Bank asset quality to top 2021 ECB supervisory concerns

Among the European Central Bank’s (ECB) top supervisory concerns for this year is the asset quality of eurozone banks, said Fitch Ratings despite the correlation of borrower default rates to macroeconomic shocks falling below historical levels in 2020.

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March 2020 volatility sparks debate over clearing house initial margin models

ISDA is pushing financial regulators to scrutinise margin models at clearing houses after Covid-induced market volatility last spring sent initial margins through the roof, while CCPs sound a note of caution. 

Basel Committee consults on technical tweaks to SFT haircut floors

The Basel Committee on Banking Supervision is proposing to tweak rules on haircut floors for securities financing transactions (SFTs) to address an interpretive issue relating to collateral upgrade transactions and correct a misstatement of the calculation formula applied to netting sets.

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ECB’s aim of encouraging cross-border eurozone bank mergers faces hurdles

Fitch Ratings sees significant obstacles to the European Central bank’s (ECB) desire for cross-border consolidation in the eurozone banking sector to improve resilience.

European banks are robust, but EBA warns over deterioration in assets

The European Banking Authority is concerned about the quality and structurally low profitability of European banks’ assets, despite their solid capital and liquidity positions.

Fed gives US banks greenlight to resume share buybacks

The most profitable US banks have been given the green light by the US Federal Reserve to resume share buybacks this year following a six-month ban relating to the economic effects of the Covid-19 pandemic.

ISDA calls for better calibration on clearing house margins

Although the International Swaps and Derivatives Association has praised clearing houses for withstanding the extreme pandemic-induced market volatility, it is concerned about the significant increase in initial margin seen last year

UK banks allowed to restart dividends as vaccine is rolled out

The UK’s Prudential Regulation Authority (PRA) is allowing UK banks to resume dividend payments after finding that they had shown resilience during the Covid-19 pandemic and could withstand even more extreme economic conditions. 

Large banks were narrowing capital shortfalls pre-Covid says Basel Committee

As of December 2019, which was before the Covid-19 pandemic struck, the Basel Committee on Banking Supervision found that capital shortfalls were €10.7bn for group 1 banks compared with €16.6bn at end-June 2019. 

Biden administration could impact credit ratings related to housing exposures

The incoming Democrat administration of president-elect Joe Biden has the potential to influence credit conditions relating to US housing finance, according to a note from Moody’s Investors Service.