The phenomenon whereby widespread bank distress depresses sovereign bonds values, turning into a self-reinforcing downward spiral, has been weakened due to the actions of the European Central Bank (ECB), according to an academic study.
Capital
Covid-19 pandemic sees FINMA identify new risk to financial institutions
The Swiss Financial Market Supervisory Authority has identified possible Covid-related defaults and adjustments to corporate loans or bonds a new key risk to financial institutions.
Higher capital buffers give banks more flexibility to recover collateral
Banks have entered the current crisis much better capitalised than the last one, meaning they may have the luxury of timing when it comes to realising collateral on the coming surge in non-performing loans
US agencies finalise capital treatment for holding TLAC debt
US federal regulatory agencies have finalised a rule requiring more stringent capital treatment for bank holdings of total loss absorbing capital (TLAC) debt to limit contagion risks across the banking sector.
BCBS mulls strengthening Basel framework following Covid-19 impact
The financial impact of the Covid-19 pandemic on banks could see the Basel Committee on Banking Supervision review parts of the Basel framework, with the BIS’ Agustín Carstens offering some clues as to where tweaks might be made.
Digital currencies pose financial stability dilemma for central banks
Digital currencies are a brave new frontier for central banks and could confer many benefits to the economy, but there are also a number of prudential concerns that must be addressed before they are unleashed on the financial system.
Congressman attempts to exclude PPP loans from asset calculations
A bill has been introduced in Congress that would require federal banking agencies to exclude paycheck protection program (PPP) loans from certain asset calculations for small banks to ease their regulatory burden.
Basel Committee ready to pursue more Covid-related measures if needed
Banks could get more regulatory relief should the Covid-19 pandemic prove particularly damaging over the winter period with many employees having to work from home again, the Basel Committee on Banking Supervision said.
FSOC warns over Fannie Mae and Freddie Mac financial stability threat
The government sponsored enterprises (GSE) Fannie Mae and Freddie Mac could threaten financial stability and may need more capital according to the Financial Stability Oversight Council (FSOC).
Banks can weather the pandemic storm
Analysts are confident that most banks can cope with the economic impact of a second wave of the Covid-19 pandemic, but they warn that losses could nonetheless pile up
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