Bank of England

Bank dividend bans have passed their sell-by date

30 Oct 2020

European supervisors in March halted payouts so that lenders could keep credit flowing and absorb losses. Yet earnings and capital have held up, while bond markets are booming. Regulators can drop the restrictions, as long as banks keep big shock absorbers and don’t cut lending.

Corona Capital: Newspaper rivals, College football

17 Sep 2020

Concise views on the pandemic’s corporate and financial fallout: the Wall Street Journal hits up the New York Times’ printing presses; U.S. college football’s Big Ten makes a comeback.

Corona Capital: Aviva’s restructuring

6 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: New CEO Amanda Blanc is reinstating the UK insurer’s dividend and is even open to selling its Asian and European businesses. That’s music to investors’ ears.

UK stimulus exit talk may do more harm than good

23 Jun 2020

Central bank boss Andrew Bailey is talking about how monetary easing will be unwound, while finance minister Rishi Sunak may later this year unveil deferred tax rises. Payback is inevitable. But when flagged so clearly, it undermines recovery efforts.

Corona Capital: UK debt, Oaktree, KKR, Chanel

19 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: UK government borrowing surges past GDP; Howard Marks is sceptical about the stock market revival; KKR bets on cheap and local European holidays; Chanel takes a gloomier view than rivals on the luxury rebound.

Andrew Bailey can freeload on Fed and ECB largesse

18 Jun 2020

The Bank of England boss will buy an extra 100 billion pounds of bonds, but at a slower pace. His peers are being more open-handed. For example, banks just borrowed 1.3 trillion euros from the European Central Bank. Ample global liquidity will help Bailey contain UK debt yields.

Corona Capital: KKR, Rugby, Centene

12 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: KKR volunteers advisers to share the pain, Super Rugby heads back to the pitch, and Centene's best bet.

Corona Capital: Marijuana

5 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Cannabis retailers in California miss out on pandemic surge in vices.

Negative rates would trigger UK banking rollup

19 May 2020

British rate-setters including BoE Chief Economist Andy Haldane are contemplating taking policy rates below zero. Bank margins would suffer, but big ones like Barclays have more fee income to rely on. Stragglers like Virgin Money and Metro may have to put themselves up for sale.

Andrew Bailey will have the UK bond market’s back

7 May 2020

The Bank of England boss expects a big drop in GDP this year. His asset purchases have pushed down gilt yields despite surging public debt issuance. Investors can count on Bailey to ramp up the buying programme given how long the economy will take to recover from the virus.

Central bankers have more cards up their sleeves

29 Apr 2020

Fed Chair Jay Powell and his peers have fashioned new tools to fight the Covid-19 crisis. In future downturns, they could copy the BOJ’s stock buying and, in extremis, consider financing governments directly. Only surging inflation or overt political meddling will hold them back.

Bank of England deploys old tools for new problem

19 Mar 2020

New boss Andrew Bailey has cut UK interest rates to 0.1% and ramped up bond buying. Among the reasons for the easing is a deterioration in the government debt market that is leading to a tightening of financial conditions. Even massive asset purchases may not fix that headache.

Central bank largesse is mixed bag for EU lenders

13 Mar 2020

Christine Lagarde and Mark Carney are giving banks free money and capital relief to fight a virus-induced slump. Investors will see few benefits, though. Higher dividends are taboo, and cheap funds will finance lower-cost loans. Balance sheets have become a social safety net.

Bank of England’s AI approach will toughen up

21 Feb 2020

UK finance has yet to face many restrictions on using artificial intelligence. But the technology brings risks as well as opportunities, the BoE’s fintech director told Breakingviews. A light-touch approach will change as machines make increasingly important financial decisions.

Mark Carney’s green push needs disclosure stick

14 Feb 2020

The outgoing Bank of England boss wants firms to say how they’ll cut carbon emissions. Ideally, he would use his new role as U.N. climate finance envoy to make such disclosure mandatory after November’s UK climate summit. But there’s only so much political capital to go round.

Onus is on banks to get rid of Libor

6 Feb 2020

UK lenders are linking most new sterling loans to the old interest rate benchmark despite a September 2020 deadline to switch to its successor. But the transition will speed up now that IT systems are finally ready. Regulatory pressure leaves Barclays, HSBC and Lloyds no choice.

Carney’s BoE legacy is bigger than monetary policy

30 Jan 2020

Outgoing Bank of England boss Mark Carney has ably navigated choppy economic and political waters since 2013. Early attempts to use rhetoric to steer markets went awry, but his big success was shining an early light on the risks that climate change poses to the financial sector.

Mark Carney has reason to ease before he leaves

13 Jan 2020

The UK economy grew at its slowest annual pace since 2012 in November. The Bank of England boss has one more policy meeting left before Andrew Bailey takes over. Catching up with recent easing by the U.S. Federal Reserve and European Central Bank would be the best handover gift.

New BoE boss is only partly the safe choice

20 Dec 2019

Andrew Bailey is the next governor of the Bank of England. His CV is more complete than internal rivals, and Brexit arguably means the role needs an unflashy Brit more than a carbon copy of Canadian incumbent Mark Carney. But Bailey will need to prove that his BoE is independent.

Audio feed goof makes BoE look naive – and stingy

19 Dec 2019

Traders got faster access to Bank of England briefings by paying the contractor responsible for internal broadcasts. The BoE should have better monitored what was happening. But the problem could have been avoided altogether had it invested in overhauling its two-speed system.