Support to mitigate unemployment risks in an emergency

The safe asset potential of EU-issued bonds

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Saturday, January 21, 2023
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The lack of euro-denominated safe assets and the fragmentation of the market are problematic.

Key Points: 
  • The lack of euro-denominated safe assets and the fragmentation of the market are problematic.
  • In the absence of a supranational euro-denominated safe asset, a flight to safety would entail capital flowing out of vulnerable countries and into safe havens.
  • Both initiatives were proposed in the context of the EU’s response to the recession in the wake of the coronavirus (COVID-19) pandemic.
  • As of December 2021, the amount of outstanding EU bonds had grown to €215 billion in total.
  • The first SURE bonds were issued in October 2020, while the first NGEU bonds were issued in June 2021.
  • By 2028 NGEU volumes are foreseen to reach €800 billion, more than twelve times the level in December 2021.
  • Including the approved funding for other smaller programmes, the total available amount of EU bonds is set to exceed €1 trillion by 2028.
  • This stability of EU yield spreads does not mean that EU bonds will automatically become a supranational euro-denominated safe asset.
  • A safe asset is traded in liquid markets.
  • Market liquidity ensures that investors can sell their asset at any time without causing a major change in the market price.
  • (2022) we also argue that a safe asset’s market liquidity should be sufficiently high to accommodate central banks’ monetary policy operations.
  • Finally, the perception of EU bonds as safe assets also hinges on the continuation of their favourable regulatory treatment.
  • For such an instrument to be viable, a deep and liquid repo market would need to evolve first.

ECB reviews its risk control framework for credit operations

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Monday, January 16, 2023
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- PRESS RELEASE

Key Points: 
  • - PRESS RELEASE
    ECB reviews its risk control framework for credit operations
    20 December 2022
    - Haircut schedules for assets used as collateral in monetary policy operations to be updated with effect from 29 June 2023
    - Measures aim to ensure adequate level of risk protection, improve consistency of framework and enhance risk equivalence of assets, while ensuring collateral availability
    - Measures based on ECB’s pre-pandemic risk tolerance levels for credit operations
    The European Central Bank (ECB) today announced the results of the most recent review of its risk control framework for collateralised credit operations.
  • The ECB also communicated that it would implement a new valuation haircut schedule for credit operations based on its pre-pandemic risk tolerance levels.
  • Following the review, the ECB decided on several measures to improve the overall consistency of the risk control framework which will take effect from 29 June 2023.
  • The ECB regularly reviews the framework to ensure an adequate level of risk protection and to achieve risk equivalence across asset classes.

DGAP-News: Ferratum Capital Germany GmbH: Multitude SE publishes Q1 2022 results

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Thursday, May 12, 2022
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These factors are considered to further contribute to the Groups revenue growth which already shows an increase of EUR 1.5 million (+2.9%) when comparing Q1 2022 and Q1 2021 results.

Key Points: 
  • These factors are considered to further contribute to the Groups revenue growth which already shows an increase of EUR 1.5 million (+2.9%) when comparing Q1 2022 and Q1 2021 results.
  • In comparison, the results of the Groups continuing operations for the comparative period Q1 2021 amounted to EUR 6.2 million, EUR 1.4 million, and EUR 0.6 million, respectively.
  • Fitch Ratings has revised the Outlook on Multitude SE's (Multitude) Long-Term Issuer Default Rating (IDR) to Stable from Negative and affirmed the rating at 'B+' in February 2022.
  • The senior unsecured notes issued by Ferratum Capital Germany GmbH (Ferratum Capital Germany) were affirmed at 'B+'/RR4 and the subordinated hybrid perpetual capital notes issued by Multitude were affirmed at 'B-'/RR6.

DGAP-News: Multitude SE publishes Q1 2022 results

Retrieved on: 
Thursday, May 12, 2022
Multitude, Fitch Ratings, Depreciation, EUR, Bank, Tax, HC, Support to mitigate unemployment risks in an emergency, Marketing, SSR, Frankfurt Stock Exchange, Technology, IDR, Group, Growth, Outlook, Film, Security (finance)

Despite the EUR 2.3 million (+14.2%) increase in impairment losses to customers when comparing Q1 2022 and Q1 2021, the Groups impaired loan coverage ratio (ILCR) shows a decreasing trend from 27.6% at the end of Q1 2021 and 21.6% at the end of Q4 2021 all to just 21.1% at the end of Q1 2022.

Key Points: 
  • Despite the EUR 2.3 million (+14.2%) increase in impairment losses to customers when comparing Q1 2022 and Q1 2021, the Groups impaired loan coverage ratio (ILCR) shows a decreasing trend from 27.6% at the end of Q1 2021 and 21.6% at the end of Q4 2021 all to just 21.1% at the end of Q1 2022.
  • These factors are considered to further contribute to the Groups revenue growth which already shows an increase of EUR 1.5 million (+2.9%) when comparing Q1 2022 and Q1 2021 results.
  • In comparison, the results of the Groups continuing operations for the comparative period Q1 2021 amounted to EUR 6.2 million, EUR 1.4 million, and EUR 0.6 million, respectively.
  • Fitch Ratings has revised the Outlook on Multitude SE's (Multitude) Long-Term Issuer Default Rating (IDR) to Stable from Negative and affirmed the rating at 'B+' in February 2022.