View more on these topics

Pressure on banks has intensified, says IMF report

Pressure on the banking sector has intensified, increasing the likelihood for a “grim scenario”, according to the Global Financial Stability Report published by the International Monetary Fund.

The worsening outlook has increased the risk of shrinking credit, slow growth and weakening balance sheets.

Existing sovereign debt sustainability challenges, combined with concentrated short-term debt rollovers and an undiversified investor base, has put further pressure on some governments and banks in some eurozone countries.

“The forceful response at the national and supranational level to address sovereign risks and strengthen confidence in the financial system, including in particular through the provision of detailed information on bank balance sheets, helped to stabilize funding markets and mitigate risks,” the report says.

However, it warns conditions remain “fragile” and that the global financial system is still in a period of significant uncertainty, which is hampering the economic recovery.

Overall, conditions have weakened since the Global Financial Stability Report was published in April. The recovery is expected to continue, but the recent turmoil in sovereign debt markets in Europe has once again highlighted increased vulnerabilities of bank and sovereign balance sheets arising from the crisis.

The global financial system still needs to deal with the legacy problems in the banking sector, including, where necessary, recapitalisation, says the IMF, while the fundamentals of sovereign balance sheets need to strengthen and regulation requires clear reforms, building on the improvements proposed by the Basel Committee on Banking Supervision.



Mark Hoban rules out giving CPMA savings objective

Treasury financial secretary Mark Hoban says the Consumer Protection and Markets Authority should not have a statutory objective to increase savings and protection levels. Money Marketing recently launched a campaign,Pave The Way To Save, calling on the new regulator to have a greater focus on encouraging individuals to save and protect themselves and their families, […]


Lord Hutton: Public sector workers should pay more into pensions

Public sector workers should pay higher contributions into their pensions schemes, according to Lord Hutton. The Independent Public Service Pensions Commission interim report, published this morning, says three short-term options were considered for dealing with the sustainability of public sector pensions, of which higher payments was the most effective. The other options were changing the […]

Setback in Arch Cru liquidation

Arch Cru administrators are understood to be furious after the Channel Islands Stock Exchange froze trading in 11 sub-funds, throwing plans to recover UK investors’ savings into chaos. The suspensions – announced yesterday – have derailed tender processes to sell the funds’ assets off that have been worked on over a number of months. The […]

The Merchants Trust PLC – April 2017

Welcome to the latest update for The Merchants Trust PLC from the Trust’s portfolio manager, Simon Gergel. Portfolio Review The Merchants Trust reported results this month and the directors were pleased to announce a 35th consecutive year of dividend growth (subject to shareholder approval at the AGM). The Company is proud to be highlighted as […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment