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Home » Daily Briefing » Daily briefing - 22 December 2016

Daily briefing - 22 December 2016

coffee, drink, cafe, food

A state bail-out of Monte dei Paschi di Siena now seems almost inevitable: the Italian government has got the green light from parliament to fund a €20bn bailout plan for the banking sector, with the rescue of the world's oldest bank the first priority. Investors are not being enticed by the last-ditch plan being touted by the bank this week, and trading of shares in the firm were suspended for a time yesterday after a warning that liquidity was even more parlous than previously thought.

Across the Mediterranean, Spanish banks are digesting the reality of the ruling on mortgage floor clauses handed down by a European court: they now have to refund $4.2 billion to mortgage holders. "New charges resulting from Wednesday's ruling by the European Court of Justice could eat into bank earnings, which have already been eroded by record low interest rates and fierce competition for a shrunken loan pool, and encourage more mergers," Reuters note. "Economy Minister Luis de Guindos told reporters on Wednesday the country's financial system was healthy and could deal with the consequences of the ruling."

China's Debt-to-GDP Ratio continues to climb to worrying levels: a simple chart at SeekingAlpha tells a tale of "mountainous debt and souring loans". Meanwhile retail banks in Hong Kong have seen profits rise by 4.5 percent, according to the South China Morning Post. Despite its small population, Hong Kong has a highly developed consumer finance market, supported by a financially literate population and positive consumer attitudes towards credit.

India: Will new accounting norms hurt bank earnings?
US banking sector regains its appeal for famed investor [FT Paywall]
How Dimon's Monte dei Paschi plan came to grief [FT Paywall]
UK: Atom Bank Deposits Exceed £110 Million Across Its Fixed Saver Accounts
Kuwait's central bank fine-tunes governance of Islamic banks
Internet banker to depart Deutsche Bank -sources

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