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Jay Powell, the chair of the Federal Reserve, has warned Congress against withdrawing fiscal assist for the US financial system, saying it might imperil the restoration from the shock of the coronavirus disaster

“I would just note that there are something like 25m people who have been dislodged from their job either in full or in part due to the pandemic,” Mr Powell advised the House monetary companies committee on Wednesday. “It would be a concern if Congress were to pull back from the support that it’s providing too quickly.”

Mr Powell’s feedback got here after he advised the US Senate on Tuesday that “significant uncertainty” remained across the form and timing of the rebound from the sudden recession afflicting the world’s largest financial system.

His phrases got here as the talk stays heated on Capitol Hill about whether or not to resume $600 per week in emergency unemployment insurance coverage enacted throughout the disaster. The assist expires in July.

Democrats say it must be prolonged till January, however Republicans contend that the cash discourages individuals from returning to work as states raise restrictions on exercise.

It can be sensible to have a look at methods to proceed to assist each people who find themselves out of labor and likewise smaller companies that won’t have huge assets

Fed officers usually draw back from prescriptions to lawmakers on taxes and spending, and Mr Powell mentioned he didn’t need to make particular suggestions for measures Congress ought to take. But he did recommend that the unemployed would want extra assist.

“It would be wise to look at ways to continue to support both people who are out of work and also smaller businesses that may not have vast resources for a continued period of time, not forever, but for a period of time so that we can get through this critical phase,” Mr Powell mentioned.

“The economy is just now beginning to recover, it’s a critical phase and I think that support would be well-placed at this time.”

Negotiations over a brand new fiscal bundle — on prime of the $3tn handed throughout the pandemic — have nonetheless not ramped up on Capitol Hill. In addition to the controversy over unemployment advantages, partisan variations have developed over assist for cash-strapped state and native governments, which Republicans are additionally resisting.

This week, Ben Bernanke and Janet Yellen, Mr Powell’s predecessors on the Fed, signed a joint letter with 130 economists saying “insufficiently bold” motion by Congress risked resulting in “prolonged suffering and stunted economic growth”.

“If Congress fails to act, state and local governments face potentially disastrous budget shortfalls, and the Congressional Budget Office estimates the unemployment rate will probably be more than 11 per cent at the end of the year,” the letter mentioned.

1/5
Poor credit offtake
In the wake of the coronavirus pandemic, the global economy, including India’s, has slowed down considerably. In order to get the wheels spinning again, the government and the RBI introduced a number of financial schemes, but recent data suggests that corporations have become highly risk-averse in the face of uncertainty.

2/5
Multi-decade low
As ET reported, bank credit growth will hit a multi-decade low of 0-1% which will be nearly 800 bps lower than the 8-9% growth expected before the pandemic, Crisil ratings said on June 8. The forecast presumes a base case scenario of gross domestic product contracting 5% this fiscal.

3/5
Corporate portfolio de-growth
The corporate loan portfolio, which constitutes almost half of total credit, is expected to be the worst-hit, and de-grow this fiscal due to disruption in capacity utilisation, as per the ratings agency. Further estimates suggest that retail lending, which is about a fourth of overall credit, is also expected to slide amid job losses and salary cuts that will lead to reduced expenditure on discretionary items. Purchase of new homes and vehicles are expected to be delayed, impacting demand for financing.

4/5
Consumer spending hit
On the deposits front, there was a surge of Rs 4.83 lakh crore during the first lockdown and Rs 3.62 lakh crore in the second lockdown, which is indicative of “significant risk aversion in consumer spending”, a SBI note pointed out.

5/5
Silver lining
Though the silver lining as per Crisil is, MSME loans which are expected to grow the most at 6-7% this fiscal, riding on the government’s stimulus package – particularly the Rs 3 lakh crore Guaranteed Emergency Credit Line – and are likely to be driven by public sector lenders.

