Europe

The Bank of England has said it may be necessary to make ‘temporary changes’ to capital buffers in the UK, owing to concerns that the existing framework could discourage banks from lending during the coronavirus pandemic.

Andrew Bailey, governor of the Bank of England, has announced that negative rates are “part of the toolbox” but that he sees no reason to make use of them yet.

A glut of syndicated loans has been signed among European high grade borrowers that are for general corporate and refinancing purposes — a sign, said loans bankers, that the market is returning to business as usual for the rest of the year, marking what will at least be a change from the frantic emergency capital raising which began in spring.

Danish covered bond auction season is underway with Nykredit and Nordea announcing sales. August’s auctions also provide the last opportunity to buy certain 30-year callable bonds, of which one is the largest covered bond ever issued.

Equity capital markets are preparing for a busy autumn, with companies looking to raise cash to survive and thrive through the Covid-19 pandemic. But the window for raking in money may well be small, with a number of factors, of which a rising infection rate is only one, threatening turbulence for some time to come.

Commerzbank expects its corporate division to remain under pressure from the coronavirus crisis in the second half of the year, after a second quarter where international firms rushed to take out debt products but the bank was stung by a large single provision, understood to relate to disgraced payments company, Wirecard.

The State of Lower Saxony mandated banks on Wednesday to run a 10 year euro benchmark on Thursday, as German states remain the only action in the public sector primary market.

Spain has submitted an application for more than €20bn from the EU’s Support to Mitigate Unemployment Risks in an Emergency (SURE) fund.

Mediolanum International Funds Ltd (MIFL), the international asset management arm of Italy’s Mediolanum has appointed a new portfolio manager for its European equities team in Dublin.

Charles-Antoine Roche has joined Citi’s sovereign, supranational and agency syndicate desk after spending over a decade in the bank’s medium term notes business.

Slawomir Krupa will replace Séverin Cabannes to lead Société Générale’s global banking and investor solutions (GBIS) activities from next year. The division reported a net loss of €604m in the first half of the year.

Morgan Stanley Investment Management has set up a European corporate fund and a European strategic fund, both earmarked as sustainable.