The European Central Bank (ECB) has just upped the ante on prudential provisioning. Earlier this year it introduced guidelines to exhort banks to reduce stocks of nonperforming exposures (NPEs), and now its new draft proposal aims to ensure that NPEs are sufficiently provisioned.
On Sunday 1 October, Catalonia held a controversial referendum for independence. The vote was deemed unconstitutional by the Spanish Constitutional Court and the central government tried to prevent it from taking place by ordering police and security force reinforcements to seize ballots and close polling locations.
Japan’s Prime Minister Shinzo Abe decided to dissolve Japan’s parliament and call a general election for 22 October. PM Abe is seeking to take advantage of an improvement in opinion polling following his robust objections in international media to successive missile tests by North Korea.
At the FOMC meeting on September 19 and 20, members charted the central bank’s so-called dot plot of expected rates for the years out to 2020, involving one interest rate hike in 2017, three in 2018, two in 2019 and only one in 2020, leading to an end figure of 2.875% vs. 1.125% currently.