As for challenger banks in general, I don't have a particularly informed opinion, but I imagine some combination of ZIRP, customer inertia (at least until the Monzo/Starling/Revolut generation, but they don't do much in the way of lending so I'm not sure they count), regulatory conservatism in the wake of 2008, and the inability to actually charge for current accounts in the UK, and I'm sure the clearing banks doing everything they could to throw up barriers to entry.
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When we wandered past the Metro Bank in Harrow the other evening, they appeared to be taking photos of the staff.Comment
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Metrobank seemed to prioritise bricks and mortar banking with high street presence instead of a decent online app; I moved from them to Starling because I didn't ever need to go to a branch, but did want the bank's app to work really well. They're a bank in the 2020s offering a brilliant solution to the problem of the 2000s.Comment
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Zhongzhi, one of the biggest groups in China’s vast shadow financing market, faces a shortfall of as much as $36.4bn and has warned that it is “severely insolvent” in a letter to investors.
The worsening situation at Zhongzhi has put the spotlight on liquidity issues in China’s nearly $3tn shadow financing market and its exposure to the country’s property sector crisis. Zhongzhi, a sprawling financial conglomerate, wrote in a letter viewed by the Financial Times that its total assets amounted to just Rmb200bn ($28bn) against obligations of up to Rmb460bn.
The company blamed the shortfall on the departure of “multiple senior executives and key personnel” and the 2021 death of founder Xie Zhikun, who “played a pivotal role in decision-making” at the group.
The company said “internal management ran wild” as a result of these departures. “The group’s investment products have defaulted one after the other, and we deeply apologise to investors,” it said.Comment
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Just got a press release from PermanentTSB telling me to go fuck myself. I assume their PR newswire service has been hacked, but maybe they just really hate me.Comment
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I guess China is ahead of the curve on the shadow-finance industry. The US one is going to be a blow-up around 2030.Comment
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Huzzah! This should save me an awful lot of tedious gruntwork.The European Banking Authority (EBA) today published a discussion paper on the Pillar 3 data hub processes and its possible practical implications. This project of centralising institutions’ prudential disclosures and making prudential information readily available through a single electronic access point on the EBA website is part of the Banking Package laid down in the Capital Requirements Regulation (CRR3) and Capital Requirements Directive (CRD6)Comment
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This article doesn't really spell out one way or the other whether Walmart's legal arguments are colourable, but if so it suggests US AML laws/supervision for money transmitters are astonishingly lax.Comment
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They certainly are when compared to those in Europe.Comment
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The amount US financial institutions have loaned to shadow banks such as fintechs and private credit groups has passed $1tn, as regulators warn that growing ties between traditional and alternative lenders could present systemic risks
The US Federal Reserve reported on Friday that US banks crossed the 13-figure threshold in loans outstanding to non-deposit-taking financial companies at the end of January. These hedge funds, private equity firms, direct lenders and others use the money to leverage investments and increasingly lend it out to a range of risky borrowers that regulators have discouraged banks from lending to directly.Comment
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Oh! That does not sound healthy. But it also sounds entirely unsurprising that supposedly safe and well regulated banks have found a way to put lots of their cash in the deep end with the sharks.Comment
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This will end in tears and State bailouts (yet again).Comment
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Not technically bank related, but I just encountered my first instance of a Libor bond actually falling back to fixed rate. Exciting!Comment
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