US Banks Report Good Earnings, But Warn Of Hit If No More Stimulus

Large US banks reported better-than-expected results Tuesday on an improving economy, but cautioned that the recovery could falter if Washington fails to enact new stimulus measures.

“It’s important and it needs to happen as quickly as possible,” said Citi Chief Financial Officer Mark Mason, who added that massive spending from Washington has helped avert a tidal wave of delinquencies so far.

JPMorgan Chase executives warned of a “double-dip” recession if there is not another package. That takes place when a second period of economic contraction follows an initial recovery.

“The people we need to help the most are small businesses and the unemployed,” said JPMorgan Chief Executive Jamie Dimon, who said Washington’s actions will determine whether it needs to take much higher reserves for bad loans.

“If the better outcomes happen” with a good a stimulus package, “we are over reserved by $10 billion,” he said. But if there is

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Stocks slip as Eli Lilly halts COVID-19 trials, banks cautious on recovery

Stocks closed lower on Tuesday as investors weighed earnings from the big banks and another coronavirus vaccine setback.

The Dow Jones Industrial Average slipped, as did the S&P 500 while the Nasdaq Composite was little changed.

Ticker Security Last Change Change %
SP500 S&P 500 3511.93 -22.29 -0.63%
I:COMP NASDAQ COMPOSITE INDEX 11863.895513 -12.36 -0.10%
I:DJI DOW JONES AVERAGES 28679.81 -157.71 -0.55%

Eli Lilly, joined Johnson & Johnson, in halting its trials of a COVID-19 vaccine over safety concerns.

Ticker Security Last Change Change %
LLY ELI LILLY & COMPANY 150.08 -4.41 -2.85%
JNJ JOHNSON & JOHNSON 148.36 -3.48 -2.29%

Financials, as a group, were the biggest drag on the S&P 500 despite solid results from JPMorgan which reported a third-quarter that

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Banks in Germany told to brace for post-pandemic bankruptcies

Deutsche Bundesbank
Deutsche Bundesbank in Berlin, Germany. Photo: Ullstein bild via Getty Images

Germany’s central bank has warned that banks in the country need to brace for a potential wave of insolvencies in the wake of this year’s coronavirus pandemic, which hit Europe’s largest economy hard.

In its 2020 financial stability report, the Bundesbank said that government measures implemented to cushion the blow, including temporary suspension of bankruptcy-declaration requirements, have meant fewer insolvencies were filed this year compared with 2019.

However, that could change early next year. “Our simulations predict that insolvencies and value adjustments will increase in the future,” said Bundesbank vice-president Claudia Buch at the presentation of the report.

The bank predicts some 6,000 insolvencies in the first quarter of 2021, compared with 4,700 in total in 2020, but noted that it “cannot rule out that … a lot more companies will go bankrupt than is currently expected.”

Watch: What

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G20 Eyeing Six-month Debt Relief Extension: World Bank’s Malpass

G20 countries may only approve a six-month debt relief extension amid lagging committment to the pact meant to help poor nations weather the pandemic, World Bank President David Malpass said on Monday.

The G20 group of largest economies is set to meet Wednesday after they pledged in April to suspend debt service from the world’s poorest countries through the end of the year as they faced a sharp economic contraction caused by Covid-19.

However, Malpass said relief has been weaker than expected because “not all of the creditors are participating fully,” with only $5 billion granted under the expected $8 to $11 billion, and China among the countries that holding back.

Even with the pandemic still raging, he said another full year of debt suspension is unlikely.

“I think there will be compromise language (on) maybe a six-month extension that can be renewed depending on debt sustainability,” he told reporters.

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World Bank’s Malpass says G20 may agree to only 6-month debt relief extension

By David Lawder

WASHINGTON, Oct 12 (Reuters)Some G20 creditor countries are reluctant to broaden and extend another year of coronavirus debt service relief to the world’s poorest countries, so a six-month compromise may emerge this week, World Bank President David Malpass said on Monday.

Malpass, speaking to reporters as the World Bank’s and International Monetary Fund’s virtual annual meetings get underway, said G20 debt working groups have not reached agreement on the two institutions’ push for a year-long extension of the G20 Debt Service Suspension Initiative (DSSI).

“I think there may be compromise language that may be a six month extension (and) that it can be renewed depending on debt sustainability,” Malpass said.

Finance ministers and central bank governors from the G20 major economies are scheduled to meet by videoconference on Wednesday. In May, they launched an initiative to allow poor countries to suspend payments on

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Earnings Preview: Big 6 Banks Should See Solid Profit Growth

Big bank profits will highlight the unofficial start of the third quarter earnings season this week, with investors looking for sequentially improving performance, as well as a guide on economic trends heading into the final months of the year. 

