By now, it is clear that the global coronavirus pandemic and the government-mandated lockdowns that have resulted have had an unprecedented impact on the global economy. But perhaps what has not been sufficiently illuminated to date is just how critical the situation has become for those groups most at risk from this downturn.
Due to the unique challenges that have arisen from the pandemic-induced lockdowns, 2020 has been a tough year for many industries around the world—not least for the auto industry. As COVID-19 cases continue to emerge in earnest, government restrictions that remain in place to this day throughout much of the world
In June, The Atlantic published “The Looming Bank Collapse”, a piece by University of California, Berkeley law professor and ex-Morgan Stanley derivatives structurer Frank Partnoy, which generated significant debate over whether a banking crisis in the same mould as that witnessed during the global financial crisis (GFC) is just around the corner.
The last decade or so has seen concerns grow significantly over the long-term health of the dollar. Those concerns have only grown in urgency since the coronavirus arrived on the shores of the United States in February, triggering a nationwide shutdown of the world’s biggest economy.
Some puzzles are fun, while others are not. The sovereign-bank diabolic loop puzzle is definitely not fun for the European governments and banks victimized by it. Trapped in the loop, banks hurt sovereigns, while sovereigns return the favor by hurting banks. Is there a way to break free of this deadly embrace? New research shines a light on a possible channel to freedom that strangely enough originates in the US.
Europe’s banks deserve a lot of credit for weathering less than ideal conditions, such as ultra-low interest rates and profitability in conjunction with high levels of fintech competition and toxic debt. But while conditions haven’t improved much lately on the interest-rate side, the bad-debt situation is considerably brighter. Astute regulators and governments deserve much of the credit, but so do the banks themselves for revamping their management of nonperforming loans.
Technology has brought us all closer together but at times, makes it more difficult to know exactly with whom we are dealing. Accurate customer identity verification is crucial for financial services, especially when the potential for criminal activities such as money laundering is factored in. Regulators are joining in the challenge by specifying how customers’ identities should be verified online, with the new 5AMLD in Europe lending guidance to banks.
Few have not embraced the Green Agenda, as we all see the potential for renewable energy to transform the fabric of our lives and to hinder potentially devastating climate change. But wanting to do and doing can be two different things, with the availability of financing often being the deciding factor. The European Bank for Reconstruction and Development fills the financing gap, with a focus on worthy private-sector green projects.
There were many victims of 2008’s Great Recession, but perhaps none were as hard-pressed as those in emerging markets, who were effectively cut off by the suddenly risk-averse big banks of developed countries. Access to finance through traditional avenues is still hit and miss for those in developing countries, but things are looking up with the advent of technological solutions that are bridging the gap to a more promising future.
The European Union has put up a brave front against financial crimes such as money laundering, but the criminals still manage to get away with a way too much ill-gotten gain. Progress is being made with the new AMLD5 framework, but much more needs to be done to achieve resounding success. What are some of the steps the EU should take to finally grab this brazen bull by its horns?