EBA Publishes its annual quantitative monitoring report on minimum requirement for own funds and eligible liabilities complemented by a related impact assessment
16 January 2023
"The European Banking Authority ("EBA") published its annual quantitative Report on minimum requirement for own funds and eligible liabilities ("MREL") with data as of December 2021. The Report is complemented by an analysis looking into the impact of the MREL framework on a number of relevant dimensions. As of 31 December 2021, the EBA estimated that 70 banks reported an MREL shortfall of EUR 33bn out of a sample of 245. This is down by 42% compared to last years’ quantitative report on MREL on a comparable basis. The Report shows progress in closing MREL shortfalls, albeit at a lower rate for smaller banks, and concludes that the impact of MREL on banks’ profitability is manageable, although heterogeneous across types of banks and Member States." For more information please press here.
Market News
Bloomberg
Euro’s days of muted swings look numbered
20 January 2023
"Volatility in the euro has calmed down after a tumultuous 2022, sliding at the fastest pace ever. That’s leading some currency players to think it’s worth starting to bet on greater swings. There’s a consensus among global investors that things will quieten down now that inflation is easing and the Federal Reserve is taking its foot off the gas on rate hikes." For more information please press here.
Financial Times
Great power conflict puts the dollar’s exorbitant privilege under threat
20 January 2023 "Since the end of the cold war, the world has largely enjoyed a unipolar era — the US was the undisputed hegemon, globalisation was the economic order and the dollar was the currency of choice. But today, geopolitics once again pose a formidable set of challenges to the existing world order. That means investors have to discount new risks." For more information please press here.
Reuters
Fed to deliver two 25-basis-point hikes in Q1, followed by long pause
20 January 2023 "The U.S. Federal Reserve will end its tightening cycle after a 25-basis-point hike at each of its next two policy meetings and then likely hold interest rates steady for at least the rest of the year, according to most economists in a Reuters poll. Fed officials broadly agree the U.S. central bank should slow the pace of tightening to assess the impact of the rate hikes." For more information please press here.
Cryptocurrencies
MarketWatch
Bitcoin is falling again after big rally. It could get ugly.
19 January 2023
"Bitcoin and other cryptocurrencies were lower Thursday, falling in step with the stock market as investors worry over the prospect of a recession. The big rally in digital assets across the last week - which had little fundamental support - will now be tested." For more information please press here.
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