Interest rates

Fareportal Expands Affirm Relationship - Offers Zero Percent APR to Qualifying CheapOair Consumers!

Wednesday, December 2, 2020 - 3:53pm

Today the companies announced the expansion of their relationship with the introduction of zero percent APR financing to qualifying CheapOair consumers .

Key Points: 
  • Today the companies announced the expansion of their relationship with the introduction of zero percent APR financing to qualifying CheapOair consumers .
  • CheapOair customers can select Affirm as a payment option at checkout and check eligibility without impacting their credit score.
  • "Timing on the introduction of zero percent APR financing for our customers could not be better," said Sam S. Jain, Founder and CEO at Fareportal.
  • With zero percent APR financing through Affirm, we can provide another affordable travel booking option."

ICE Benchmark Administration to Consult on Its Intention to Cease the Publication of One Week and Two Month USD LIBOR Settings at End-December 2021, and the Remaining USD LIBOR Settings at End-June 2023

Monday, November 30, 2020 - 2:00pm

This follows the announcement on November 18, 2020, that IBA would consult on its intention to cease the publication of all GBP, EUR, CHF and JPY LIBOR settings immediately following the LIBOR publication on December 31, 2021.

Key Points: 
  • This follows the announcement on November 18, 2020, that IBA would consult on its intention to cease the publication of all GBP, EUR, CHF and JPY LIBOR settings immediately following the LIBOR publication on December 31, 2021.
  • Since then, the FCA and other official sector bodies have strongly advised end-users of the need to transition from LIBOR by December 31, 2021.
  • ICE LIBOR, LIBOR and ICE Benchmark Administration are registered trademarks of IBA and/or its affiliates.
  • Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.

Canadian securities regulators outline recent developments on interest rate benchmarks

Thursday, November 26, 2020 - 5:19pm

TORONTO, Nov. 26, 2020 /CNW/ - The Canadian Securities Administrators (CSA) today published a staff notice to ensure that market participants are aware of recent developments regarding interest rate benchmarks and can consider their impact.

Key Points: 
  • TORONTO, Nov. 26, 2020 /CNW/ - The Canadian Securities Administrators (CSA) today published a staff notice to ensure that market participants are aware of recent developments regarding interest rate benchmarks and can consider their impact.
  • On November 12, 2020, Refinitiv Benchmark Services (UK) Limited (RBSL), the administrator of Canadian Dollar Offered Rate (CDOR), announced that the six-month and 12-month tenors of CDOR will cease to be published effective May 17, 2021 (the effective date).
  • The staff notice also outlines international developments to replace key inter-bank offered rates (IBORs) with nearly risk-free reference rates (RFRs).
  • The CSA, the council of the securities regulators of Canada's provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

Prospects for euro area bank lending margins in an extended low-for-longer interest rate environment

Thursday, November 26, 2020 - 12:05am

In the wake of the pandemic, the economic outlook has deteriorated, the recovery is uncertain and interest rates are expected to remain at historical lows for even longer.

Key Points: 
  • In the wake of the pandemic, the economic outlook has deteriorated, the recovery is uncertain and interest rates are expected to remain at historical lows for even longer.
  • The persistently low interest rate environment can both support and dampen the profitability and resilience of euro area banks.
  • This special feature examines some aspects of how the low-for-even-longer interest rate environment may affect bank lending margins, and in turn banks ability to lend to the real economy and overall financial stability.
  • The compression of margins reflects the sluggish response to further policy rate cuts of deposit rates as they approach the zero lower bound.

