The mortgage boom is expected to continue; European banks bite the bullet
the Wall Street newspaper
“The 2020 boom for mortgage originators may not be repeated anytime soon. But the business could still be good for a while, ”the Journal says.
“The fourth quarter loan volumes reported by originators so far have been huge, and there are signs that the start of 2021 may not have the typical seasonal softness. There may still be a few more advantages at the outset. For one thing, there are still a ton of mortgages with rates that make them good candidates for refinancing. As of December, there were around 19 million mortgages outstanding with high FICO borrowers, or around $ 7 trillion, for which the average borrower could save around $ 300 per month if refinanced, according to the reports. figures calculated by analysts at Jefferies Financial Group.
Goldman to the masses
Goldman Sachs is expected to present “a low-cost digital platform on Tuesday which automatically allocates and rebalances individuals’ wealth through equity and bond portfolios based on models developed by the company’s investment strategy committee. Called Marcus Invest, which requires a minimum balance of $ 1,000, the mobile service “will be integrated with Goldman’s Marcus consumer banking app and website. The offering will help complete a somewhat rambling set of Goldman banking products. “
Investor’s wish fulfilled
European banks “are using the pandemic to make the changes investors have wanted for years: cut jobs, close branches and force customers to go online.” The hope is that the pandemic has taught customers to live without frequent trips to bank branches, which are expensive to maintain and to staff. “
“The European Central Bank relied on banks for reform and paved the way for economic mergers. National governments, long reluctant to approve bank mergers that would lead to job cuts, have changed their minds. The dismal stock valuations have prompted CEOs to act. “
New world order?
“The rise in popularity of highly volatile cryptocurrencies such as bitcoin could simply be seen as a speculative sign of a foam activated by the Federal Reserve,” says an FT editorial. “But this could best be interpreted as an early signal of a new world order in which the United States and the dollar will play a less important role.”
Donald Trump “has certainly devalued Brand USA. But it’s also a symptom of long-term economic problems in the United States – problems that have been masked in recent years by low rates and monetary policy, which have kept asset prices high but also encouraged indebtedness and indebtedness. The rise in Bitcoin reflects the belief in parts of the investment community that the United States will end up looking like Weimar, Germany., as the post-financial crisis monetary policy designed to stabilize markets gives way to the post-Covid monetization of the rising US debt burden. There are, after all, only three ways out: growth, austerity or money printing. If the US government sells so much debt that the dollar begins to lose value, then bitcoin could be a safe haven. “
Bank of England “gears up for first significant break with EU regulations with proposal that would tighten bank capital rules in the UK. than on the mainland. The regulator’s proposal will toughen the rules for UK banks relative to their European rivals and potentially reduce the amount they can pay out in dividends.
“The BoE’s plans come as prospects fade that the EU will grant ‘equivalence’ status to UK regulations, dashing the City of London’s hope of regaining meaningful access to European markets. “
10 borrowers, 1 big success
OakNorth, a UK SoftBank-backed bank ‘which once boasted of its perfect loan record, has incurred nearly £ 100million in default in large part because of bad loans to real estate developers. The defaults, from just 10 borrowers, will serve as a test for the proprietary credit underwriting platform that has made OakNorth one of Europe’s most beloved start-ups.
Meanwhile, “A wave of start-ups are trying to revive the regional bank in the United Kingdom, decades after most of the country’s original local lenders were swallowed up by consolidation. “
New York Times
Biden stays the course
President Biden and his top economic advisers and the Federal Reserve under President Jerome H. Powell “dismiss warnings from inflation-obsessed economists, who fear that acting aggressively to stimulate a struggling economy could lead to the return of the monstrous price hikes that hit the country in the 1970s. Fed and administration are staying the course despite growing outcry from some economists from all walks of life, including Lawrence Summers, a former Treasury secretary and top adviser to the Clinton and Obama administrations, who say Mr. Biden’s plans could cause a whirlwind of rising prices.
“The pandemic, to some extent, was a catalyst for banks to bite the bullet and begin to address these weaknesses in a more radical way. – Andrea Enria, Head of Banking Supervision at the European Central Bank, on the need for euro area banks to cut costs by closing branches and cutting jobs.