Frank Giese

Very practical and realistic post when it comes to credit risk model of commercial banks. The conventional Credit risk methodology needs to add parameters regarding ESG scoring.

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At the time when environmental and social considerations are becoming increasingly intertwined with financial decisions, the banking sector is undergoing a great transformation. On this path of progress, Hipotekarna Banka stands as one of the champions of sustainable finance, pioneering initiatives and a strong commitment to responsible banking practices. This bank has joined the ESG Adria Summit as our silver sponsor! Hipotekarna Banka is intensively working on integrating complex ESG principles into its investment and lending practices by implementing a comprehensive ESG risk management framework. This framework includes evaluating environmental, social, and governance factors when assessing investment opportunities and loan applications. Learn more about their successful initiatives from this domain: https://lnkd.in/eVVKvFCd

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𝐓𝐇𝐄 𝐖𝐎𝐑𝐋𝐃’𝐒 𝐓𝐎𝐏 15 𝐂𝐀𝐑𝐁𝐎𝐍 𝐄𝐌𝐈𝐓𝐓𝐄𝐑𝐒   If you follow me on LinkedIn, you likely expected from me again an interesting, curated report on #sustainability, a concise summary of a publication… as every morning since a long time ago.   However, today my post is somewhat different, because I wanted to try out whether my LinkedIn community values versatile content.   Below you can find the animated chart of 𝐭𝐡𝐞 𝐖𝐨𝐫𝐥𝐝’𝐬 𝐓𝐨𝐩 15 𝐂𝐚𝐫𝐛𝐨𝐧 𝐄𝐦𝐢𝐭𝐭𝐞𝐫𝐬 between 1850-2022.   Do you find it interesting? Or would you like me to continue to share only curated reports every morning? Please, let me know!   Follow me on LinkedIn for a daily post: Zsuzsanna Tajti PhD, CFA, FRM, PRM, CIA, SCR 🌱

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The National Bank of Ukraine has made a significant move by reducing the key policy rate from 13.5% to 13%, effective from 14 June 2024. This decision has been influenced by several factors, including moderate inflation rates, an improvement in inflation expectations, and balanced risks concerning future inflation dynamics, ultimately supporting the country's economic recovery trajectory. Inflation has been tracking below the NBU’s target as a result of favorable weather conditions and robust harvests, alongside adjustments in producers' market strategies. Core inflation underscored this trend by staying within the target range for an extended period, reflecting the diverse forces at play in the economy. Going forward, inflation is forecasted to pick up slightly but remain moderate, with the NBU continuing to undertake measures to safeguard the financial stability and purchasing power of the hryvnia through prudent monetary policy actions.

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The forint has been remarkably strong since the central bank’s last decision, so both market stability and macro fundamentals would, in our view, justify maintaining the previous pace of rate cuts. We therefore see a 50bp cut in May.

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Great way to look into ways how you want to develop your company, company's strategy and not only.

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📣 Beyond savings: Strategic cost optimization for the modern bank 📌 Banks have a strong ambition to deliver increased value at a faster pace through their cost and value transformation investments. 📌 Bank executives are confident that strong cost-base mapping is in place. Cost-reduction targets will likely be aggressive and significant. 📌 Emerging technologies, such as generative AI, will likely be critical in helping to unlock costs that have been difficult to access in the past. 📌 Leaders expect the next wave of cost and value transformation investments to extend beyond traditional frontline functions and into the FTE base in corporate-headquartered departments and functions such as Finance, Risk and Compliance and Marketing. 📌 The most significant barriers to cost and value transformation are related to leadership, momentum and buyin throughout the organization. https://lnkd.in/g3nDkNnH

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Spotlight Powered by - AML Penalties Commerzbank AG is a global German universal bank headquartered at Commerzbank Tower in Frankfurt. The bank was founded in Hamburg in 1870 and is today among the largest credit institutions in Germany. The Federal Financial Supervisory Authority - BaFin has imposed a fine of USD 1,545,076 (EUR 1.45 Mn) on Commerzbank AG for breaching its anti-money laundering (AML) laws. The bank did not update customer data on time and did not provide proper security measures, which resulted in inadequate due diligence in three cases, thus violating its anti-money laundering obligations. To read more, please click: https://zurl.co/VFLw Subscribe to AML Penalties @ https://zurl.co/343z for more insights & updates. Visit our website: https://zurl.co/PWxy #antimoneylaundering #amlpenalties #aml #financialcrimes #moneylaundering #amlcompliancefailure #compliancefailure #bafin #germany #commerzbank #amlviolations #breach #law

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End-Game seems to be just the beginning... source: ANNUAL REPORT YEAR 2023 EBA/REP/2024/08 MAY 2024  Finalising the implementation of Basel III in the EU. What's next? The implementation of the banking package will be one of the main areas of work for the EBA in the coming years, with delivery of around 140 new mandates envisaged in 2024 and beyond.