1 Introduction

    • The low interest rate environment has featured heavily in debates on prospects for the euro area banking system, which faces persistently weak profitability.
    • That said, overall bank risk-taking was not judged to be particularly elevated, especially given the better capitalisation of banks since the crises earlier in the decade.
    • In the wake of the pandemic, the low interest rate environment is expected to persist even longer, driven by lower real interest rates.
    • Very low nominal interest rates have been a feature of the economic environment across advanced economies since 2009.
    • They reflect a decline in equilibrium interest rates, i.e.
    • Chart B.1 The phenomenon of very low real and nominal interest rates a feature since 2009 is set to persist in the wake of the pandemic
    • The first section focuses specifically on the impact of the real versus the nominal component of interest rates on net interest margins, returns and loan loss provisions.
    • It also investigates whether the adverse impact of falling interest rates on net interest margins worsens when nominal short-term rates are negative and when low rates persist for an extended period.
    • Given the finding of non-linearity around negative interest rates, the second section discusses the prospects for overcoming the zero lower bound on customer deposit rates.

2 The role of real and nominal rates in bank intermediation

    • The real rate component of interest rates may affect bank profitability separately from changes in inflation expectations.
    • Nominal interest rates consist of two components: the real interest rate and compensation for the loss of purchasing power over the life of a contract, which reflects the prevailing inflation expectations.
    • [2] An increase in real rates, especially long-term interest rates, tends to mirror a strengthening in the expected growth of the real economy.
    • Alternatively, it may capture changes in the creditworthiness of bank borrowers, which tends to worsen if real debt servicing costs increase and result in higher credit risk premia embedded in bank lending rates.
    • [3] The economic literature identifies a number of structural factors exerting downward pressure on real interest rates.
    • [5] Even outside of a low interest rate environment, these intermediation margins increase when interest rates are higher.
    • [6] Table B.1 The estimated impact of nominal and real rates on bank profitability
    • Notably, higher nominal interest rates driven by variation in inflation expectations are found to be particularly important for margins.
    • [7] The explicit distinction between changes in nominal interest rates due to variation in real rates and changes driven by higher inflation expectations is a key feature of this analysis.
    • Higher interest rates when driven by higher inflation expectations are found to lead to a significant increase in net interest margins.
    • Higher real long-term interest rates for a given level of inflation expectations tend to be associated with slightly lower net interest income.
    • [8] Higher real short-term rates support banks margins, reflecting the limited sensitivity of remuneration on transaction deposits to market conditions.
    • Lower nominal short-term interest rates squeeze margins more when short-term rates are low.
    • The results from including a quadratic term of the nominal short-term interest rate in the specification show that low starting values for interest rates result in nominal short-term rates having a steeper impact on banks net interest margins (see ChartB.2, left panel).
    • [9] Adding an interaction term between the short-term interest rates and a dummy for the period over which negative interest rates on excess reserves held in the ECBs deposit facility have been applicable reveals that the impact of nominal short-term interest rates on the net interest margin increases by a factor of 10 when short-term rates are negative compared with a positive starting point.
    • This is also consistent with there being a zero lower bound on the interest rates for retail deposits.
    • The impact of low interest rates on bank profitability may change over time, but in principle the effect of longevity can operate in both directions.

3 Prospects for the pass-through of negative interest rates to deposit rates

    • Since 2014 euro area banks have only gradually moved to charging negative interest rates on customer deposits.
    • Negative rates in this segment are observed only in some euro area countries (Germany, Italy, Cyprus, the Netherlands, Finland and Belgium).
    • Corporate deposits are subject to negative rates in both the longer-term and the overnight segments, the latter being by far the most relevant category.
    • A number of structural features of the economy may explain the relevance and persistence of the zero lower bound on deposit rates.
    • For corporate deposits, existing analyses illustrate that negative rates are more likely to be passed through by stronger banks.
    • Chart B.3 The distribution of NFC deposit rates Evolution of the distribution of NFC deposit rates, across banks (percentage points) Deposit rates versus share of large loans to NFCs (x-axis: percentage of total NFC loans; y-axis: percentage points)
    • Looking ahead, banks in the euro area may find it increasingly difficult to continue charging negative rates on a significant share of their deposits.
    • Market rates are expected to remain at historically low levels for a long time, largely due to developments in the structural factors underpinning the low-rate environment.
    • Consequently, the sluggishness by which banks charge negative deposit rates more extensively will have a continuing impact on their margins and profitability.

