One thing leads to another, as was true of the San Francisco earthquake of 1906, the Panic of 1907 and the creation of the U.S. Federal Reserve System in 1913. A series of bank runs threatened to hurl numerous firms into insolvency, but unified efforts in the fall of 1907 stemmed the tide, bringing stability and trust back to the sector.
It is undeniable that global markets are intertwined, and this is no more apparent than in the interbank funding market. Recent research shows that the default risks of US banks are imported through wholesale funding by global systemically important banks of many other countries, affecting their funding costs and blunting monetary policy.
The Bank of Japan is adding more grit to its campaign to incentivize Japan’s financial sector to fight climate change by supporting sustainability projects and unravelling financing for fossil-fuel sectors. The strategy will involve various lending measures to encourage banks to incorporate climate-mitigation action in their funding.
egulatory standards play an important role in safeguarding consumers, financial institutions and the global financial industry. As regulatory scrutiny in areas such as anti-money laundering (AML) and Counter-Terrorism Financing (CTF) continues to grow, so does the opportunity to streamline and enhance compliance efforts to tackle financial crime more efficiently and effectively.
Scots are reputed to be an independent group, and recent gains by the Scottish National Party in Parliament support that claim. If Scotland separates from the UK, the ramifications for the banking sectors in both nations would be profound. What are the specific initiatives being recommended to ensure a stable Scottish banking industry?
One pleasant surprise of the pandemic has been the shortage of business bankruptcies, despite recurrent lockdowns that have drained their incomes. But is this rosy picture a cruel illusion to be removed as governments stop propping up small companies? Banks will soon find out if government life support has simply delayed the inevitable.
The introduction of a Central Bank Digital Currency (CBDC) is taking concrete shape in more and more countries economic and currency areas. The European Central Bank (ECB) is currently evaluating the specifications of a digital Euro, Sweden recently extended the test phase for its own CBDC and in China,
Mazars’ study on sustainable finance surveying 37 banks in North and South America, Asia and Europe indicates that progress is being made, especially in the UK and France, toward reaching ESG targets. Although improvement is still required in specific areas, banks and various agencies are joining forces to achieve sustainability goals.
Spring is in the air, and so is price inflation in the UK, which saw its inflation rate rise sharply in April. Leading the way were prices for energy, utilities and clothing, primarily due to the lifting of COVID-related restrictions. As the rate closes in on the BoC’s target of 2 percent, will this upward trend be permanent or transitory?
The Brexit referendum delivered a punch to the UK’s pound, but the currency has slowly picked itself up and gained some strength despite the pandemic, once again closing in on the US$1.40 mark in February. How well it fares over the next few months will depend on several factors—including the UK’s COVID-19 response but also the raft of unique issues that the nation will face as it evolves post-Brexit.