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Just attended the European Financial Congress #EKF conference and I couldn't be more excited about the insights gained and the connections made. 🎉 This prestigious event brings together top executives and representatives from the financial sector in Poland to discuss risks and opportunities for the upcoming year. 💼📈 The board members of banks delved into how geopolitics influences macroeconomic conditions and banking sector risk, highlighting the intricate interplay between politics, economic stability, and financial health. 💼💰 Cybersecurity was another key topic, reflecting its increasing importance in our digital world. Threats and best practices were discussed in depth. 🛡️🔒 ESG implementation financing was also on the agenda. Innovative methods and strategies for funding ESG initiatives, an area of growing importance for businesses worldwide were thoroughly explored by the board members. 🌍💼 Lastly, the discussion also covered stimulating the growth of long-term savings and investment, emphasizing the need for strategies benefitting individuals and the broader economy. 💵📈 The conference offered a deep dive into new regulations and technologies that might impact the sector in the near future. I came away with a great deal of information, inspiration, and a broader perspective on the key initiatives being discussed in the sector. 🚀🎯 Beyond absorbing knowledge, I also had the wonderful opportunity to share my knowledge and experience with a group of students during the 'Meet the Leader' session. 🗣️ We discussed payments, innovation, and security. The students asked some amazing questions about my career path and sought recommendations for their own. This exchange was truly insightful and humbling. 🎓🙌 The European Financial Congress conference is more than just a gathering of professionals, it's a platform for knowledge exchange, growth, and inspiration. Looking forward to the next one! 🌐🔜 #EuropeanFinancialCongress #ESG #Finance #Innovation #Leadership #KnowledgeSharing 😊

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Financial institutions can now leverage a new framework and AI tool from WWF to evaluate companies' net-zero transition plans 🌿 . This will help identify credible plans and avoid greenwashing. This initiative is a joint effort by WWF, University of Zürich, and University of Oxford. #NetZero #ClimateRisk #FinancialRisk

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Commerzbank AG, Tenity and neosfer Launch "Joint Innovation Accelerator for Sustainable Finance" Andreas Iten, CEO & Managing Partner at Tenity, says: "Together with Commerzbank and neosfer, we are driving sustainable financial innovations in this Joint Innovation Accelerator. We are excited about the revolutionary ideas and solutions that will emerge from this collaboration." https://lnkd.in/eaqGhvRb Kai Werner Bettina Storck #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

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🚀 EBA Takes Crypto Seriously with New Technical Standards The European Banking Authority (EBA) has released a comprehensive set of technical standards under the Markets in Crypto-Assets Regulation (MiCAR). These guidelines cover own funds, liquidity requirements, and recovery plans for issuers of asset-referenced and e-money tokens. The fact that the EBA is already drafting these standards shows their commitment to regulating the crypto market. Will we see significant developments soon? Stay tuned! For more details, check the full press release: https://lnkd.in/dDjBT9iz #EBA #MiCAR #Fintech #Innovation #CryptoAssets

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Based on the central bank’s guidance, there are only two options left on the table in Hungary. In our view, the choice will be the cautious option – a 25bp cut – given the recent market instability. The forward guidance will point to very limited or no room for further easing.

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An interesting #structuredfinance #risktransfer solution is gaining momentum in the #banking #industry. In April, the #IFC announced #Synthetic #SignificantRiskTransfer (Synthetic #SRT) transaction with #BNPParibas Poland. The transaction consisted of #mezzanine exposure of IFC to a $548 million equivalent #creditportfolio of the BNPP Poland. Earlier in 2023, the #EuropeanInvestmentBank (#EIB) Group provided a €175 million guarantee to #LBBW covering the €3.2 billion SME and corporate loan portfolio. The same year, the #EBRD provided €25.6 million in credit protection to RBA (the Croatian subsidiary of #Raiffeisen Bank International AG) covering a €366 million-worth portfolio of SME and corporate loans. On the #European market, these deals are just a few to name. Synthetic SRT becomes a useful tool for banks in their #capitaloptimization #strategy. Several significant #Europeanbanks have already embedded SRT #securitisation programmes in their regular capital and business planning. It enables banks to enhance capital resilience and increase #lending capacity. It helps banks to lower the #riskweights on their #assetexposures by transferring the #creditrisk of the #assetportfolio to investors. What is the usual transactional structure? A bank identifies a reference pool of assets and transfers the #risk of #default of 5% to 15% of this portfolio to an investor. The pool of assets can contain a wide range of #debt types, such as #tradefinance, #mortgage #loans, #infrastructure and #projectfinance loans, etc. In the event a materialized loss occurs, investors bear the loss. The synthetic nature of the transaction allows the bank to keep the designated loan portfolio on its own balance sheet selling the investor a #creditprotection agreement. Institutional investors are typical participants in SRT transactions. They receive periodic #floating-rate #couponpayments usually structured as #SOFR + fixed premium. Major risks for investors are the illiquid nature of the instrument and the risk of loss of the principal. A significant advantage is that large investors can potentially negotiate the characteristics of the underlying pool of assets. In the US, with the failure of Sillicon Valley Bank, banks interest in this investment product is increasing. In September 2023, the US Federal Reserve issued SRT guidance on its relevance to #regulatorycapital rules. Compared to conventional instruments like #AT1 #bonds and #commonequity, SRT provides banks with a cost-effective way to free up #capital without diluting existing investors' #equity. Generally speaking, in light of the tightening #regulatorycapital requirements for banks and the urgent topic of #climateinitiative financing, the Synthetic SRT becomes a practical financial instrument and investment solution, bringing together various #institutional market players, including #internationalfinancialinstitutions, #commercialbanks, and #institutionalinvestors.

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