Reserve Bank of New Zealand’s Post

The Bank of England yesterday published a Dear CEO letter giving feedback from their recent thematic review of non-systemic banks and building societies' recovery plans. Over the last eighteen months they reviewed the recovery planning capabilities of c70 non-systemic UK banks and building societies. The letter sets out the areas for improvement, planned next steps, and effective practice examples. Two broad themes are covered, including some practical pointers in the appendix: 👉 scenarios need to be severe enough to challenge the firm's viability 👉 firms need to improve their calculation of recovery capacity This will be a topic at the forthcoming CEOs conference in June. See the letter here: https://lnkd.in/e3XsN4_d

Canadian MP Matthew Green asks some pointed questions to the CEO of RBC Dave McKay in a recent and groundbreaking parliamentary hearing into the role Canadian banks are taking in hindering the fight against climate change. In the midst of an affordability crisis, with floods and fires, I think it's time we had our Canadian banks on side with helping solve these problems. #climatefinance #sustainablefinance #banking #cdnpoli

🏦 Puerto Rico’s Banking System: A Positive Shift Towards Stability Find out more about this encouraging development here - https://buff.ly/2INUg6U Moody’s Investors Services highlights a positive shift in Puerto Rico’s banking system, moving from a negative outlook to stability. This improvement comes as banks strengthen their reserves, capitalization, and core funding, despite the ongoing economic recession since 2004. Financial buffers have played a key role in this transformation. #PuertoRicoBanking #FinancialStability #MoodyRating #EconomicRecovery #BankingSector #CapitalizationAndReserves

This morning's news that the economy grew slightly in November was very welcomed and may indeed stave off a recession. Our series of 2024 online conversations with the Bank of England will explore the economic landscape and market conditions for businesses across our region. To reserve your place(s) and view the full programme, please visit the link below. #icaew #boe #businessconfidencemonitor

Ben Bernanke urges Bank of England 🏦 to upgrade 'out of date' forecasting infrastructure. Former Federal Reserve Board chair Ben Bernanke has urged the Bank of England to modernise its “out of date” forecasting infrastructure as a high priority, and consider supplementing its central economic forecast with "alternative scenarios". Check out Valeria Martinez’'s latest article 👇 https://incm.pub/3Jh45Mg #investment #investmentmanagement #wealthmanagement #finance

Banks are operating through a period of uncertainty and risk, driven by the impact of the cost-of-living crisis and interest rates. Kantilal Pithia (KP) and Chris Laverty Laverty at Grant Thornton UK LLP explore how to build robust resolution and recovery plans. #pra https://lnkd.in/eGAmqSiN

How complacency has set the stage for another financial crisis-Jim Thorne (Canadians are nice but some are naïve) Raising interest rates at a historical pace while ignoring financial stability concerns, all in the quest for the 2 per cent inflation target, has set the stage for the possibility of another global financial crisis. The Fed can’t continue to ignore financial stability concerns even if Wall Street lacks the fortitude to call them on it. The consequences of inaction in the face of these mounting risks could be dire, leading to a massive deflationary shock. The situation is even more acute in Canada. A nation that was a beacon of resilience through previous financial crises now is on the brink of historical amnesia, having forsaken the ability to glean wisdom from past tribulations. An economy reliant on debt and real estate for growth stands on precarious ground, its sustainability in question. Despite the metastasizing financial crisis, Canadians seem to be dismissive, perhaps even evocatively so, buoyed by the belief their financial system towers above others in security and regulation. This sense of invulnerability harks back to the nation’s experience during the 2008 global financial crisis when Canada’s banking system stood firm amid the tempest. The Canadian government’s proactive measures and stringent regulations deserve credit for shielding the financial system from the same turmoil that engulfed other nations. However, this sense of security may be fostering a dangerous complacency, blinding the nation to the perils lurking within its own economic edifice. The urgency to reduce interest rates cannot be overstated. The financial sector’s indifference to glaring warning signs is alarming. Bold action is needed The burgeoning household debt and overheated property market are indicators of potential trouble. Weak economic indicators, the erosion of quality jobs, and sluggish retail sales highlight the disconnect between the optimistic narrative and the harsh reality. For example, the unintended consequences of the BoC’s interest rate hikes have led to a slowdown in construction, with building permits declining by 14 per cent month over month in December 2023 and 3.75 per cent during the second half of the year – levels not seen since the onset of COVID-19 or during the global financial crisis. Warren Buffett once said, “It’s only when the tide goes out that you learn who has been swimming naked.” A credit event could lead to a deflationary shock that the global economy is not prepared to handle. Ignoring signals from the financial system could result in severe consequences. In focusing on the wrong risks, such as adhering to inflation targets without considering broader financial instability, we may be sacrificing the health of the entire economy. All central banks must prioritize the maintenance of economic stability over the narrow pursuit of inflation metrics. Bold action is needed. The BoC can, and should, lead the way!

COMING UP: This week on the Upside, we discuss the Bank of Canada’s latest announcement, macro themes moving the global markets, as well as the Canadian federal budget. That’s coming up this week starting April 15th @12:30pm daily. The Upside is Fidelity Canada’s investor series that helps you prepare for your financial future and well-being. #FidelityCanada

Wishing you all a happy Bank holiday weekend. Rising global risks could hit financial stability. Homeowners and businesses resilient to high interest rates. And more business news that we thought would interest our members. https://lnkd.in/eGkdHwFk #businessNews #creditmanagement #finance #smallbusiness #latepayment #insolvencies #economy

Wishing you all a happy Bank holiday weekend. Rising global risks could hit financial stability. Homeowners and businesses resilient to high interest rates. And more business news that we thought would interest our members. https://lnkd.in/eZRmUKVY #businessNews #creditmanagement #finance #smallbusiness #latepayment #insolvencies #economy