Europe

A new study from the European Central Bank has found that phasing-in capital requirements can lead to a significant boost in bank solvency levels, but that it can also contribute to an increase in risk-taking.

Coronavirus spikes and Sino-American diplomatic tensions over the weekend spooked investors, driving a sell-off in European stocks and a rally in Bunds as cash flocked to safe assets. But an interview with ECB board member Fabio Panetta has brought some comfort to eurozone periphery investors.

The UK government’s decision over the weekend to reintroduce a quarantine on travellers from Spain is set to make a rights issue far more difficult for International Consolidated Airlines Group (IAG), the airline holding company which owns British Airways, according to equity capital markets sources.

HSBC has become the latest bank to create a dedicated team for sustainable finance amid the coronavirus crisis. This is part of a new strategic solutions group, which will also house two other solutions units: one for corporate finance, and one for financial institutions and capital.

The EU parliament has voted for a resolution threatening to reject the EU’s budget proposal. The proposed budget includes the €750bn coronavirus recovery fund, which has helped to drive peripheral eurozone sovereign spreads tighter over the past month.

This week's scorecard looks at the progress Nordic agencies have made in their 2020 funding programmes in late July.

This week in Keeping Tabs: what’s next after the EU recovery deal, assuaging public anger, and the Lebanese economy.

Vodafone has planted its flag to lead the 2021 IPO calendar, with the listing of its European towers unit in Frankfurt.

Tight trading levels will make covered bonds an attractive asset class for statement trades and issuers outside of the euro area, but market participants say that this is unlikely to be enough to lift overall supply volumes out of the doldrums in the second half of 2020.

The European Banking Authority has told supervisors that they should remain ‘pragmatic and flexible’ when carrying out the supervisory review and evaluation process (SREP) for banks this year, confirming that Pillar 2 requirements could remain stable across the industry despite the risks posed by Covid-19.

Two former bond bankers at Citi have set up a workflow and analytics platform to help improve the efficiency of debt capital markets desks at investment banks.

Wordline, the French payments company, has returned to the equity-linked market to sell a new five-year €600m convertible bond at a negative yield.