The new capital requirements regulation (regulation CRR2 and directive CRD V) could improve the capital levels in European banks through its treatment of software intangibles, according to Morgan Stanley analysts. The changes would not come into effect until 2021/2022; depending on what the EBA says in 2020.
Baker McKenzie | There were no flotations in Spain in the first half of 2019, consolidating the progressive decline in these operations since 2017.
The European Central Bank will have to relax its monetary policy again, possibly through further reductions in interest rates or the purchase of assets, if inflation in the eurozone does not meet its target. Chairman Mario Draghi underlined that the ECB’s the limits are flexible because the its legal powers allow it to deploy tools that are both “necessary and proportionate”.
Alphavalue | The ECB´s reflationary strategy has caused doubts among investors about the business plans of Spanish banks, in particular Caixabank, articulated in terms of the improvement in the net interest margin over the expected future rise in interest rates (which, incidentally, we do not expect any time soon).
Renta4 | In Spain, the Technical Advisory Committee of the Ibex decided in its ordinary meeting, as expected, to include MasMovil in the index from 24 June, replacing Tecnicas Reunidas.
Despite weak employment creation data, analysts at DWS point out that the US labour market probably remains too vigorous in general to justify the Fed cutting interest rates.
José Luis M. Campuzano (Spanish Banking Association) | This week the Bank of Spain published an interesting analysis of household financial flows and balances at the end of 2018. Families have continued to reduce bank debt to 96% of gross disposable income (gross disposable household income – GDHI) and 59% of GDP.
The German auction of 5G frequencies ended this week. Telefonica’s subsidiary in Germany was awarded a total 90MHz, for a cost of 1.425 Bn€, 22% of the total raised by the auction of 6.55 Bn€, higher than the expected 5 Bn€. Telefonica Deutschland was awarded 2 blocks in the 2GHz band and 7 blocks in the 3.6 GHz band. The assignment of the 2 GHz block will happen on 1 January 2021 and the other on 1 January 2026.
The Spanish Public Treasury has captured 6 Bn € with a new syndicated 10 year bond, with a demand five times greater, after raising great interest among national and international investors. Spain’s risk premium remains stable around 80 base points.
BoAML | A combination of weaker growth and low inflation is driving an ongoing monetary easing. So far this year, nine out of the 35 central banks we actively cover have cut rates and only three have raised rates. Over the rest of the year, we expect cuts by 14 central banks,