Here’s the information you need to know from key articles and news reports for the week of August 3oth, 2018.
Fed gives Deutsche Bank, others extension on “living will” submissions (source)
- The resolution plans, commonly known as living wills, require large banks to detail how they could be unwound in cases of bankruptcy without disrupting the broader financial system. If regulators do not find a plan credible, they could impose restrictions on a banks activities or even order it to divest.
- Typically, banks with over $50 billion in assets have been required to submit plans annually.
- The Federal Reserve said on Thursday, August 30, that it was giving Deutsche Bank AG and 4 other financial institutions an additional year to submit “living wills” detailing how they could be safely dissolved in a crisis.
- The Fed, along with the Federal Deposit Insurance Corp., said that Deutsche, Barclays PLC, Credit Suisse Group AG and UBS AG would now be required to submit those living wills by July 1, 2020.
- This extension allows the regulators to provide additional feedback and give them more time to prepare the new plans
Argentina hikes interest rate to 60%; Peso Plunges (source)
- Argentina’s Central Bank on Thursday (08/30/18) increased its benchmark interest rate to 60% – the world’s highest – in an effort to halt a sharp slide in the value of the peso, which has plunged to a record low.
- The peso fell more than 15% against the dollar on Thursday, trading at 40.5 per USD, after slipping almost 7% the day before.
- The interest rate increase went from 15% to 60%
- This came 1 day after President Macri said he was asking for an early release of some IMF funds under a $50 billion backup financing arrangement.
- Argentines are continuing to lose purchase power, and say that “hyperactivity starts to look like desperation.”