Monday, August 20 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Updated: 6 hours 23 min ago
Consumer prices increased 1.62% (mom) in May, slightly higher than BBVA Research & Consensus estimate of 1.45%. Annual consumer inflation jumped to 12.15% from 10.85% on a broad-based worsening. We expect a limited hike (around 50bps) in its next meeting on June, 7 to strengthen its recent policy decisions and enhance credibility.
The economy of Andalusia grew 2.7% in 2017 and will grow 2.7% in 2018 and 2.5% in 2019. This will add around 190,000 new jobs in the period and unemployment shall drop to 19.8%. Although pre-crisis GDP per capita will be recovered, creating more and better jobs remains as a challenge
Last week the European Commission presented a proposal for developing a new class of low-risk assets denominated in euros. SBBS, or sovereign bond-backed securities, are securitisations backed by a set of sovereign bonds of euro zone countries. Each SBBS would thus incorporate an exposure to a small part of sovereign bonds of each euro zone Member State.
In this paper we develop and estimate a new Bayesian DSGE model for the Spanish economy that has been designed to evaluate different structural reforms.
The trigger leading to the sharp market reaction was on the one hand the manifesto of the coalition between the Five Star Movement (M5S) and the League, which included disproportionate fiscal expansion. All Italian parties had made extravagant fiscal promises, but had not envisaged sticking to them when forming a government.
EBA and ESMA issue a joint communication on financial instruments used for resolution held by retail investors. EBA issues ITS on supervisory disclosure. ESMA issues guide regarding anti-procyclicality margin measures for CCPs. CNMV adopts guidelines to assess suitability of management body members. Finally, FRB issues proposal to amend the Volcker Rule.
Funding before and in resolution. A proposal for a funding in resolution mechanism
Insurance projections for 2018 and 2019 show a general improvement, once corrected the volatility in the life savings branch during 2017. Insurance online purchases are still very low in Spain compared with the European Union, but their growth is very significant. According to BBVA big data, car insurance is the most purchased one by card online.
The General Data Protection Regulation (GDPR), which comes into force today, aims to harmonise and reinforce the legal framework of personal data protection in Europe. It is an update of the previous Directive of 1995, which had become clearly obsolete as a result of the rapid development of the new technologies.
Council agrees general position on the banking package. EC issues a proposal for regulation on SBBS and concrete actions on sustainable finance. EBA consults on technical standards and guidelines to quantify downturns for LGD, and updates OSIIs list. Spanish Economy Ministry consults on sandbox proposal. U.S. Congress passes a financial regulation relief Bill.
Adjustments to the number of employees and branches in the sector continue, despite the deleveraging of the private sector seems to be coming to an end. The sector is feeling the effects of the resolution and sale of Banco Popular in June 2017 and posted after-tax losses of €3.9 billion for the year, although it achieved further improvements in solvency and asset quality.
Growth slowed in 1Q18 to 0.4% QoQ, more than expected. Hard data picked up somewhat in March, but sentiment data continues to be hesitant up to May. Our BBVA-MICA model projects growth to remain around 0.4% in 2Q18, and imply a downward bias on our 2.3% annual GDP growth projection.
The CBRT decided yesterday to raise the “de facto” policy interest rate (Late Liquidity Window) by 300bps to 16.5% to correct the significant depreciation of the Turkish Lira, also with other reasons including the huge deviation of inflation from the target and expectations, financial stability motives and rapid loss of credibility during the last two weeks.