With the Federal Reserve keeping its cap on dividend and buybacks in place until at least 2021 in order to ensure that lenders have enough capital to absorb a protracted downturn triggered by the coronavirus pandemic, investors will be looking to see how each of the largest U.S. banks will manage both their credit provisions and near-term economic forecasts as they publish third quarter earnings throughout the week.

Under the Fed’s restrictions, banks will be limited to paying dividends that are either in line with payouts from last year or equal to an average of earnings for the previous four quarters. 

The six biggest U.S. banks — JPMorgan Chase, Citigroup, Bank

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Uganda banks, MTN, Airtel hacked by mobile money fraudsters



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© Provided by Quartz


A major hack that compromised Uganda’s mobile money network has plunged the country’s telecoms and banking sectors into crisis.

The Oct. 3 hack was a result of a security breach on a consumer finance aggregator, Pegasus Technologies, which mainly affected bank to mobile wallet transfers, according to an Oct. 8 statement by MTN Uganda, the country’s largest mobile phone company. Kampala-based Pegasus Technologies provides financial and billing solutions for various companies including all the affected entities.

At least $3.2 million is estimated to have been stolen in this latest incident with some reports quoting a much higher figure. The hackers used around 2,000 mobile SIM cards to gain access to the mobile money payment system, according to local papers. They then instructed the banks to transfer millions of dollars to telecommunication companies who then paid out mobile money to these different SIM cards across the country.

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Banks have barely touched the Fed’s Main Street Lending Program. Except this one.

Most banks have steered clear of the Federal Reserve’s loan program designed to buoy midsize businesses. One Florida lender is diving in.

Miami-based City National Bank of Florida has embraced the Fed’s Main Street Lending Program, which made its first loan this summer. Of the 252 loans issued through the program in its first three months, City National made nearly 100 of them, extending loans of up to $50 million to companies in states as far away as California and Wyoming.

But otherwise the program, which lets banks make loans to businesses and then sell most of the loan to the Fed, has received a lukewarm reception at best. Fewer than 100 banks have used it, as of the end of September, issuing about $2 billion of loans in a $600 billion program. More than $500 million

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Central banks unveil framework, plans for hybrid digital currency

Friday's report was compiled by BIS, the Bank of England, the U.S. Federal Reserve, Bank of Canada, Bank of Japan, the European Central Bank, Sveriges Riksbank and the Swiss National Bank. File Photo by Canadastock/Shutterstock/UPI

Friday’s report was compiled by BIS, the Bank of England, the U.S. Federal Reserve, Bank of Canada, Bank of Japan, the European Central Bank, Sveriges Riksbank and the Swiss National Bank. File Photo by Canadastock/Shutterstock/UPI

Oct. 9 (UPI) — The Bank of International Settlements and seven central banks around the world published a report Friday that set a framework for a digital currency to work in conjunction with paper money.

The report highlights three key elements of the proposal — cryptocurrency coexisting with cash in a flexible payment system, supporting wider policy objectives and promoting innovation and efficiency.

“This report is a real step forward for this group of central banks in agreeing on the common principles and identifying the key features we believe would be needed for a workable [central bank digitalcurrency] system,” Jon Cunliffe, the deputy governor for the Bank of England, said in a statement.

Along with

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Central banks sketch out digital currency as China forges ahead

By Huw Jones and Tom Wilson



FILE PHOTO: Representations of Bitcoin, Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, ruro and Jordanian dinar banknotes are seen in this illustration


© Reuters/DADO RUVIC
FILE PHOTO: Representations of Bitcoin, Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, ruro and Jordanian dinar banknotes are seen in this illustration

LONDON (Reuters) – A group of seven major central banks including the U.S. Federal Reserve set out on Friday how a digital currency could look like to help catch up with China’s “trail blazing” and leapfrog private projects like Facebook Inc’s Libra stablecoin.



FILE PHOTO: A small toy figure is seen on representations of the virtual currency on a displayed European Union flag and the Facebook Libra logo in this illustration picture


© Reuters/DADO RUVIC
FILE PHOTO: A small toy figure is seen on representations of the virtual currency on a displayed European Union flag and the Facebook Libra logo in this illustration picture

The central banks and the Bank for International Settlements (BIS), said core features should include resilience, availability at low or no cost, appropriate standards and clear legal framework, and an appropriate role for the private sector.

Bank of England (BoE) Deputy Governor and

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