美国联邦储备委员会(FED/美联储)周五在向国会提交的报告中称，由于冠状病毒大流行对经济活动造成冲击，美联储预计家庭财务和企业资产负债表将遭受”持续的脆弱性”。

在向美国国会提交的半年度货币政策报告中，美联储还列举了一系列他们认为会阻碍经济复苏的风险。今年春天为了遏制新冠疫情的蔓延而大规模的关停，导致产出大幅下降。

报告称，“自3月以来，经济和金融冲击给家庭和企业资产负债表带来的压力，可能会造成持续的脆弱性。”

美联储还描述了一系列其他担忧，比如控制疫情的前景高度不确定，感染再度出现的巨大风险；由于消费者需求的崩溃，可能出现的企业，尤其是小企业，的破产潮；对工人需求复苏前景的不确定性以及工资可能面临的下行压力；州和地方政府财政出现重大压力；以及由于贸易中断而断裂的全球供应链重新配置成本高昂等。

此外，本周早些时候确认，新冠疫情导致的衰退已于2月正式开始，对占美国经济产出约三分之二的关键服务业的影响最大，这可能阻碍复苏。

报告称，“与以往的衰退不同，服务业活动的下降幅度比制造业更大——对行动的限制严重削减了旅行、旅游、餐饮和娱乐方面的支出——保持社交距离的要求和态度可能会进一步拖累这些行业的复苏。”

美联储表示，疫情对劳动力市场的冲击是”突然、严重和广泛的”，但同时指出，失业对低收入工人的影响尤为严重，他们可能对长时间没有薪资收入准备不足。

报告还指出，州和地方政府在面临税收锐减后正承受着“巨大压力”。尽管5月整体经济的就业岗位增加，初步迹象显示与冠状病毒相关的失业状况最糟糕时期可能已经结束，但州和地方政府继续裁员。

Leading mortgage lender HDFC on Friday slashed its lending rate by 20 basis points amid a gradual decline in the cost of borrowing across the system.

The move is in line with rate cuts by lenders like State Bank of India.

 “HDFC reduces its Retail Prime Lending Rate (RPLR) on housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 20 basis points (bps), with effect from June 12, 2020,” the company said in a statement.

The change will benefit all existing HDFC retail home loan and non-home loan customers, it said.

New rates will now range between 7.65-7.95 per cent for existing salaried home loan customers.

Rates across the banking system have headed south in the last few months, as the Reserve Bank of India (RBI) and the government work in tandem to propel the slowing economy.

The RBI last month cut the policy rate by 40 basis points to a historical low of 4 per cent to spur growth amid the COVID-19 crisis.

The global economy will suffer the biggest peace-time downturn in a century before it emerges next year from a coronavirus-inflicted recession, the OECD said on Wednesday.

Updating its outlook, the Organisation for Economic Cooperation and Development (OECD) forecast the global economy would contract 6.0 per cent this year before bouncing back with 5.2 per cent growth in 2021 – providing the outbreak is kept under control.

However, the Paris-based policy forum said an equally possible scenario of a second wave of contagion this year could see the global economy contract 7.6 per cent before growing only 2.8 per cent next year.

“By the end of 2021, the loss of income exceeds that of any previous recession over the last 100 years outside wartime, with dire and long-lasting consequences for people, firms and governments,” OECD chief economist Laurence Boone wrote in an introduction to the refreshed outlook.

With crisis responses set to shape economic and social prospects for the coming decade, she urged governments not to shy away from debt-financed spending to support low-paid workers and investment.

“Ultra-accommodative monetary policies and higher public debt are necessary and will be accepted as long as economic activity and inflation are depressed, and unemployment is high,” Boone said.

As the threat of a second wave of contagion keeps uncertainty high, Boone said now was no time to fan the flames of trade tensions and governments should cooperate on a treatment and vaccine for the virus.

The U.S economy, the world’s biggest, is seen contracting 7.3 per cent this year before growing 4.1 per cent next year. In the event of a second outbreak, the U.S. recession would reach 8.5 per cent this year and the economy would grow only 1.9 per cent in 2021, the OECD said.

The OECD expects the Canadian economy to decline 8% in 2020 and recover to 3.9% growth in 2021. A second wave of infection this year would cause the economy to shrink 9.4% and grow only 1.5% in 2021.

