The emergency-loan lifeboats thrown out to small businesses to help them stay afloat during the immediate COVID-19 fallout will need to be repaid, mainly to banks. With many businesses still struggling, defaults are guaranteed. In the UK, progress is being made on developing a debt-collection code of conduct to guide banks seeking repayments of government-guaranteed coronavirus loans. Providing already-burdened SMEs with more equity, not debt, may be the best solution.
Although history doesn’t precisely repeat itself, we can learn much from the past, and this is especially true for banks during a crisis. The COVID-19 pandemic has inflicted widespread health and financial harm. Banks need accurate data to predict how deeply they will suffer from credit risks, and informed analyses of historical data such as loss given default levels are crucial in providing this to them.
COVID-19 Response in MENA: The challenges and opportunities for the banking sector and financial inclusion
No part of the world has been spared the COVID-19 economic saber, but the MENA region is suffering from a double-edged sword: the pandemic and persistently low hydrocarbon prices. Despite the recession specter, many banks, both central and private, are doing what they can to minimize the damage for citizens and businesses. Confronting the challenges, they are finding new opportunities, primarily through digital means, to improve their operations and reach.
Instead of prodding countries together to fight a common enemy, the pandemic has in many cases driven nations apart, leading them to insulate themselves from others, thereby threatening years of progress in forging trade partnerships. COVID-19 has exposed many of the inherent weaknesses in the current trade system but also made a strong case for strengthening global connectivity through advances such as digitalization so that all countries can prosper side-by-side.
The special administrative region of Hong Kong has long been a magnet for foreign direct investment. Recently, the cracks in its special “one country, two systems” relationship with China have widened. The grievances of pro-democracy Hong Kong residents have erupted into massive protests—threatening Hong Kong’s appeal to international investors. If not Hong Kong, where else can investors direct their wealth? Or should they wait the Hong Kong situation out?
Interview with Mr. Samir Mezine, Chief Executive Officer, Banque Internationale pour le Commerce et l’Industrie au Mali (BICIM)
The question for many banks today is whether to broaden client outreach to as many different customer segments as possible or concentrate on serving a targeted group. Mali’s BICIM, during its massive reorganization three years ago, took the latter route, with exceptional results. Intent on providing excellent personalized service to the country’s top-level clients, BICIM has found its distinctive niche and role, as CEO Samir Mezine describes in our interview.
Often there is a silver lining in the worst situation, even the COVID-19 crisis. Some investments will take a hit, but others will thrive, possibly including green finance. Policymakers and investors, who had been focused on climate-change action, seemingly dropped the green ball when COVID-19 bore down on society like a massive tidal wave. But there are indications that green bonds will emerge on the sunny side of the pandemic.
Mortgage financing has long been a staple of traditional banks, but in the United States, during the decade following the 2007-08 global financial crisis, many banks retreated from this once-lucrative business. What are some of the factors that have made servicing mortgages more onerous and less attractive to banks, and what can be done to rectify the situation—for the benefit of banks, mortgagors and mortgage market as a whole?
Interview with Mr. Ellis Wang, Group Head of Technology, Transformation and Information, Mashreq Bank
Leading the banking sector of the affluent UAE is Mashreq Bank, which, after more than 50 years, has proven its unrelenting commitment to place its customers at the centre and innovate to achieve that goal. The bank, known for being the first to introduce game-changing breakthroughs, is guided by its mission to build long-term relationships with its clients. In our interview, Ellis Wang explained the bank’s latest plans and developments.
Throughout the past four decades, despite their differences, the United States and China have found a way to get along through a symbiotic trade relationship that maximizes their competitive advantages. Recent US concerns about national security and China’s dominance in manufacturing have strained relations, but now more than ever, with the pandemic threatening to unravel years of economic progress, the world’s two largest economies need to pull together.