Prometeia

 During his years as Chairman of the Federal Reserve, Alan Greenspan became the icon of a communication style that later took the name of "Greenspeak": he made wordy and ambiguous statements. "Since I’ve become a central banker," he said on one occasion, "I have learned to mumble with great incoherence. If I seem...

At its meeting on March 12, the Governing Council of the ECB unleashed new, unconventional monetary policy measures to support the liquidity of banks and credit to households and businesses. The new package includes, among other things, changes to the current longer-term auctions (TLTROs) and introduces new weekly auctions (LTROs) to steer banks...

The euro area holds US assets worth approximately €7,000bn (60 percent of GDP) - with almost half portfolio investments (Chart 1). At the end of 2006, that is, before the financial crisis in 2008, European investments in the US totalled €2,600bn, less than 30 percent of GDP. Europe’s current asset position combined with the higher...

In September 2019, the ECB announced changes to the new targeted longer-term refinancing operations (TLTRO III). Differently from what outlined in March, the maturity of TLTRO III operations was extended from two to three years, and, for the banks exceeding their lending benchmark, the interest rate applied will be the average interest rate on the...

Bank profitability in Italy and in the euro area has improved from the post-crisis lows. However, for many banks, earnings are still below what is required by investors and the recent slowdown in economic growth could threaten the recovery of banks’ profits. Why is this a problem? Why does banks’ profitability matter overall, not only...

The European Commission’s proposal to amend the single rulebook, the "banking package" – the Capital Requirements Regulation (CRR), the Capital Requirements Directive (CRD) the Bank Recovery and Resolution Directive (BRRD), and Single Resolution Mechanism Regulation (SRMR) has finally reached its final stages after more than...

The BRRD (Bank Recovery and Resolution Directive), which introduced harmonised rules to prevent and manage bank crises in all European countries, came into force more than four years ago. The bail-in, the mechanism for sharing the cost of a crisis with a bank's creditors, has been in operation for more than three years. During this period, in...

The mantra of the European authorities when talking about the completion of the Banking Union is that there needs to be risk reduction in the banking sector before introducing further mechanisms of risk sharing. What form of risk sharing might this take and what are the risks that banks need to reduce? Risk sharing according to the European...

Bank internal functions related to risk (CRO) and finance (CFO) nowadays have become key actors for a huge amount of regulatory and management/market requirements. Recent regulatory requirements, for instance, ask banks to develop comprehensive stress exercises which necessarily involve skills from risk management, planning and accounting...

At the end of last year the Basel Committee on Banking Supervision (BCBS) announced the final rules that completed the Basel 3 reforms. Basel 4 - as the latest incarnation has since become known as - was presented at the time by Mario Draghi as “the end of the game”. A key objective of the revisions is to reduce the excessive...