Meanwhile, the euro area is heading for a downturn of 9.1 per cent this year followed by 6.5 per cent growth next year. But the recession could reach 11.5 per cent this year in the event of a second outbreak, followed by growth of 3.5 per cent in 2021.

Britain is expected to see the worst downturn among the countries covered by the OECD, with its economy forecast to contract 11.5 per cent this year before recovering 9.0 per cent next year. A second outbreak could trigger a slump of 14.0 per cent this year followed by a rebound of 5.0 per cent next year, the OECD said.

Deutsche Bank has warned its provisions for bad loans will surge to the highest level in more than a decade this quarter as the coronavirus crisis leaves the global economy mired in recession.

Germany’s biggest lender had earmarked a provision of just €506 million for bad loans in the first three months of the year, but cautioned on Wednesday that the figure would increase this quarter.

“Our expectation would be that credit loss provisions will be in a range around €800 million for this quarter,” James von Moltke, chief financial officer, told analysts on Wednesday at Goldman Sachs’ European Financials Conference.

Analysts were expecting just €630 million in provisions for the second quarter, and €800 million will be up fivefold from a year ago.

Mr von Moltke added that “we would expect that the second quarter will be the peak of the loan loss provisioning for this year”, and that the picture would improve in the second half of the year.

Shares in Deutsche Bank rose 2.6 per cent in early afternoon trading in Frankfurt, close to the highest level since late February.

The optimism on loan losses reflected in Deutsche’s first-quarter provision caused some surprise among analysts given the economic damage wrought by efforts to contain Covid-19. Relative to the size of their loan book, only 10 of the 40 largest European lenders provisioned less than Deutsche, according to data by DBRS Morningstar.

Deutsche has argued that it is less exposed to credit card debt than many of its rivals and that an early lockdown in Germany, where state aid for stricken companies is more generous than in many other countries, will limit the damage to its loan book.

On Wednesday, Deutsche also announced a restructuring of parts of its private bank, its single biggest division by revenue. The business that serves private and commercial clients outside of Germany will become part of Deutsche’s wealth management division in a move intended to eliminate parallel structures in the back office. – Copyright The Financial Times Limited 2020

K bank will launch a new checking account service early next month, normalizing the internet-based bank’s business operation, the lender said Tuesday.

This is the first time in a year that the internet-only bank has come up with a new product for customers.

The bank said it will stop registering customers for its existing “Dual K Checking Account” in early July and introduce the new, upgraded checking account service

Market watchers see the move as an indication that the bank is seeking to normalize its operations as a capital increase issue has recently been cleared up. BC Card, a subsidiary of KT which owns a 10 percent stake in K bank, decided to buy the KT shares and raise its stake in the lender to 34 percent by purchasing new shares issued by the bank.

K bank is the nation’s very first internet-only bank that began operation in April 2017. But it has suffered from a lack of capital since last year.

It initially hoped to receive a capital injection from the mobile carrier KT, which looked to become the bank’s largest shareholder.

But the plan hit a snag after the nation’s financial authority halted a review of KT’s plan early last year on the grounds of an ongoing antitrust inspection into the mobile carrier. As a result, the bank had to stop giving loans in April last year, due to the failed increase.

Payments made via financial services platform Toss using stolen data earlier this month have placed the fintech unicorn in the hot seat. Toss has stated this was not a cybersecurity breach, but concerns are rising over the platform’s ability to detect suspicious transactions, resulting in customers leaving the company.

Toss did not provide details but conceded Tuesday it has seen customers leave the platform over concerns related to the incident, after reports surfaced on the case that took place last week. Even if it wasn’t a hacking incident, customers appear to feel uneasy, as it is unknown how the data was obtained.

A total of 9.38 million won in payments were made June 3 on three websites, including a game company, using stolen data of eight Toss customers. A police investigation is ongoing to find out who made the payments.

Four of the eight customers reached out to Toss after finding out about the payments. Toss said it was able to find four more customers whose data was stolen to make payments on the same websites.

Toss said it paid back each of the customers the amounts of money paid with the stolen data June 4, the day after the incident.

