An organisation called Global Credit Data has made big strides in providing sufficient loss given default data to banks for corporate loans. Its next step is to drive consistency around internal model outputs. By Justin Pugsley.
Resolution and Recovery
[US REGS] US banks are simpler, but growing tax haven presence a concern
The largest US banks may have simplified their organisational structures, often at the behest of regulators, but New York Fed researchers found the number of subsidiaries in secretive tax havens has risen. Justin Pugsley reports.
Eurozone emergency liquidity measures not fit for purpose
ECB vice president says eurozone’s emergency liquidity measures for failing banks is not fit for purpose
EU needs ‘big bang’ approach to NPLs
A committee of academics advocates for EU authorities taking quick and decisive action to clean up non-performing loans and to provide some debt relief to struggling member states
European Commission proposes measures to speed NPL clean-up
The European Commission recommends focusing on four policy areas to accelerate the clean-up of the continent’s non-performing loans to help develop the banking and capital markets unions. Justin Pugsley reports.
US Treasury advocates a more rules-based bank resolution process
In its fourth report on reforming the US financial system, the US Treasury has once again steered away from advocating radical action. It would make relatively little change to the current US infrastructure for resolving a large failing bank.
Europe’s bank resolution regime finds devil in detail
The EU is establishing non-preferred debt instruments as a new layer of protection for taxpayers in the event of a bank getting into trouble. However, there are still numerous questions about the new instrument, such as how exactly it ranks with other loss absorbing capital instruments
Harmonising resolution regimes key to spurring EU cross-border lending
Tackling the EU’s non-performing loans is critical if it is to reap the benefits of cross-border banking, such as risk diversification and sharing, and there should be more harmonisation in resolving bad loans, says a European Central Bank working paper. By Justin Pugsley
Treasury: regulators should retain the right to dismantle
A US Treasury report acknowledges that US regulatory agencies should continue to play a key role in dealing with the failure of large complex financial institutions as it steps back from recommended that this should simply be dealt with under US bankruptcy laws.
EU auditors highlight concerns over ECB bank failure assessments
The ECB was criticised by the European Court of Auditors over flaws in the way it designates banks as failing or likely to fail. While industry sources believe that the auditors have made some valid points, they do not think the flaws are potentially fatal to the designation process. By Justin Pugsley
