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Last week’s deals from BBVA and CaixaBank show just how much the Spanish banking sector is powering ahead of Italians in getting to grips with capital regulations. -
Senior preferred debt has never been cheaper for banks — and it has regulatory benefits as well. While funding teams rush to meet bail-in targets, there's a value in keeping the old asset class alive.
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Russian bank debt has fallen out of favour after events snowballed into fears that Central Bank of Russia is lining up to pull the plugs on Credit Bank of Moscow (CBM) and Otkritie.
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The practical application of covered bond harmonisation is too challenging to implement and the process may ultimately not amount to much more than an exercise in moral suasion.
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When Britain voted to leave the European Union, some saw it as a good opportunity to change insurance regulations in Britain’s favour, but moving away from the European framework will be easier said than done.
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Regulators bemoan the lack of comparability in capital standards — the main point of the leverage ratio, and Basel IV, is allegedly to make the capital ratios of different banks more comparable — but the easiest fix to the problem is disclosure, not output floors. Here are GlobalCapital’s suggestions:
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The European Central Bank’s decision to curtail wind down entities' access to repo liquidity materially increases the risk of a covered bond maturity extension or default, and is not consistent with its mission as lender of last resort or its previously benign approach to the asset class.
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The European Banking Authority (EBA) is probably worrying too much when it says that banks could struggle to find buyers for their loss-absorbing debt.
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Anglian Water, priced a £250m eight year green bond on Monday. The size and tenor are unremarkable, and in a generation of sustainability and responsibility, a green bond should cause similarly few ripples. However, this was the first sterling-denominated green bond issued by a corporate borrower since 2015.
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Covered bond issuers in Europe’s periphery should wake up to the fact that current spread levels are artificially tight and unsustainable. The first bank that recognises and takes advantage of this will have a distinct advantage over its competitors.
