Are you already experimenting with blockchain? (Fintech #6)

Banking and financial markets, Macroeconomics

Topic:

Analyst:

Thomas-Frank Dapp

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No? Then it may be worth taking a look at this digital technology and its potential areas of application. Alongside unsupervised learning algorithms and early cognitive systems, blockchain is an example of a digital technology that not only calls tried-and-tested business models into question, but is already turning them on their head. It may have its origins in the financial sector, but a universal spectrum of applications is beginning to open up both within and outside the fintech world. Those who have tried experimenting with digital technologies have quickly found that in many cases they make existing business models, processes and infrastructures noticeably more efficient and thus increase productivity. This has certainly been the case with blockchain, which is why it is a good idea for many decision makers (not only) in the financial sector to keep a close eye on developments and, above all, the various experiments with blockchain that are currently ongoing. Ideally they would experiment with various projects and pilot studies themselves in order to come up with their own ideas and try putting these into practice. [more]

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European bank results: Is the glass half-full or half-empty?

August 20, 2014

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157

The half-year results of large European banks offer ammunition to both optimists and pessimists: loan losses and administrative expenses are shrinking, but so are total revenues. Net interest income, the sickly child of recent years, finally seems to be stabilising; however, net income is down again to poor levels. The state of an industry with two distinct faces. [more]

European bank performance: Bottoming out

June 25, 2014

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Analyst:

Claire Schaffnit-Chatterjee

158

Current results are still very weak, with total revenues and profits both at the lowest level since 2009. But the largest European banks can justifiably draw hope from a stabilisation in interest income as well as fees and commissions, from declining loan loss provisions and shrinking expenses. The bottom line may have broadly bottomed out, though pressure from litigation charges and the ECB’s balance sheet assessment remains high. New record capital levels abound. [more]

Mozambique: A growth story which can be sustained

June 13, 2014

Analyst:

159

Forecast to grow at 8% per year over the next five years, Mozambique is benefiting from mineral wealth and infrastructure development following a 30-year civil war and from a favourable macroeconomic environment. However, the southern African country has a very low GDP per capita (USD 655). It is now facing the challenge of developing its wealth of natural resources, particularly the gas sector, so that this benefits the population at large and leads to sustainable growth. [more]

European banks' results: The long and winding road

April 1, 2014

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160

The fundamental transformation of the European banking sector into a leaner, less profitable, low-growth but also more stable industry in the “new normal” continues to make progress. Banks are shedding assets, reducing costs and raising capital ratios, with revenues in 2013 having declined for the third consecutive year. Legacy assets and litigation remained an additional, significant burden. Nonetheless, profitability has improved somewhat from its extremely low levels and may well rise further this year. [more]

European banking sector: Finally heading for better times?

December 16, 2013

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161

Following years of struggle and having seen their world turned upside down, European banks may finally be heading for a (somewhat) smoother ride in 2014. Profitability is returning, though so far this is mainly driven by lower extraordinary charges rather than improvements in revenues and costs. Pressure to build capital may lessen thanks to significant progress over the past two years, yet currently banks are still shrinking relentlessly. Much will also depend on regulatory and supervisory actions, especially on how the EU Banking Union is implemented. [more]

CDS spreads widen under central clearing obligation

November 11, 2013

Topic:

Analyst:

Orçun Kaya

Claire Schaffnit-Chatterjee

162

Among the agreed derivatives market reforms, the central clearing of OTC derivatives contracts has a pivotal role that changes the existing risk management and collateralisation practices tremendously. Nevertheless, to date, there is little empirical evidence on the impact of the new market infrastructure on CDS spreads. Controlling for a number of factors, our results indicate that the costs of central clearing seem to be passed on to end-users in the form of increased CDS spreads. [more]

Ethiopia: The African tiger

October 14, 2013

Analyst:

Claire Schaffnit-Chatterjee

163

The East African country has been experiencing impressive economic growth: double-digit between 2004 and 2010, it has averaged 8.7% annually over the past five years thanks to the expansion of agriculture and services. Ethiopia has thus been the fastest-growing economy in Sub-Saharan Africa (SSA). Projected at 6.5% annually over the next five years, it is set to remain on a robust growth path. [more]

Angola: Oil economy on a diversification path

June 13, 2013

Analyst:

Banking and financial markets, Economic and european policy

164

The former Portuguese colony has developed from an agriculture-based economy into one of Sub-Saharan Africa’s main oil and mineral producers and its third largest economy, with strong growth potential. Relative political stability after a 27-year civil war ending in 2002, high foreign investment (current FDI inflows are estimated at USD 15 bn) and strong government spending have propelled Angola onto a robust growth path: annual real GDP growth has averaged 11% over the past decade, it is estimated at over 8% in 2012 and around 7% in upcoming years. The government has embarked on a series of reforms towards economic diversification and more inclusive growth [more]

German SMEs on a sounder financial footing

February 28, 2013

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Germany

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Analyst:

165

Since 1997, small and medium-sized enterprises (SMEs) in Germany have raised their average equity ratio substantially from 6% to 22%, not least as a reaction to more stringent lending requirements by banks. At the same time, SMEs’ dependence on bank loans declined
whose share in total assets dropped to just 26% from 37%.
Large differences remain between private and public firms. [more]

Government debt: Better at home or abroad?

August 23, 2012

Region:

Banking and financial markets, Economic and european policy

Topic:

Analyst:

Jan Schildbach, Samuel Mann

166

After two decades of international financial integration, foreign investors have decided to pull out of Italy and Spain. In this context two central questions arise: what is the cause of this development and what are its consequences? [more]

European banks retreating from the US

August 16, 2012

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Topic:

Claudius Wenzel, Jan Schildbach

Analyst:

167

Since the outbreak of the financial crisis in 2007, euro-area banks have been gradually cutting back their exposure to the US market, thereby making room for others to step in. Especially financial institutions from Canada, Japan and certain emerging countries have expanded their US business significantly. [more]

Five years after subprime: Lending trends in Europe and the US

March 7, 2012

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International

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Analyst: