Fitch Ratings Global Banking Conference 2014 Highlights

Thu Jun 5, 2014 2:03pm EDT

Related Topics

(The following statement was released by the rating agency) NEW YORK, June 05 (Fitch) Fitch Ratings today held the first of its annual Global Banking Conferences in 2014 in New York. Below follow some highlight comments from the presentations. The conferences, continuing in Asia and Europe in the coming weeks, will discuss key expected developments in global banking this year and how these will affect bank credit ratings. David Weinfurter, Global Head, Financial Institutions: 'At the Global Banking Conferences Fitch is focusing on key analytical drivers for banks, such as trends in the macro-economic environment, changes in bank fundamentals and evolving regulation, and how those collectively impact ratings. We also highlight our new Ratings Navigator, a two-page visual representation of a bank's rating, summarizing fundamental and support factors and including peer metrics, and emphasize the stability of our FI rating framework, including our long-standing analytical comfort with rating FI sub and hybrid issues.' James McCormack, Global Head, Sovereign and Supranational Group: 'The convergence of sovereign ratings over the last several years, with downgrades in many developed markets and upgrades across emerging markets, has ended. Ratings in the Eurozone have stabilized on the back of better funding conditions and reductions in fiscal and external balances. Emerging market ratings, on the other hand, are faced with structural growth impediments in some countries, flat commodity prices, more challenging external funding conditions and pockets of heightened geopolitical and domestic political risks.' Joo-Yung Lee, Managing Director, U.S. Financial Institutions: 'Global trading and universal banks are in a period of transition as the regulatory landscape continues to evolve. Earnings remain pressured in 2014 due to weaker trading revenues and conduct costs. That said, Fitch believes the group is adapting to change with continued balance sheet and liquidity strengthening as they comply with Basel III standards.' James Longsdon, co-Head, EMEA Financial Institutions: 'Sovereign support for banks now looks increasingly unlikely for the majority of banks in the EU and US in light of regulators' efforts to reduce the burden placed on taxpayers if banks fail. Fitch is likely to downgrade around 65 banks' IDRs and senior debt ratings over the next 1-2 years and these banks are on Negative Outlook. The majority are in western Europe, where around a third of bank ratings are driven directly or indirectly by sovereign support assumptions. In many other parts of the world, for example Asia, Latin America and the Middle East, we see far less progress or urgency to update bank resolution frameworks and thus see support propensity for major banks remaining high. A key component of bank resolution is ensuring that banks have sufficient liabilities that can be bailed in. Banks are awaiting clarification and direction from regulators regarding the size, and possibly mix, of such buffers. It seems likely that some banks will elect to maintain large buffers of junior debt to cushion senior bondholders.' For more information, visit 'www.fitchratings.com' and click on the tab marked 'Events' located at the top right of the web page. Contact: David Weinfurter Managing Director, Head of Global Financial Institutions +44 (0) 20 3530 1505 Fitch Ratings, Inc., 30 North Colonnade, London E14 5GN Joo-Yung Lee Managing Director, North American Financial Institutions +1-212-908-0560 James Longsdon Managing Director, EMEA Financial Institutions +44 (0)20 3530 1076 James McCormack Global Head, Sovereign and Supranational Group +44 (0) 20 3530 1286 Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email: brian.bertsch@fitchratings.com; Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com. Additional information is available on www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

FILED UNDER: