—and by extension for the lenders that serve them. Two other stories in this issue, with different angles, deal with specific niches within the financial sector: Gilly Wright’s on AI in Finance and our Salon with Sonny Singh, executive VP and general manager at Oracle Financial Services. Each story offers insight into key areas of growth (and risk) for financial services in the years to come, and on the ever-growing role of technologies like AI.

This issue includes also our annual Foreign Exchange Awards, named in honor of our late colleague Gordon Platt, who was our in-house expert on the sector for many years. The shifting winds of globalization make this a a very dynamic sector—trading solutions were key for most of our winners—while technology has evolved into a more precise tool for handling currency fluctuations and given a rocket boost to speed and capacity of executions.

Andrea Fiano | Editor at Large