4 Conclusion

    • Prior to the pandemic, there was already a debate as to whether the balance between supportive and dampening effects of low interest rates on euro area bank profitability was changing.
    • The main supportive effects come from the positive impact of low interest rates on the economic outlook, decreasing loan losses due to improved borrower creditworthiness, and increasing intermediation volumes.
    • The dampening effects studied in this special feature, reflect the negative impact of low rates on net interest margins.
    • Expectations are now for historically low rates to remain for even longer, still driven largely by real interest rates.
    • This is especially likely if the pass-through of negative interest rates continues to remain sluggish.
    • Behind the aggregate improvement of risk-adjusted returns in recent years, the extent and drivers of recovery differ by portfolio type (see ChartA, upper panel).
    • At the same time, volumes increased most markedly for sovereigns and, to a lesser degree, for mortgage and NFC portfolios.
    • [16] Risk-adjusted returns decline in all three scenarios, but the largest declines are under the COVID-19 severe scenario (although scenarios, samples and methodologies have changed over time).
    • [17] In all cases, returns on the household consumer credit portfolio fall the most, driven by increases in the cost of risk.
    • Furthermore, in the COVID-19 central and severe scenarios, effective interest rates remain low and cannot offset the fall in returns.
    • For household mortgage lending, effective interest rates also fall, while the cost of risk rises.

Isabel Schnabel: COVID-19 and monetary policy: Reinforcing prevailing challenges

Wednesday, November 25, 2020 - 12:09am

SPEECHCOVID-19 and monetary policy: Reinforcing prevailing challengesSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at The Bank of Finland Monetary Policy webinar: New Challenges to Monetary Policy StrategiesNine months into one of the most severe crises since World War II, we are still in the early stages of understanding the pandemics full ramifications.

Key Points: 


SPEECH

COVID-19 and monetary policy: Reinforcing prevailing challenges

    Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at The Bank of Finland Monetary Policy webinar: New Challenges to Monetary Policy Strategies

      • Nine months into one of the most severe crises since World War II, we are still in the early stages of understanding the pandemics full ramifications.
      • Some sectors of our economies may never return to their previous size.
      • Central banks may have to change how they pursue their mandates in the face of evolving consumer preferences and changing technologies.
      • Predicting the direction and scope of these shifts for monetary policy is inherently difficult.
      • At the ECB, we are doing this as part of our ongoing monetary policy strategy review.

    COVID-19 and risks to price stability

      • Let me explain each of these challenges in turn, starting with the meaning of price stability in times of low inflation.
      • In 2003, when the Governing Council conducted the last review of its monetary policy strategy, it defined price stability as being consistent with consumer price inflation of below, but close to, 2% over the medium term.
      • It agreed on this definition after a long period in which too high rather than too low inflation was the main predicament central banks were facing.
      • Over the past few years, however, inflation has fallen short of our aim.
      • Globalisation, for example, together with significant advances in the way manufactured goods are produced, has made many consumer goods cheaper over time.
      • An economy paralysed by the pandemic has pushed underlying inflation the rate of price change of less volatile goods and services to a new historical low of 0.2% in October (see slide 2).
      • Some of these price developments may prove temporary as the economy recovers from the crisis.
      • [3] A longer life expectancy can induce people to save more to smooth consumption over a longer period of time.
      • The parallel decline in trend productivity growth since the 1970s is likely to have added to price stagnation.
      • Higher output per hour is a necessary precondition for higher sustainable wages, incomes and, ultimately, prices.
      • But they can, and should, make sure that the operationalisation of their mandates the way they define and pursue price stability leaves no doubt that too low inflation is as much a concern to society as too high inflation.
      • Central banks can cater for such risks in their monetary policy frameworks by acting with the same determination to downward and upward deviations from their inflation aims.
      • This is why we are already today stressing our commitment to symmetry in our introductory statements summarising our monetary policy decisions.

