Trust is a key determinant of interbank activity, says ECB paper

The level of trust is a key driver of activity in the interbank market along with the stability of the country’s banking sector, its counterparties and its history of managing banking crises and failures, according to a working paper by the ECB.

China coronavirus

Coronavirus resurrects China’s bank NPL concerns

To help offset the economic damage from the coronavirus outbreak, Chinese regulators said they will tolerate a rise in bad debt in the banking system, which is seen as suspiciously low by some. 

House of Lords

Slavishly following EU rules ‘would threaten UK financial stability’

Simply passing EU rules into UK law could threaten financial stability and undermine the competitiveness of the City of London, the UK parliament’s upper house was told by senior regulators. 

ESMA consults over reporting standards for equivalence firms

A consultation has been launched by the European Securities and Markets Authority (ESMA) on the technical standards and reporting requirements for third-country firms providing investment services and activities in the EU. 

Swiss banks living wills approved, but some need improvement

The recovery and resolution plans or living wills of the two largest Swiss banks have been given the green light by the Swiss Financial Market Supervisory Authority (FINMA), but some of the smaller institutions need to make improvements.

APRA to scrutinise bank climate change efforts more deeply

Banks in Australia will have to stress test their resilience to financial risks associated with climate change, the Australian Prudential Regulation Authority (APRA) said in a letter.

Sweden testing e-krona

The Riksbank, Sweden’s central bank, is testing the e-krona, potentially bringing the country closer to launching the first central bank digital currency. 

Banks put financial system at risk by not doing enough on climate change

Banks are putting themselves and the financial system at substantial risk by not being properly prepared for climate change-related rules, carbon taxes and the impact on their loan portfolios. 

Flood of corporate bond issuance threatens investor returns

Floods of new corporate bonds coupled with very low interest rates represents a growing risk to investors in some of the world’s largest bond funds, according to asset manager GMO.  

ESMA flags range of risks from geopolitics to bigtech

High risks remain along with a weaker economic outlook as markets remain highly sensitive to geopolitical events, warned the European Securities and Markets Authority (ESMA) in its latest Trends, Risks and Vulnerability report.