MADRID | By Francisco López | In the current context of scarce credit activity and low interest rates, a substantial part of banks’ financial income originates in the fixed income portfolio. The banking sector’s balances of fixed-income come to €540 billion, which represent 17% of the total balance (around half of them being public debt).
MADRID | The Corner Team | The major European banks Asset Quality Review (AQR) will be released on Wednesday. And the criteria for classification of bank assets to be presented by the ECB are key to start estimating more accurately the outcome of the stress tests in 2014, Santander analysts point out. Capital requirements of major entities would be of €55billion, concentrated mostly in Italian banks.
BEIJING | By Yu Hairong at Caixin | The Shanghai FTZ was supposed to be a step towards China’s financial openness. However, the negative list is too long and hardly reflects any improvement on existing foreign investment restrictions.
LONDON | Barclays analysts | US equities rallied strongly and high-beta/high-yielding currencies benefited most in response to initial news of the deal. This positive sentiment has supported most Asian equities today. However, the reaction in currency markets has been more muted, perhaps reflecting the high degree of market optimism on a resolution since the US government shutdown began on 1 October.
Markets have started the week in a relatively directionless fashion amid slow-moving progress in Washington, Barclays analysts point out. That lack of decision could make the Fed delay the tapering until 2014, keeping downward pressure on the USD.
SAO PAULO | By Marcus Nunes | We know that over the next 10 years things only got worse and only got better when Volcker decided that to “live with inflation” was not a good deal. And things really improved when the Fed managed to keep the economy tracking a stable nominal trend level path.
BEIJING | By Hong Hao via Caixin | Lurking behind the U.S. fiscal deadlock is an assortment of risks to Chinese capital markets – but for now, China appears to be standing on a steady perch.
NEW YORK| By Ana Fuentes | Don’t fall asleep with your banking union, the IMF urged the EU on Wednesday, or you won’t be credible. The Washington-based institution also called for an agency that would close or help troubled banks from a national to European level. Everyone in Brussels seems willing to compromise… except for Germany. The elections are over, but Berlin is still sticking to its tough stance.
MADRID | By Francisco López | In recent times there has not been any other banking sector as closely tested as the Spanish. However, despite the continuing ‘streap-tease’ of different financial institutions, the big international investors do not fully trust in the health of the Spanish banking sector.
PUERTO RICO | By Benjamin Cole via Marcus Nunes | Some might say I have a sociopathological hatred for quantitative easing, an atavistic reaction that compels me to find reasons, sensible sounding or otherwise, for detesting and opposing QE. But I have many reasons for opposing QE.