Digital Banking Hub

US moves on banking data rules, but portability could take years to facilitate

US moves on banking data rules, but portability could take years to facilitate Rules around portable account history could be years in the making  The US Presidential Executive Order encouraging the Consumer Financial Protection Bureau (CFPB) to “issue rules allowing customers to download their banking data and take it with them” from bank to bank, could take a number of years to enable. “Allowing customers to download their data was not mandated in Dodd Frank… it could take several years to facilitate,” says David Schroeder, senior vice president, federal governmental relations, at the Community Bankers Association of Illinois (CBAI). The CFPB is currently reviewing comments received in response to an advanced notice of proposed rulemaking (ANPRM) regarding the issue of data access by users and aggregators, for use in assisting consumers in a variety of different computer applications.

Digital Banking Hub

Squeeze on neobanks as expectations rise

Squeeze on neobanks as expectations rise As market forces churn, neobanks find themselves faced with old rivalries and new “Because Starling works in an agile manner,” says a representative at the bank, “with collaboration in multidisciplinary teams and a flat organisational structure to make decision-making faster, we are able to be responsive and to adapt quickly to change.” As traditional foes pivot and new competition rushes to capitalise on changing consumer spending and saving patterns, neobanks must be on the front foot...

EPFR - fund flow & allocations data

Another week of mixed messages in mid-July

The third week of July saw numerous countries wrestling with severe drought while others, among them China and Germany, counted the costs of massive floods. In the US, where looking-to-hire signs are proliferating in business districts across the country, first-time jobless claims climbed. New cases of Covid-19 worldwide are again north of 500,000 a day but the ratio of deaths has fallen from one in every 42 cases at the end of January to one in every 65 cases. With the needles for many key datapoints swinging rapidly in often contradictory directions, flows to EPFR-tracked funds remained choppy and subdued. Equity Funds recorded their second smallest inflow year-to-date, redemptions from Alternative Funds jumped to a 16-week high, Bank Loan Funds’ longest inflow streak since 1H17 came to an end and four of the five fund groups tied to cyclical sectors posted an outflow. In addition to the twin specters of rising inflation and rebounding Covid-19 caseloads, and their potential impact on the global reflation story, some investors are starting to question the degree to which pent-up consumer demand will drive growth in the second half of the year. In the US, consumers are spending and starting to take on more debt. Retail redemptions year-to-date from US Money Market Funds stand at over $135 billion. But the enhanced unemployment benefits spigot is being closed and is slated to be largely shut off by September. Retail investors are still steering money into Europe Money Market Funds and savings rates throughout the developed world remain above pre-pandemic levels.

BankTrends - Banking Analytics

SCALE vs. WARM

Which methodology is right for your community bank or credit union? Choosing a CECL method that is right for your bank or credit union depends on many factors. Between the historical data available, management objectives, and associated operational costs, it can get complicated learning about all the different options available. While different methodologies can be used for various portfolios, some methods stand out as being the simplest for community banks or credit unions like yours. For smaller institutions, the most straightforward solutions are the Weighted Average Remaining Maturity (WARM) method or the newly released SCALE model. Let us start by telling you a little more about these methodologies at their core.

EPFR - fund flow & allocations data

Our Financial Intelligence leaders discuss ESG Investing Landscape: What’s Driving Momentum

IGM Credit

Global ESG Issuance Trends 1H 2021 Edition

• Global issuance of ESG bonds tracked by IGM in the first half of 2021 surpassed all of 2020's issuance to total USD 474.79bn on 595 tranches. This compared to last year's ESG issuance of USD 468bn on 530 tranches. • Q2 ESG issuance came in a touch lower than Q1's record quarter issuance of USD 251.67bn at USD 223.11bn but still represented the 2nd largest quarter of ESG issuance per IGM's records and 97% higher than Q2 2020. • Green bonds remain the favored theme and comprised 44% of total ESG issuance over Q2 at USD 98bn versus 40% in Q2. • Sustainability-Linked bond issuance stood out in Q2 however with issuance surging to a record USD 26.28bn, more than the accumulated volume from when the 1st SLB was issued in Sep 2019 to end Q1 2021, of USD 15.789bn. • The 10 largest tranches in Q2 (and H1) once again came from Europe or cross border* issuers, of which the largest ESG issuer continues to be the EU via its SURE Social Bond framework. Consequently Euros, SSAs and Investment Grade proved once again to be the predominant currency, sector and rating categories of ESG issuances. • ESG now comprises around a quarter of all European issuance, led by green & social bonds. • Q2 ESG issuance by US issuers was the 2nd largest on record after Q1's record volume of USD57.74bn at USD 51.55bn and represents a 34% rise vs Q2 2020. Issuance in the US has gained four fold from Q2 2020 but still represents a mere 8% of US issuance volumes, signalling room for expansion. • China has leapt onto the ESG bandwagon and now represents the 4th largest global issuer ex supras after France, Germany and the US, with issuance from Chinese issuers surging 91% in Q2 vs. Q1 to USD 7.97bn and USD 11.47bn for 1H. From 2% this time last year, APAC US$ ESG issuance now comprises over 16% of all APAC US$ issuance.

