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Month: April 2020

Large banks are said to increase loan loss provisions for problem loans

The banks, which are directly controlled by the Capital Lender, are to gradually cover all risk positions that are classified as “non-performing” from 2018 onwards through risk provisioning.

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Large banks should provide more for problem loans

Large banks should provide more for problem loans

Europe’s large banks are expected to provide even better protection for loans at risk of default. It is expected that the financial institutions directly controlled by the Capital Lender (ECB) will gradually cover all risk positions that will be classified as “non-performing” from 2018 onwards through risk provisioning, the European supervisors said today in Frankfurt.

For the unsecured part of such non-performing loans (NPL), full coverage is sought after two years at the latest, and for the secured part after seven years at the latest. If banks fail to do this, they must explain to the supervisors any deviations from this guideline.

The ECB puts the total NPL volume for the 120 banks it directly supervises in the dollar area at the end of the first quarter of 2017 at a total of USD 865 billion. A year earlier it was 950 billion dollars. “Many banks have made remarkable progress and have put forward credible strategies and reduction plans. However, some banks still have room for improvement, ”the supervisors explained.

More news of the day

More news of the day

That was also important today:

Nowotny sees the ECB turning slowly

According to Council member Ewald Nowotny, the Capital Lender (ECB) is slowly moving away from its previous monetary policy. A cautious normalization is aimed, said Austria’s central bank governor in Vienna today. “That doesn’t mean braking abruptly, but it does mean stepping slowly away from the accelerator.”

Speculations about possible Yellen succession

According to a media report, it is still uncertain who will head the Federal Reserve in the future. There is no favorite yet, but there is a list of candidates, the Bloomberg news agency reported today with reference to several people familiar with the matter. Advisers to US President Donald Trump had made this list.

The search for candidates is now complete. The current Fed boss Janet Yellen is still under discussion but has only a few supporters in Trump’s closest advisory group.

The other names in circulation are Trump’s economic adviser Gary Cohn, former central banker Kevin Warsh and current central bank member, Jerome Powell. The economics professor is also named John Taylor. Neel Kashkari, President of the Fed branch in Minneapolis, has also been added.