    The effectiveness of monetary policy in a low rate environment

      • When the pandemic broke out in late February, we honoured this commitment by reacting forcefully to the rapidly emerging downside risks to price stability.
      • The pandemic emergency purchase programme, or PEPP, has been at the heart of our policy response.
      • [4] By stabilising market conditions at a time of exceptional uncertainty and demand for safety, the PEPP acted as an important circuit breaker that stopped the pandemic from turning into a full-blown financial crisis (see slide 4).
      • Its strong impact on the economy was in line with a rich literature that suggests that monetary policy is most effective during periods of market turmoil or when the economy is in a severe recession.
      • [5] In these circumstances, a tightening of financial conditions damages the economy more severely due to a negative multiplier effect (see left chart slide 5).
      • Monetary policy that acts to offset a tightening in financial conditions is then highly effective.
      • [6] It is likely that this state-contingent effectiveness of monetary policy is also at play in current times.
      • Heightened uncertainty, in turn, is likely to weaken the willingness and ability of firms and households to take full advantage of historically loose financial conditions.
      • [7] In these situations, monetary policy cannot unfold its full potential.
      • An important question in this debate is whether and how monetary policy transmission changes in the vicinity of the effective lower bound, and how this might affect the interaction between monetary and fiscal policy also outside crisis times.
      • At the core of these models is the Euler equation, or the IS curve, which provides two fundamental hypotheses on which policy transmission is built.
      • The first is the interest rate hypothesis the belief that aggregate demand reacts linearly to changes in real interest rates.

    Monetary policy and the interest rate hypothesis

      • The interest rate hypothesis needs closer inspection on three grounds.
      • [9] First, an emerging literature suggests that monetary policy transmission may not be linear in the level of the interest rate.
      • [12] All else equal, the lower the pass-through of interest rate changes to bank deposit rates, the smaller the effects of monetary policy on aggregate demand.
      • [15] Recent experience suggests that money illusion may not only change the nature of the interest rate channel, it may also expose central banks to widespread criticism.
      • [16] Many people may be surprised to learn that negative real interest rates are not a new phenomenon.

    The expectations hypothesis

      • This bias in peoples perception brings me to the second hypothesis the expectations hypothesis.
      • When policy space is limited, expectations become the main driver of monetary policy transmission in New Keynesian models.
      • This is why many central bank scholars have been concerned about the gradual fall in market-based inflation expectations in recent years.
      • First, a large part of the fall in market-based inflation expectations can be explained by a fall in the inflation risk premium (see left chart slide 7).
      • Empirical evidence suggests that such indicators can often provide only little additional forward-looking information about inflation, even for a horizon of only one to two years ahead.
      • [17] This raises the question of whether inflation expectations of households and firms may be more relevant than those of the market for shaping macroeconomic outcomes in line with the expectations hypothesis.
      • [19] For example, in surveys a significant fraction of consumers report very high inflation expectations often in excess of 10%.
      • But a limited understanding of actual levels does not necessarily stop people from acting on their beliefs.
      • They find either no evidence of inflation expectations affecting consumption decisions or, more disturbingly, even suggest that higher inflation expectations could lower rather than raise consumption.
      • [21] One interesting pattern that can help explain these findings is that rising inflation expectations often seem to go hand-in-hand with expectations of lower incomes and lower economic growth (see right chart slide 8).
      • [22] These findings suggest that individuals are far from being as rational and forward-looking as our canonical models assume.
      • [24] Bounded rationality may hence limit the efficacy of policies geared towards boosting inflation expectations, all the more so as new empirical evidence highlights that most households are very hesitant about adjusting their long-term inflation expectations in response to news.
      • First, fiscal policy has become more important as a macroeconomic stabilisation tool, also once we leave the pandemic behind us.
      • New research demonstrates that trust has a tangible impact on households inflation expectations.
      • We know that people once inflation is low care more about employment, which is part of the US Federal Reserves mandate.
      • But it is much harder to explain why inflation of 2% is better than 1%.