The payments were made on websites for which the payment process was simplified ― requiring only a name, phone number, date of birth and password.

A Toss spokeswoman said Tuesday this “web payment” system was changed for the three websites where the payments in question were made.

“We changed the payment system for the three websites to an application payment system, which checks if the actual owner of the account is making the payment,” she said.

The “web payment” system is applied to about 30 businesses affiliated with merchants partnering with Toss. The spokeswoman said Toss will review whether to change the payment system for all other businesses.

Some say the simplified payment system enabled stolen data to be utilized, as payments can be made with only a few personal details and five-character password.

Shinhan, KB, Hana and Woori financial groups are facing difficulties in attracting young engineers equipped with digital skills, due to their rigid corporate culture and tough financial regulations.

Despite the nation’s four largest banking groups’ efforts to find such people to engineer their digital transformation as the trend for contactless transactions grows due to the COVID-19 pandemic, IT experts are choosing to work for tech firms, rather than becoming bank employees.

According to industry sources, hundreds of experienced engineers and designers rushed to visit Naver Financial’s website between May 11 and 15 to apply for about 30 positions available at the IT giant’s financial subsidiary.

In contrast, all 15 KB employees sent to KakaoBank in 2016 refused to return to their previous workplace late last year, despite attractive incentives from their previous employer.

These cases may seem weird to those who remember when banks were popular workplaces here because of their stability and high salaries.

Korean students, however, are choosing not to work for conventional financial firms anymore.

A survey of 1,045 university students done by Incruit in June showed Kakao was their most-favored company, followed by Samsung Electronics, Naver and CJ ENM.

The local job market information provider said the respondents mentioned Kakao’s growth potential and work-life balance as the biggest reasons they want to work for the IT firm.

In the survey, none of financial firms were among the top 10.

Up until of 2017 when the Export-Import Bank of Korea ranked 10th, financial firms had regularly been in the top 10.

KB Kookmin Bank was on the list from 2006 to 2015, and Shinhan Bank was placed ninth in the same survey done in 2011.

However, their corporate cultures and regulations have led talented jobseekers to turn away from them.

“I had to do what bank employees ordered, and had to apologize when they had complaints, so I became withdrawn and suffered from an excessive workload,” an engineer who moved to a foreign company from a financial group’s IT subsidiary said on condition of anonymity.

Some engineers complained of the strict network separation policy imposed on banks, because it has barred them from telecommuting or working on a flexitime basis, despite the work-from-home trend amid the COVID-19 pandemic.

美联储周三结束为期两天的议息会议后宣布，维持现行利率0%-0.25%不变，符合市场预期。决定利率政策的联邦公开市场委员会也公布预测，今年美国经济将萎缩6.5%，年底失业率将达到9.3%。美国财长姆努钦表示，美国经济开始反弹，第三第四季将显著改善。

美联储周三决定，维持基准利率近于零。美联储并表示，在经济从新冠病毒疫情复苏之前，将维持现有利率政策。官员预料将维持低利率到2022年。

美联储在一连两天举行议息会议后，决定联邦基金利率目标范围维持在零至0.25%，合乎市场预期。

美联储决定利率政策的联邦公开市场委员会并公布经济预测，表示今年美国国内生产总额（GDP）将萎缩6.5%，但年底失业率会从目前的13.3%降至9.3%。

联邦公开市场委员会透过声明表示：这场新冠病毒疫情导致全美及世界各国经济面临巨大困境，对经济展望构成巨大风险。 美联储并承诺，将使用所有工具支持美国经济，重申新冠病毒疫情危机短期内严重影响经济活动、就业及通胀。公共卫生危机对中期经济前景，构成相当大的风险。

美联储发表的图表显示，预计将维持利率在目前水平直至2022年底。

不过，美国财长姆努钦周三表示，美国经济已开始反弹，预料将在第三及第四季显著改善。美国参议院举行会议，讨论美国政府在新冠疫情下协助企业的舒缓措施成果。努钦书面声明表示，就业职位和其他经济数据都显示，美国分阶段重启经济情况良好。