Financial Systems

Early equity optimism in Europe driven by the positive manufacturing data from China was erased amid new trade concerns, political risk in Germany and worse-than-expected US manufacturing data.

The Capital Flows to Emerging Markets are normally associated to positive consequences but unfortunately can have perverse effects when they slow down or suddenly stop. A simple model of “Pull & Push” factors can be useful to understand the driver behind the capital flows to EMs both in the past and in the future.

The European Commission has presented an Action Plan to promote innovation in the financial sector, setting the roadmap for fintech in Europe. Most initiatives are positive for the EU financial market, but more ambition is needed if Europe aims to become a global fintech hub.

In this issue we review: Trends and developments in the Spanish banking sector. Spanish banks’ ROE, COE and P/BV ratio. Evolution of the financial burden of families in Europe. Management of non-performing assets in Europe. Peru: deposits in soles and exchange rate expectations.

Los depósitos en el sistema financiero peruano se establecen en soles y en US$. Los primeros mantienen, principalmente, la función de transaccional de la economía y los segundos como depósito de valor. En los trasvases de uno a otro, el tipo de cambio y las expectativas sobre el mismo juegan un papel relevante.

The international community, and especially the rest of Europe, is holding its breath over the referendum to be held in Italy on 4 December. Ratification of the constitutional reform seeking among other things to curtail the powers of the Senate, is crucial if a new period of political and financial instability is to be avoided.

NPL ratios are much higher in peripheral countries than in core countries (as well as coverage ratios); The stress test might have been benign for some banking sectors; The cost of risk in the stress test does not stay at 2013 levels as impairments in 2014 are usually lower than those of 2013.