    Low inflation and the design and calibration of policy instruments

      • But what we learn from our analysis of how monetary policy transmission to the real economy may change in a low interest rate environment may ultimately also affect the way we calibrate and design our policy instruments, as well the horizon over which we want to achieve our inflation aim.
      • The first is that monetary policy faces constraints.
      • For example, we may not know precisely where the effective lower bound lies, but we know that there is one.
      • Exempting a portion of excess reserves from negative rates, or rewarding lending activities at rates below our main policy rate, have been effective instruments in stretching our boundaries.
      • The second challenge relates to the unintended side effects of monetary policy.
      • Money illusion, for example, may push house prices increasingly away from fundamentals, despite real interest rates not being extraordinarily low.
      • A third and complementary aspect is the horizon over which we want to bring inflation back to our aim.

    Conclusion

    Isabel Schnabel: COVID-19 and monetary policy: Reinforcing prevailing challenges

    Wednesday, November 25, 2020 - 12:06am

    SPEECHCOVID-19 and monetary policy: Reinforcing prevailing challengesSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at The Bank of Finland Monetary Policy webinar: New Challenges to Monetary Policy StrategiesNine months into one of the most severe crises since World War II, we are still in the early stages of understanding the pandemics full ramifications.

    Key Points: 


    SPEECH

    COVID-19 and monetary policy: Reinforcing prevailing challenges

      Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at The Bank of Finland Monetary Policy webinar: New Challenges to Monetary Policy Strategies

        • Nine months into one of the most severe crises since World War II, we are still in the early stages of understanding the pandemics full ramifications.
        • Some sectors of our economies may never return to their previous size.
        • Central banks may have to change how they pursue their mandates in the face of evolving consumer preferences and changing technologies.
        • Predicting the direction and scope of these shifts for monetary policy is inherently difficult.
        • At the ECB, we are doing this as part of our ongoing monetary policy strategy review.

      COVID-19 and risks to price stability

        • Let me explain each of these challenges in turn, starting with the meaning of price stability in times of low inflation.
        • In 2003, when the Governing Council conducted the last review of its monetary policy strategy, it defined price stability as being consistent with consumer price inflation of below, but close to, 2% over the medium term.
        • It agreed on this definition after a long period in which too high rather than too low inflation was the main predicament central banks were facing.
        • Over the past few years, however, inflation has fallen short of our aim.
        • Globalisation, for example, together with significant advances in the way manufactured goods are produced, has made many consumer goods cheaper over time.
        • An economy paralysed by the pandemic has pushed underlying inflation the rate of price change of less volatile goods and services to a new historical low of 0.2% in October (see slide 2).
        • Some of these price developments may prove temporary as the economy recovers from the crisis.
        • [3] A longer life expectancy can induce people to save more to smooth consumption over a longer period of time.
        • The parallel decline in trend productivity growth since the 1970s is likely to have added to price stagnation.
        • Higher output per hour is a necessary precondition for higher sustainable wages, incomes and, ultimately, prices.
        • But they can, and should, make sure that the operationalisation of their mandates the way they define and pursue price stability leaves no doubt that too low inflation is as much a concern to society as too high inflation.
        • Central banks can cater for such risks in their monetary policy frameworks by acting with the same determination to downward and upward deviations from their inflation aims.
        • This is why we are already today stressing our commitment to symmetry in our introductory statements summarising our monetary policy decisions.

