Headlines

Britain’s financial regulator has said the main objective of its response to the coronavirus pandemic — protecting consumers from harm — will remain its focus in 2021 and into “the medium term”.  In a shorter than usual business plan, published on Tuesday, the Financial Conduct Authority set out four priorities for the future that closely matched the relief measures it had announced in recent weeks, the Financial Times reported.

The world’s largest lockdown is, as expected, taking a toll on the Indian economy. Fitch Ratings Inc. expects that India will grow only 2% in the current financial year, Bloomberg News reported in a commentary. That would be the lowest rate in decades, a level not seen since this country was closed-off socialist backwater. But everyone knows that fighting a pandemic is costly. What’s even more worrying is how the costs of a slowdown—the sudden pressure on incomes and demand, in particular—will widen pre-existing cracks in the Indian growth story.

The eurozone banking system entered the coronavirus crisis in a weakened state with the sector’s profitability declining in 2019 for the first time in three years, according to new data from the European Central Bank, the Financial Times reported. Hit by slowing economic growth and falling interest rates, return on equity at the 113 banks supervised by the ECB fell last year from 6.2 per cent to 5.2 per cent. The least profitable banks by country were in Germany, where the 21 banks tracked by the ECB had an average return on equity of only 0.08 per cent.

Tidjane Thiam, former chief executive of Credit Suisse, is among several prominent Africans pressing for a two-year moratorium on $115bn of sovereign African debt owned by the private sector in what, under normal circumstances, would be considered a default, the Financial Times reported. In a letter seen by the Financial Times, several senior African figures said that the private sector should join a planned moratorium on bilateral and multilateral debt to give African governments the fiscal space to fight the coronavirus pandemic.

Latin America’s economy was already going backward when the coronavirus hit. Now it’s at risk of losing a whole decade –- and pushing fragile democracies closer to their breaking points, Bloomberg News reported. Like most of the world, the region is bracing for the deepest recession in its modern history. Bank of America expects a 4.4% slump in output this year as the epidemic spreads. But what’s distinctive about Latin America is that incomes had already been declining for years –- driven in part by lower commodity prices.

Business leaders in the North, including a former DUP economy minister, have warned the Northern Ireland Executive that small enterprises and start-ups are in danger of going to the wall because they cannot access any emergency Covid-19 funding, The Irish Times reported. Simon Hamilton, chief executive of Belfast Chamber, and 11 other business leaders, have written to the North’s economy minister to warn that in every sector in the North there are companies currently struggling to keep their doors open because they have fallen victim to a “funding gap”.

A total of €34 billion has been wiped off the value of Iseq 20 companies over the past three months as the Covid-19 pandemic spooked investors in global equities, The Irish Times reported. AIB and Bank of Ireland are the biggest losers, shedding 69 per cent and 65 per cent of their market values respectively. As a result, AIB’s market value has fallen by almost €6 billion while Bank of Ireland’s has dropped by €3.4 billion. Combined, the State’s two largest domestic retail banks are worth just €9.3 billion.

Amid all China’s efforts to contain the economic damage of the coronavirus outbreak, a crucial development slipped by almost unnoticed -- the creation of the first national bad-debt asset manager in 20 years, Bloomberg News reported. Galaxy Asset Management Co. won approval in mid-March to convert into ​a financial asset management firm, gaining a much-coveted license to buy bad loans directly from banks nationwide, and the ability to borrow at relatively low rates.

South Africa’s central bank slashed its growth forecasts on Monday, predicting the economy could shrink by as much as 4% in 2020 due to the novel coronavirus, which has forced a national lockdown and triggered two credit ratings downgrades, Reuters reported. The bank also said growth was unlikely to exceed 1% in 2021, job losses this year could reach 370,000, and business insolvencies would likely increase by 1,600. While painting a grim outlook, it dampened expectations of the kind of radical stimulus measures Western countries have adopted to tackle it.

Finnish department store owner Stockmann has decided to file for a corporate restructuring after the drop in customer volumes caused by the coronavirus outbreak, it said on Monday, sending shares in the company down 32%, Reuters reported. Stockmann said its main creditors had given a positive initial response to the move, which is a form of administration in which a court appointee is charged with restructuring the company to avoid bankruptcy.