BREAKING NEWS FROM CNBC >>> UBS ends Credit Suisse dependence on Swiss central bank loan.
UBS on Friday said that it has ended a 9 billion Swiss franc ($10.27 billion) loss protection agreement and a 100 billion Swiss franc publicly liquidity backstop that were put in place by the Swiss government when it took over rival Credit Suisse in March. UBS said the decision followed a “comprehensive assessment” of Credit Suisse’s non-core assets that were covered by the liquidity support measures. Credit Suisse also fully repaid the emergency liquidity assistance loan of 50 billion Swiss francs to the Swiss National Bank in March, as Credit Suisse teetered after a collapse in shareholder and investor confidence. “These measures, which were created under emergency law to preserve financial stability, will thus cease to exist, and the Confederation and taxpayers will no longer bear any risks arising from these guarantees,” the Swiss government said in a statement Friday. “Furthermore, the Confederation earned receipts of around CHF 200 million on the guarantees.”
Total credit card indebtedness increased by $45 billion in the April-through-June period, an increase of more than 4%
That took the total amount owed to $1.03 trillion, the highest gross value in Fed data going back to 2003. The increase in the category was the most notable area as total household debt edged higher by about $16 billion to $17.06 trillion, also a fresh record. As card use grew, so did the delinquency rate. The Fed’s measure of credit card debt 30 or more days late rose to 7.2% in the second quarter, up from 6.5% in Q1 and the highest rate since the first quarter of 2012 though close to the long-run normal, central bank officials said. Total debt delinquency edged higher to 3.18% from 3%. Source: CNBC
Italian banks slump after government introduces windfall tax
Deputy PM Salvini announced a 40% levy on extra profits of lenders for 2023 as part of a wide-ranging decree approved at a cabinet meeting. Analysts estimate it will wipe 19% from bank earnings. Levy targets higher interest incomes following rate hikes by ECB. Source: Bloomberg, HolgerZ
There is always a bear market somewhere...
The meltdown in US commercial and industrial (C&I) loan growth is staggering. Cumulative C&I lending is -1.0% since the start of 2023 (red). Median growth by this point in the year is +4.5% (black), while 2022 was up +9.3% by this point (blue). Big US investment slump is underway... Source: Robin Brooks