      The effectiveness of monetary policy in a low rate environment

        • When the pandemic broke out in late February, we honoured this commitment by reacting forcefully to the rapidly emerging downside risks to price stability.
        • The pandemic emergency purchase programme, or PEPP, has been at the heart of our policy response.
        • [4] By stabilising market conditions at a time of exceptional uncertainty and demand for safety, the PEPP acted as an important circuit breaker that stopped the pandemic from turning into a full-blown financial crisis (see slide 4).
        • Its strong impact on the economy was in line with a rich literature that suggests that monetary policy is most effective during periods of market turmoil or when the economy is in a severe recession.
        • [5] In these circumstances, a tightening of financial conditions damages the economy more severely due to a negative multiplier effect (see left chart slide 5).
        • Monetary policy that acts to offset a tightening in financial conditions is then highly effective.
        • [6] It is likely that this state-contingent effectiveness of monetary policy is also at play in current times.
        • Heightened uncertainty, in turn, is likely to weaken the willingness and ability of firms and households to take full advantage of historically loose financial conditions.
        • [7] In these situations, monetary policy cannot unfold its full potential.
        • An important question in this debate is whether and how monetary policy transmission changes in the vicinity of the effective lower bound, and how this might affect the interaction between monetary and fiscal policy also outside crisis times.
        • At the core of these models is the Euler equation, or the IS curve, which provides two fundamental hypotheses on which policy transmission is built.
        • The first is the interest rate hypothesis the belief that aggregate demand reacts linearly to changes in real interest rates.

      Monetary policy and the interest rate hypothesis

        • The interest rate hypothesis needs closer inspection on three grounds.
        • [9] First, an emerging literature suggests that monetary policy transmission may not be linear in the level of the interest rate.
        • [12] All else equal, the lower the pass-through of interest rate changes to bank deposit rates, the smaller the effects of monetary policy on aggregate demand.
        • [15] Recent experience suggests that money illusion may not only change the nature of the interest rate channel, it may also expose central banks to widespread criticism.
        • [16] Many people may be surprised to learn that negative real interest rates are not a new phenomenon.

      The expectations hypothesis

        • This bias in peoples perception brings me to the second hypothesis the expectations hypothesis.
        • When policy space is limited, expectations become the main driver of monetary policy transmission in New Keynesian models.
        • This is why many central bank scholars have been concerned about the gradual fall in market-based inflation expectations in recent years.
        • First, a large part of the fall in market-based inflation expectations can be explained by a fall in the inflation risk premium (see left chart slide 7).
        • Empirical evidence suggests that such indicators can often provide only little additional forward-looking information about inflation, even for a horizon of only one to two years ahead.
        • [17] This raises the question of whether inflation expectations of households and firms may be more relevant than those of the market for shaping macroeconomic outcomes in line with the expectations hypothesis.
        • [19] For example, in surveys a significant fraction of consumers report very high inflation expectations often in excess of 10%.
        • But a limited understanding of actual levels does not necessarily stop people from acting on their beliefs.
        • They find either no evidence of inflation expectations affecting consumption decisions or, more disturbingly, even suggest that higher inflation expectations could lower rather than raise consumption.
        • [21] One interesting pattern that can help explain these findings is that rising inflation expectations often seem to go hand-in-hand with expectations of lower incomes and lower economic growth (see right chart slide 8).
        • [22] These findings suggest that individuals are far from being as rational and forward-looking as our canonical models assume.
        • [24] Bounded rationality may hence limit the efficacy of policies geared towards boosting inflation expectations, all the more so as new empirical evidence highlights that most households are very hesitant about adjusting their long-term inflation expectations in response to news.
        • First, fiscal policy has become more important as a macroeconomic stabilisation tool, also once we leave the pandemic behind us.
        • New research demonstrates that trust has a tangible impact on households inflation expectations.
        • We know that people once inflation is low care more about employment, which is part of the US Federal Reserves mandate.
        • But it is much harder to explain why inflation of 2% is better than 1%.

