Скачать или смотреть NeuGroup's Bank Treasurers' Peer Group 2020 H2 Meeting Founder's KTAs

NeuGroup Founder and CEO Joseph Neu shares his key takeaways from the Bank Treasurers' Peer Group 2020 H2 meeting sponsored by Morgan Stanley.

Banks have enough capital. The expectation is that US banks will pass the next two stress tests, even with Covid-19 inspired stress scenarios, indicating everyone is well-capitalized. This will free up buybacks and dividends for those that have had them halted for political reasons.

The war is over ... for deposits. The massive liquidity infusion by the Fed, stimulus and a NIM-unfriendly rate environment have ended the war for deposits that banks in the US were waging pre-COVID. Instead, US banks are actually turning away deposits, especially by adjusting pricing and fees to discourage them. Indeed, if you take a close look at ECR and fees, you may already be paying your bank to hold your money.

A Democratic sweep is NIM friendly. The outlook for the banking sector will be much improved if the Democrats take the White House and the Senate in the upcoming election. This would end the log jam on fiscal stimulus, making bank reserves for credit losses suddenly excessive, plus with likely infrastructure spending, it will push up inflation expectations to the point where the long-end of the curve may rise and become more NIM friendly--all good news for banks. The bad news is that the regulatory edicts that raise their cost of capital and liquidity will tick up, too, and banks already are losing their competitive edge to less-regulated funding platforms.