South Africa's Cabinet is to ask President Jacob Zuma to establish a judicial inquiry into the country's banks and their actions against the Gupta family — three brothers with a range of business interests who moved to South Africa from India in 1993. The inquiry would also review the legislation governing the country's banking system, Mineral Resources Minister Mosebenzi Zwane said, according to Business Day Live.
Mr Zwane, who headed a committee set up by the government after South Africa's big four banks ceased offering banking services to the Gupta family, said the proposed judicial inquiry would also consider the establishment of a State Bank of South Africa, with the possible corporatisation of the Post Bank being considered as an option.
Bank trade groups and industry advisers in the United States are considering a legal challenge against the Federal Reserve in order to force changes to the Fed's annual stress tests of the country's biggest lenders, according to the Wall Street Journal. The move is being considered against a backdrop of growing frustration with the tests, particularly in the ongoing low interest rate environment. The opacity of the tests and the fact that regulators can block capital returns for subjective reasons are issues for the banks, the WSJ said.
Meanwhile, the Federal Deposit Insurance Corporation (FDIC) has warned that US banks that have been focusing on long-term loans to squeeze as much as they can out of low interest rates could face a shock if rates were to suddenly spike.
The Financial Times warns this morning that the rise in private lending across Europe — where SMEs are borrowing from asset managers instead of banks — could be a form of shadow banking that is not regulated strictly enough.
Swiss banks cut 4.1 percent of jobs in their home market in the first half as companies merged and reduced costs, according to a survey by the Swiss Bankers Association (SBA). "The continued low interest rate environment and strong competition are leading to significant pressure on margins," the SBA said in its annual report. "This pressure is further compounded by increasing costs."
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