      Low inflation and the design and calibration of policy instruments

        • But what we learn from our analysis of how monetary policy transmission to the real economy may change in a low interest rate environment may ultimately also affect the way we calibrate and design our policy instruments, as well the horizon over which we want to achieve our inflation aim.
        • The first is that monetary policy faces constraints.
        • For example, we may not know precisely where the effective lower bound lies, but we know that there is one.
        • Exempting a portion of excess reserves from negative rates, or rewarding lending activities at rates below our main policy rate, have been effective instruments in stretching our boundaries.
        • The second challenge relates to the unintended side effects of monetary policy.
        • Money illusion, for example, may push house prices increasingly away from fundamentals, despite real interest rates not being extraordinarily low.
        • A third and complementary aspect is the horizon over which we want to bring inflation back to our aim.

      Conclusion

      ICE Benchmark Administration expands ICE Term SONIA Reference Rates methodology to include Tradeweb’s Dealer to Client data

      Tuesday, November 24, 2020 - 11:22am

      Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announces that ICE Benchmark Administration Limited (IBA) has expanded the input data used in its ICE Term SONIA Reference Rates Waterfall methodology to include Tradewebs dealer to client data.

      Key Points: 
      • Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announces that ICE Benchmark Administration Limited (IBA) has expanded the input data used in its ICE Term SONIA Reference Rates Waterfall methodology to include Tradewebs dealer to client data.
      • In July 2020, IBA launched an initial, beta version of its ICE Term SONIA Reference Rates (ICE TSRR).
      • We are pleased that ICE has chosen to include Tradeweb data in its Waterfall methodology for Term SONIA Reference Rates, said Lisa Schirf, Managing Director, Global Head of Data Strategy at Tradeweb.
      • ICE TSRR beta rates are published daily on the ICE Term Risk Free Rates (RFR) Portal , a comprehensive data source for market participants of risk free and alternative reference rates.

      Working group on euro risk-free rates launches two public consultations on fallbacks to EURIBOR

      Tuesday, November 24, 2020 - 12:05am

      PRESS RELEASE

      Key Points: 
      • PRESS RELEASE

        Working group on euro risk-free rates launches two public consultations on fallbacks to EURIBOR

        23 November 2020

        The working group on euro risk-free rates has today released two public consultations on the topic of fallback rates to EURIBOR.

      • Fallback rates are rates that can be relied upon in case of an unavailability of the main rate.
      • In the other consultation, stakeholders are invited to give their views on potential events that could trigger such fallback measures.
      • As regards STR-based fallback rates, the working group considered two types of rates:

        1) Forward-looking rates which are based on the derivatives markets referencing the STR and which reflect market expectations of the evolution of the STR.

      Working group on euro risk-free rates launches two public consultations on fallbacks to EURIBOR

      Monday, November 23, 2020 - 4:05pm

      PRESS RELEASE

      Key Points: 
      • PRESS RELEASE

        Working group on euro risk-free rates launches two public consultations on fallbacks to EURIBOR

        23 November 2020

        The working group on euro risk-free rates has today released two public consultations on the topic of fallback rates to EURIBOR.

      • Fallback rates are rates that can be relied upon in case of an unavailability of the main rate.
      • In the other consultation, stakeholders are invited to give their views on potential events that could trigger such fallback measures.
      • As regards STR-based fallback rates, the working group considered two types of rates:

        1) Forward-looking rates which are based on the derivatives markets referencing the STR and which reflect market expectations of the evolution of the STR.

      Turkiye Garanti Bankasi A.S.: Announcement regarding Syndicated Loan Agreement

      Thursday, November 19, 2020 - 7:03am

      On 18.11.2020 our Bank has signed a syndicated loan agreement with 367 days maturity in the amount of US $ 267.500.000 and 312.000.000 comprising of two separate tranches.

      Key Points: 
      • On 18.11.2020 our Bank has signed a syndicated loan agreement with 367 days maturity in the amount of US $ 267.500.000 and 312.000.000 comprising of two separate tranches.
      • The loan which will be used for trade finance purposes has been executed with commitments received from 30 financial institutions from 18 countries.
      • The all-in cost for USD and EUR tranches have been realized as Libor + 2.50% and Euribor + 2.25% respectively.
      • The total loan amount may be increased with new participations through the accordion terms under the agreement.