Publications

The weekly growth of FX-adjusted credits continued to decelerate in the first week of September from 0.6% to 0.2% due to commercial credits in the overall sector and consumer credits of private banks, as has been happening since mid-August.

The financial system remains strong in Uruguay. Financial intermediation, the core business of the banking sector, is expanding without losing quality. The current situation provides a good starting point to face the pending challenges.

Banks remain critical for supporting the economy during the crisis. Total bank loan growth will slow and deposit growth revert to normal rates. Banks will be operating with higher levels of deposits relative to loans, credit quality will deteriorate and profitability edge down, but systemic risks remain contained.

The Covid-19 pandemic that escalated in the first quarter of this year will have a dramatic impact on the U.S. banking sector. The effects will range from direct and immediate to indirect and long-term that will only emerge in the wake of the crisis.

Despite solid profitability trends, banking conditions could become somewhat more challenging. Sustainable loan growth, higher funding costs and credit risks will be the primary areas of concern. Customer service, digital tools and economies of scale are key for success.

This paper evaluates the macroeconomic effects of taxes on banking in a small open economy in a currency union for three tax alternatives: an additional tax on profits, on deposits, and on loans. We propose a DSGE model with a rich detail of taxes and a banking sector and show that these three taxes are equivalent in their effects on macroeconomic variables.

The ECB announced recently that it is studying the possibility of centralising emergency liquidity assistance (ELA) for banks in difficulties. At present the responsibility for this window lies with the national central banks, although with the authorisation of the ECB above certain limits.

Online lenders to small businesses use innovative methods to gauge creditworthiness. Banks can leverage their big data capabilities to more effectively serve customers. Small businesses customers heavily favor face-to-face interaction, making the retail bank indispensable.