The Basel Committee on Banking Supervision has established guidance on operational resilience for financial firms in different countries to use during pandemics, large-scale system outages or natural disasters. The Basel Committee is also seeking feedback on developing metrics for measuring resilience.
Companies have offloaded $391 billion of non-core, underperforming assets this year as a result of the coronavirus pandemic, figures from Refinitiv show. "Some are selling simply because they need to fix their balance sheets, others are selling because they can no longer afford to invest in a business that is not core and others are selling to invest in their higher margin businesses," said Sullivan & Cromwell merger and acquisition specialist Frank Aquila.
Three-month Euribor was trading lower than the European Central Bank's euro overnight indexed swap rate at –0.486% yesterday for the first time in more than five months as a result of the amount of ECB liquidity support to the market. "The system is so flooded with liquidity that banks are essentially telling you they don't need the money," said Peter Chatwell, Mizuho's head of rates.
Deutsche Boerse is to remove failed payments operator Wirecard from its DAX index of leading shares later this month, the exchange operator has announced. The announcement follows a rule change last month aimed at making it easier to remove insolvent companies from the listing.
Political deadlock regarding relief for US state and local governments is increasing risk in credit markets, Morgan Stanley Wealth Management says. "Failure to secure aid for state and local governments presents downside risk for bonds of low credit quality at a time when investors are willing to move down the credit curve," according to a note by strategists Scott Helfstein and Monica Guerra.
Strategists at JPMorgan Chase are among those who question whether the current market rotation in favor of value stocks will prove sustainable. In particular, they cite China's unwillingness to provide further stimulus to its economy as well as the fact that further US dollar depreciation is unlikely.
ABN Amro has announced it will close its trade and commodity financing businesses after a run of trading losses as part of a business overhaul, with the loss of some 800 jobs. The bank also announced plans to focus on north west Europe, ending all activities except clearing in the US, Asia, Australia and Brazil.
The European Banking Authority is conducting a financial industry survey to determine the barriers and risks in establishing technology solutions for regulation and compliance needs across the EU. "The aim of the survey is to better understand the ongoing activity in this area, raise awareness on RegTech within the regulatory and supervisory community, and inform any relevant future policy discussion," the EBA states.
Major state-run banks in China are trying to comply with US sanctions on Hong Kong officials, including CEO Carrie Lam, to avoid losing access to US dollar funding and foreign networks. Foreign banks operating in Hong Kong are suspending accounts or subjecting clients to stronger due diligence.