The Central Bank of the United States (Fed) is addressing, from this Tuesday, July 27, the monetary policy of the nation and where it is expected that they will analyze inflation and the risks that repesents the Delta variant of the coronavirus.

The economic recovery in the US for this year could be seriously impacted by the increase in the Delta variant, which has triggered Covid-19 infections in many regions of the world.

It is estimated that one of the main points of this meeting is the discussion and review of the increase in prices, stronger than expected, registering its highest rate in 13 years.

Another important aspect to be considered by the Fed is inflation, which during June registered 5.4 %, according to the CPI index, a fact that continues to cause great concern, since the trend is expected to extend over several months.

Jerome Powell, the chairman of the Fed, has repeatedly explained that the increase in inflation is “temporary and then inflation will be channeled to lower levels.” Like many economists, Powell estimates that inflation will stabilize in the medium term and the Fed has set a target in the 2 % range.

This policy coincides with the one recommended by the International Monetary Fund (IMF) to central banks: “continue with a monetary policy approach based on figures,” explained Koeva Brooks, deputy director of the IMF at a press conference.

The international institution, which published its updated economic forecasts on Tuesday, recommended that central banks maintain their support for the economies, without trying at this time to counteract the rise in prices with a tightening of their monetary policies.

M. Rodríguez

Source: diariolasamericas.com

La entrada The Federal Reserve kicked off its monetary policy meeting apareció primero en Bitfinance.

The financial entity Bankinter presented the banking results that reflected the return to the pre Covid-19 business and beat market forecasts, even without taking into account the capital gain obtained by the entity from the breakdown of the insurance direct line business, which amounted to 895.7 million euros, with positive impact on its profit in the first six months of the year, at 1,140 million.

Analysts estimate that the rest of the big banks also show signs of recovery. “We expect Santander, BBVA and CaixaBank to show good results, due to better revenue and cost trends in Europe in the case of Santander. While BBVA and CaixaBank could surprise with better provisions and capital. Sabadell’s results are mixed,” explained Barclays specialists in a recently published report.

Despite the uncertainty that still prevails about the setback that the Delta variant of Covid-19 may entail in the health crisis, improvements are expected in the cost of risk, both in the registered and in the future, of the Spanish entities and “resilience” in capital metrics.

Less provisions and better risk value

According to the opinions of the specialists, the objective will be focused on the evolution of the interest margin, which is pressured by the negative interest rate scenario that has prevailed in the euro zone for years and has lasted longer than expected, as well as in provisions intended to cover credit defaults.

Barclays considers that provisions for “loan defaults will fall 24 % compared to a year earlier in the case of Santander, 18 % in BBVA, 59 % in CaixaBank and 44 % in Sabadell.”

This scenario, with a lower provisioning, impacts on the improvement in the cost of risk observed in recent quarters and will also be reflected in the accounts for the first half of the year, if capital levels remain stable.

According to the analysis by Alvarez & Marsal, the cost of risk for Spanish banks increased threefold last year compared to pre-pandemic levels, to 0.84 %, while in the first quarter of 2021 it fell to 0.56 %.

Specialists also expect good results regarding liquidity. “The general trend will be one of maintenance or some improvement, which in many cases will depend on the regulatory impacts pending to be collected, but which in any case should be offset by the organic generation of capital.”

M. Rodríguez

Source: elespañol.com

La entrada Banking sector in Spain recovers the cost of risk and capital apareció primero en Bitfinance.

The United States Congress can approve in the spring of 2022 one of the pillars of the global tax agreement agreed within the framework of the OECD and endorsed by the G20 in Venice. This was stated by the US Secretary of the Treasury, Janet Yellen,  at a press conference held on Sunday, July 11th, during her visit to that nation.

The finance ministers and governors of the G20  central banks have underpinned this system that is based on two pillars: allocating a percentage of the profits of companies to certain jurisdictions so that they pay taxes where they operate, even if they do not have a physical presence. The second refers to the application of a minimum corporate tax, at least 15 %, to companies with a turnover in the order of 750 million euros, about 890 million dollars.

The US Congress must pass the agreement before the nation can join the pact. But according to the Treasury Secretary’s statements, the chamber could approve the first pillar in the spring of 2022, while the second could be endorsed this year.

Yellen stressed that several countries will adopt the agreement on international taxation and informed that he will meet, on Monday, with Ireland, Estonia and Hungary, in order to explain the importance of their accession.

The Secretary of the Treasury indicated “now we are all the countries competing on the basis of economic fundamentals, with our economic strengths, our capacities for innovation and the robustness of our economic institutions.” She added that the pact will provide the resources to invest in infrastructure, education, and research and development.

M. Rodríguez

Source: eldinero.com.do

La entrada Janet Yellen seeks the approval of the global fiscal pact apareció primero en Bitfinance.