Europe

Banks are pushing out the last of this year’s equity block trades and there could even be room for more supply next week, if the UK general election delivers a market friendly result.

KfW has announced a smaller borrowing programme for next year, joining a number of other public sector borrowers also set to borrow less in 2020.

Investors gave the Turkish central bank’s 200bp rate cut a sanguine reaction on Thursday, but fund managers also noted that sentiment towards the country could change at any moment.

Analysts at Commerzbank have criticised Markit for excluding Deutsche Bank’s innovative conditional passthrough covered bond from the iBoxx index for covered bonds. They believe the decision is “technically difficult to justify” and could discourage other banks from embracing new formats.

Activity is set to heat up in the additional tier one (AT1) bond market in 2020, with as many as 22 bonds approaching their first call dates. Market participants appear confident that conditions will allow banks to refinance and incentivise them to do so.

Andrea Enria, chair of the European Central Bank’s supervisory board, has confirmed that eurozone banks will be able to include subordinated debt as part of their Pillar 2 capital requirements. The resulting 90bp improvement in common equity tier one (CET1) buffers could help to offset "unwarranted consequences" from the implementation of Basel III, he said.

Schuldschein salespeople, hunting for new investors with deep pockets, are targeting institutions with environmental, social and governance portfolios as the trend for green deals flourishes.

The European Central Bank has the power to decide the ultimate impact of the Basel III rules in Europe.

Increasingly divisive and unpredictable UK politics is threatening the favourable conditions on which private equity firms and the leveraged finance industry have relied during the post-crisis years. Most levfin bankers and PE partners breathed a great sigh of relief on Friday morning, when the risk of a Jeremy Corbyn-led government dissipated and no deal Brexit became far-fetched — but uncertainty over Brexit remains. Karoliina Liimatainen reports.

Struggling Swiss steelmaker Schmolz + Bickenbach has launched an emergency rights issue after the Swiss market regulator FINMA approved it on Monday.

German banks have completed the first Schuldschein issue with an independent counterparty on the new Finledger blockchain platform. The entire transaction happened on a paperless basis.

The fight to influence the way in which EU lawmakers implement the final Basel financial rules is heating up towards the end of 2019, with lobbyists tussling over the potential impact on the European banking sector.