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.”
Read the report here.
The news was covered by The Global Treasurer, Trade Finance Global, Business Money, Fintech Finance.
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”.
Following outreach by Moorgate, the comments were covered by InfraNews (behind paywall) and Environment Analyst (requires subscription).
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.
Following Moorgate outreach, the report was covered by Sacramento Bee, Insurance Journal (followed with another writeup here), and Bloomberg.
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.
Please see the full newsletter in PDF here.
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.
To listen to the podcast, please click here.
The International Chamber of Commerce (ICC) Banking Commission has released a whitepaper urging the trade finance industry to work together to ensure that regulation does not hinder the availability of trade finance and remains relevant in a digital landscape.
The milestone report, titled Banking regulation and the campaign to mitigate the unintended consequences for trade finance, takes a close look at the regulation and compliance requirements that have come into force since the 2007 financial crisis and the industry’s subsequent efforts in promoting their fair treatment of trade finance instruments.
To read the report, please click here.
The news was covered in GTR, TXF, Business Money, PYMNTS, Trade Finance Analytics, Trade Finance Global, Fintech Finance, Finextra, International Trade Magazine, TRF News, Financial IT and Trade Arabia.
Faced with growing compliance pressures, banks are beginning to take serious note of the digital solutions becoming available to help navigate the heightened regulatory environment. In an article for Semana Economica, Mariel Garcia, Country Executive, Peru, LatAm Treasury Services, BNY Mellon, discusses how regtech has the potential to transform existing processes; the steps that the Latin American financial sector could take to best harness its capabilities; and how Peru can get involved.
To read the article – written in Spanish – please click here (please note, subscription to Semana Economica required)