Weekly Global News Wrap: Global banking systems may need restructuring; Major UK banks scrap dividend payments

And Goldman Sachs, Morgan Stanley OK’d for majority stakes in China ventures.

From Reuters

Some countries’ banking systems may have to be recapitalised or even restructured if their economies are significantly affected by the extended disruption caused by the coronavirus, the International Monetary Fund (IMF) said.

Whilst the IMF did not specify which economies are particularly vulnerable, the warning from the world’s top rescue fund marks a salient shift in tone from other regulators and bank chiefs, especially in the US, who have said lenders are strong enough to withstand the crisis.

The regulator hinted that reserves in some regions may not be sufficient to overcome a prolonged economic crisis, with governments recently warning that wide-scale lockdowns may continue for months.

From Reuters

UK’s major banks such as Barclays, HSBC, Lloyds, Royal Bank of Scotland, Standard Chartered and Santander’s British arm have all suspended dividend payments after pressure from the regulator, saving their capital against buffer losses due to the pandemic.

The move came in response to a request from the Prudential Regulatory Authority (PRA), which also asked banks and insurers not to pay senior staff bonuses this year.

The lenders had been due to pay out over $9.93b between them in 2019 dividends, with HSBC the biggest payer at $4.2b.

From Reuters

Goldman Sachs and Morgan Stanley have received final regulatory approvals to take majority stakes in their China securities joint ventures.

The banks got the nods from the China Securities Regulatory Commission to raise their stakes in Goldman Sachs Gao Hua Securities and Morgan Stanley Huaxin Securities from 33% to 51% and 49% to 51%, respectively.

Beijing promised to scrap foreign ownership caps on securities firms and mutual funds for foreign investors from April 1, in an interim Sino-US trade deal signed in January.

Photo courtesy of Wikimedia Commons.