EPFR - fund flow & allocations data

Investors navigate multiple currents

In a year of multiple – and often competing – economic narratives and themes, the second week of July offered something for everyone. For the reflationary bulls, key equity indexes on both sides of the Atlantic hit fresh record highs as new US childcare tax credits started flowing, the Chinese government cut reserve requirements for domestic banks and the 2Q21 US corporate earnings season got off to a strong start. For inflation hawks, core US inflation in June hit its highest level since 1991. For those betting on a greener future, the European Union unveiled a sweeping plan, Fit for 55, that aims to eliminate petrol-driven vehicles and expand the use of carbon taxes. For those who believe that the Covid-19 pandemic remains the biggest story, infection rates driven by the Delta variant continued to climb. Against this backdrop, flows to EPFR-tracked funds followed the stimulus trail while steering clear of groups where monetary tightening or the ongoing pandemic could have a bigger impact. China Equity Funds posted their first inflow since the second week of June and biggest since the second week of May, Infrastructure Sector Funds extended their longest inflow streak since 2014 and Europe Bond Funds enjoyed record-setting inflows during a week when the European Central Bank announced a new inflation targeting policy. Overall, the week ending July 14 saw all Equity Funds post a collective net inflow of $18.7 billion versus $362 million for Alternative Funds, $2.5 billion for Balanced Funds, $5.6 billion for Bond Funds and an outflow of $30 billion for Money Market Funds.

Zephyr Portfolio Analytics

Ryan Nauman's Weekly Recap: COVID-19 Market Edition 07.12.21

All eyes will be on the release of the June Consumer Price index during the week ahead. The Federal Reserve and inflation have been and will continue to be the drivers of market behavior, so it is not surprising most will be watching the inflation reading. The Fed’s tone recently turned hawkish in part due to the pace of rising inflation. If inflation continues to rise higher with no signs of slowing in the near term, the Fed’s tone might become more hawkish.

Zephyr Portfolio Analytics

ESG Investing - Align Your Investment Recommendations to Meet Your Client's Unique Values

EPFR - fund flow & allocations data

Delta hitting expectations of alpha in early 3Q21

Flows into EPFR-tracked Bond Funds jumped to a 22-week high in early July as investors, already digesting mixed economic data from the US and China, wrestled with the implications for global growth of the worldwide surge in Covid-19 infections driven by the Delta variant of the coronavirus. The latest spike in Covid cases has already crimped economic activity in China’s Guangzhou province, raised the specter of a second lost tourist season for Europe and prompted Japan to reimpose a state of emergency in Tokyo. It is also giving US consumers and businesses another reason to be cautious about spending the capital and savings they stockpiled during the pandemic. The US personal savings rate remains well above its pre-pandemic level and much of the cash that flowed into EPFR-tracked US Money Market Funds last year is still there.

Financial Institution Pricing Data

Roundtable: FBX’s Banking Landscape: Post-Pandemic Trends Transforming Retail & Commercial Banks, and Credit Unions

As financial institutions emerge from a pandemic-fueled 2020, what trends will define and drive the banking landscape into the future? Watch our virtual media roundtable to learn about the banking evolution in the ‘new normal’ including digital acceleration, rates/fees, mortgage, and more...

IGM Credit

IGM Global Credit Snapshot

IGM Global Credit Snapshot | Thursday, 8th July 2021 - New issuance market in Europe and APAC picked up sharp momentum in June. - US IG issuance, in contrast, fell to the lowest this year but still beat Street estimates. - ESG proved a key theme for European corporates in 2nd busiest month of 2021. - Cash rich investors chase reduced supply in European FIGs, with av cover ratio highest since Nov. - Av new issue concession on APAC US$ issuance (ex-Japan) returned to negative territory. - For more specific regional highlights see below.

EPFR - fund flow & allocations data

Quants Corner - Growth vs Value in 2Q21: Chasing under-performance?

Tech is back! After five months of some ups and more downs, the month of June has been kind to the technology sector. From the mid-May low, the NASDAQ has outperformed the S&P 500 by almost 7%. If we look in smart beta terms, Growth has outperformed Value by around 11.5% over the same period. Read more...

IGM Credit

European Structured Finance H1 2021 in Review

European Structured Finance H1 2021 in Review - Busy H1 for CLO portfolio managers, but spreads widen on heavy supply - Specialist RMBS sales leads the way, some green shoots for ESG with four deals - Autos picking up the pace; rarity from infrequent issuers while spreads hit new tights - CMBS issuance on the rise with nine deals, more to come - Proportion of fully retained deals remains low

Zephyr Portfolio Analytics

Ryan Nauman's Weekly Recap: COVID-19 Market Edition 07.05.21

The holiday shortened week ahead is light on economic data but there are some releases worth monitoring such as the services PMIs and jobless claims. I will be focusing on job openings, as labor supply remains tight in many sectors as people continue to deal with childcare issues, pandemic concerns, and would rather stay home and collect relatively attractive unemployment benefits. Last month openings nearly equaled the number of unemployed, which I expect to continue to narrow. Additionally, I will have a keen eye on the FOMC meeting minutes as inflation and the Federal Reserve continue to drive markets.