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Turkey has endured a year of turmoil since the Gezi Park protests and a prolonged emerging market sell-off derailed its economic boom. But even as protesters and police mark the anniversary with another splash of teargas, Halkbank’s result last week shows Turkey’s banks have a prime opportunity to return to the bond market and underscore the country’s strong recovery. Banks thinking of waiting for the third quarter might do well to come now. -
What happens when an unstoppable force meets an immovable object? For Europe’s policymakers, the past two years or so — since EU president Herman Van Rompuy set out his roadmap for banking union and fiscal integration in the eurozone — have been an exercise in answering that question.
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The covered bond market is in danger of losing a swathe of real money investors who have been put off by low returns and declining issuance. But a rich new stream of demand from bank investors looking to fill their liquidity buffers could fill the vacuum in time. However, these buyers should be more interested in looking at the nascent floating rate format and not the fixed rate market that until now has prevailed.
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Banking funding rules should have diversity and stability in mind, and steer clear of favouring one funding format over another. But a Basel consultation document on the Net Stable Funding Ratio published this month promotes the exact opposite, and will make bank funding less stable.
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The European Banking Authority has proposed that covered bond swaps should be exempt from the central clearing proposals set out as part of the European Market Infrastructure Regulation (Emir). In so doing it has provided the market with a fillip, but there is a risk covered bonds will lose appeal if issuers' swap obligations become too onerous to fulfil.
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As if international sukuk were not already rare enough with only six dollar issuers so far in 2014, this week brought an even more unusual sighting — a deal that didn’t have an outrageously oversubscribed order book. Turkiye Finans can thank Damac Real Estate Development’s aggressive handling of investors for that, and so may the rest of the sukuk market.
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India's cash-strapped state-owned banks breathed a sigh of relief last month when the country's central bank pushed back its rollout of Basel III by a year. But the move fails to reward the better functioning private sector banks and takes India a step further away from a more efficient financial system.
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How much should you get paid to hold a deeply subordinated chunk of hybrid bank capital with idiosyncratic structural features from, sometimes, darkly storied credits?
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The European Banking Authority’s effort to improve transparency on balance sheet encumbrance has come to nothing. The draft guideline, which will be finalised by June, is practically useless because it doesn’t include emergency central bank liquidity, which is the largest and most important source of encumbrance. But that’s probably just as well, for if this disclosure became public knowledge, it would create just the sort of negative feedback loop that brought down the UK’s Northern Rock.
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Financial institutions normally focus selling private placement deals in core currencies – euros and dollars — but BPCE has been busy diversifying to other currencies over the past weeks and its European peers should follow the bank’s initiative.
