European Central Bank President Christine Lagarde says the eurozone's GDP will likely fall 8% to 12% this year, compared with a 4% to 5% drop during the 2008 financial crisis. Lagarde said the eurozone faces "a massive economic crisis and one that was literally unheard of in peace time for the damage it is causing".
A €750 billion coronavirus recovery package proposed by European Commission President Ursula von der Leyen could mark a historic change in direction for the bloc. Provisions that break from tradition include EU-wide taxes, a significant increase in the EU's borrowing authority and paying out two-thirds of the money as grants rather than loans.
Wells Fargo, Citigroup and Bank of America are said to be evaluating the Partnership for Carbon Accounting Financials carbon accounting methodology. "We're interested in learning about the different methodologies out there and testing them to see which ones make the most sense for a larger bank," said Citigroup's chief sustainability officer Valerie Smith.
The number of countries and companies facing a possible credit downgrade has risen to a record 1,287, according to an S&P Global analysis. "Almost two-thirds of issuers face downgrade potential due to the unprecedented challenges posed by COVID-related containment measures," S&P said.
Liquidity coverage ratios at systemically important eurozone banks edged up just 1 percentage point during the first three months of 2020 to reach 137%, according to quarterly bank results. A report from the European Banking Authority shows the composition of bank high-quality liquid assets has shifted to favour central bank cash and reserves.
Disruption caused by the coronavirus pandemic demonstrates that phasing out Libor as a reference interest rate brings benefits for corporate borrowers, regulators say. Risk-free rates decline during a crisis because they are closely linked to rate cuts implemented by central banks, while Libor rises in such times because it is based on a mix of central bank rates and bank credit risk, they say.
Central bankers should make plans for a return to normal monetary policy and consider how to unwind the extraordinary measures deployed amid the coronavirus pandemic, Bank for International Settlements general manager Agustin Carstens said yesterday.
Business leaders have called on the US government to de-escalate tensions over the status of Hong Kong after a statement from Secretary of State Mike Pompeo sparked fears of more aggressive sanctions on China. The US-China Business Council noted that existing governance arrangements for Hong Kong have "served everyone so well for so many years", while the US Chamber of Commerce warned that any change to Hong Kong's status would be a "serious mistake".
US investments in Chinese banks are growing increasingly risky in light of China's economic malaise, according to a congressional report from the US-China Economic and Security Review Commission. China is opening its financial sector to foreign investment but "Congress must decide if the extent of market access on offer is worth the potential risks to U.S. investors", according to the report.
Goldman Sachs president John Waldron says the bank will delay launching its digital wealth management platform until next year. Waldron stressed that other strategic plans will proceed.
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