The payments landscape is evolving at a phenomenal rate. New technology developments are emerging faster than ever, driven by the growing culture for digital solutions, new regulatory requirements, and the increasing number of new entrants in the market that are challenging more traditional practices with cutting-edge concepts that appeal to the tech-savvy society of today. This convergence of factors is acting as a catalyst for banks to take action and modernise payments.
In the Journal of Payments Strategy & Systems, Michael Bellacosa, Global Head of Payments and Transaction Services, BNY Mellon Treasury Services, discusses the transformational power of SWIFT gpi. Importantly, the article also examines how banks need to maximise the possibilities of the new landscape and deliver real added value; looking beyond the payment itself and considering how they can harness toolkits such as SWIFT gpi to create solutions that best support their clients.
To read the full article, please click here (please note, the article lies behind a paywall)
According to S&P Global Ratings, the development of the EU’s proposed green finance taxonomy is one of the most important developments in the world of sustainable finance in recent years.
However, as with any major change, questions surrounding the implications for the capital markets abound. In an article for Responsible Investor, Michael Wilkins, Global Head of Analytics and Research, Sustainable Finance, S&P Global Ratings, considers the “pain points” that the taxonomy will have to overcome if it is to be successfully implemented and effectively drive capital towards sustainable objectives.
Namely, according to Wilkins, defining what can and cannot be defined as a sustainable economic activity should be the main focus of the taxonomy’s development, if it hopes to effectively engage the broader market.
In an article for The Energy Industry Times, S&P Global Ratings’ Julyana Yokota, senior director and sector lead, Infrastructure and Utilities, Latin America, argues that solid, transparent and predictable regulatory structures are keeping the region’s utilities on track.
Though policy uncertainty remains for some countries, many are mandating minimum renewable energy targets, argues Yokota. And, in turn, autonomous and stable regulatory structures are as vital as ever for the region’s utilities to continue their steady operating performance.
Deutsche Bank has released the second edition of its white paper, “Regulation driving banking transformation”. The paper assesses the impact of three key trends in the financial industry: Can the increased product offerings and upscaled customer service of Fintechs alter the incumbent players’ business models and even the financial market structure itself? As BigTechs turn their attention to financial services, should regulators be more vigilant when it comes to competition and data protection rules? Is regulatory clarity setting a path for the development and evolution of the crypto assets market?
The paper calls for a regulatory environment that supports the safe and robust development of each trend – concluding that regulation will play a key role in shaping the face of this newly emerging landscape, defining the trajectory of change.
Global Credit Data, a not-for-profit data-collection initiative jointly owned by more than 50 leading global banks, has released its second IFRS 9 benchmarking report. Results from the study highlight a significant degree of variability in banks’ expected credit loss estimates of around factor 4, suggesting the IFRS 9 framework has yet to stabilise.
“We remain in the early stages, however, the high level of variability in ECL figures under IFRS 9 is something the industry will need to analyse and address,” says Richard Crecel, Executive Director of Global Credit Data. “If banks don’t act, they may find the regulator acts for them – and imposes more restrictive standards than many would like.”
Following the announcement of Spain’s National Commission on Markets and Competition (CNMC)’s plans for the new regulatory period, S&P Global Ratings’ Massimo Schiavo and Gerardo Leal gave an exclusive comment to Infrastructure Investor on the impact of the update on the credit quality of utilities in the country.
“This is harsher than we were expecting,” said Schiavo of the regulatory review, which could see revenues reduced by up to 22% for gas distribution and transmission companies.
Please click here for the full article (behind paywall).
Last week, U.K. water regulator Ofwat confirmed its plans to sharply reduce the returns available to water companies over the next five years.
S&P Global Ratings’ director Matan Benjamin comments that the proposals will result in a cut in allowed cost of capital in real terms to around 2.2% from 3.4% in the current regulatory period. He continues that the latest announcement from Ofwat “provides another indication that the next regulatory period for water utilities could be challenging”.
As the start of the California wildfire season approaches, a recent S&P Global Ratings report examines the potential credit risks that California’s regulated investor-owned electric utilities continue to face, and the potential impact of this on credit ratings.
In the report, S&P Global Ratings indicates that should California’s lawmakers fail to implement concrete legislation addressing these risks, this would likely lead to a downgrade of the state’s electric utilities’ credit ratings, possibly below investment grade.
S&P Global Ratings has published 2019’s first edition of Infrastructure Finance Outlook, its newsletter of key infrastructure and project finance-related research and ratings news.
In this edition, S&P Global Ratings considers global infrastructure investment trends, spanning China, the GCC and the Americas, along with the regulatory and political risk factors across these regions.
With global political uncertainties on the rise, infrastructure investors are even more focused on long-term sustainability. And, as environmental, social, and governance (ESG) considerations are rising to the fore of investment strategies, the credit rating agency dedicates this edition to providing greater insight to its newest offering, the ESG Evaluation.
Olivier Paul, Director, Finance for Development at the International Chamber of Commerce (ICC), features in Trade Finance Global’s latest Trade Finance Talks podcast, to discuss the unintended consequences of regulation on trade finance.
Following the release of an ICC report on the topic, the podcast elaborated on the key steps to ensuring that regulation does not hinder the provision of trade finance, including the growing importance of digitalisation.