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Policymakers should think about whether there are impediments that prevent banks from using their capital buffers appropriately in times of stress, the Financial Stability Board said this week.

Derivatives stand to play a crucial role in the European Union’s green deal and transition to a low carbon economy, according to a study by the European Capital Markets Institute that was released on Thursday.

EU leaders meet this weekend to hash out the multi-annual financial framework — the €1tr plan guiding the bloc’s next seven years of spending. The budget contains the €750bn recovery fund, which will likely prove a contentious topic but, if approved, it could reshape the European economy and lead to big changes in its public sector bond market. Lewis McLellan reports.

Huge capital markets revenues helped US banks stack up more provisions against loan losses in the second quarter, as they prepare to weather the economic impact of the coronavirus pandemic. But analysts warn that firms will not be able to repeat this trick in the second half of 2020, with trading and underwriting returns likely to climb down from their peaks.

Investors have been given their first taste of how regulatory relief could bolster bank capital levels amid Covid-19, after Barclays told the market this week to expect a drastic improvement in its common equity tier one (CET1) ratio in the second quarter.

Adrian Lewis, the long-serving head of EMEA equity capital markets at HSBC, left the bank at the end of June to pursue other opportunities unrelated to investment banking and ECM.

The European Union leaders’ summit, which begins on Friday, should determine the approval of the bloc's planned €750bn coronavirus recovery fund. The summit is drawing the attention of investors in eurozone periphery government bonds and high grade corporate paper, particularly as the EU is far from agreeing the fund's final size.

The European Central Bank will begin supervising financial institutions in Bulgaria and Croatia from October 1, as the two countries prepare to join the euro. Firms entering the Banking Union for the first time will also fall under the Single Resolution Board’s remit for the minimum requirements for own funds and eligible liabilities (MREL).

A merger between Churchill Capital Corp III, an investment vehicle run by former Citi banker Mark Klein, and Multiplan, a provider of healthcare services, is the latest evidence that special purpose acquisition companies (Spacs) are now being seen as a credible alternative to IPOs to take companies public.

The European Banking Authority is urging resolution planners to consider the real impact of Covid-19 on banks. It wants to make sure that resolution can be seen as a "credible" option in times of stress.

The European Bank for Reconstruction and Development’s board of directors has approved a proposal to accelerate its transition towards being a green bank, including devoting over 50% of its investments to the green economy by 2025. But it has deferred a decision on when the rest of its activities will be aligned with the Paris Agreement.

The head of the World Bank has, for the first time, called for parts of the sovereign debts owed by the world’s poorest countries to official bilateral creditors to be cancelled, in the face of the coronavirus’s impact.