The Fed's message has achieved its goal. The stock markets, reassured by the words of the president of the American central bank on the confirmation of the "soft" policy on the interest rate front, started to run again. Different story for bonds: The strongest growth rate since 1984 will bring with it some inflation, but it will only be a temporary flare: the consumer price indicator used by the Fed for this forecast is estimated at 2,2 % this year, but already in 2022 it should return to 2%, around the maximum ceiling.
Among the various indications provided by Jay Powell, one is destined to have particular value for US banks. The central bank reassured the market on a very delicate issue: the deadline at the end of March of the legislation that allows banks not to include Treasuries in their portfolios, in the calculation that leads to the definition of the ratio between primary capital and leveraged positions not to be exceeded . A technical aspect but of great importance because a change of course could have had a significant impact on the trend of loans to the economy. But the Fed reiterated that it has no problem taking a step back, with obvious benefits for the continuation of the post-pandemic rally.
Meanwhile, the ECB has also made its contribution to the recovery of the banking sector, just to celebrate "Peppy day". In fact, today is Pepp's birthday. Just a year ago the ECB launched its Pandemic Emergency Purchase Program to support the economies of the euro area. The initial allocation was 750 billion euros, more than doubled to 1.850 billion. Just to celebrate, the index Stoxx of the European banking sector moves sharply and reaches new highs for 12 months thanks to the rally of the two German giants: Commerzbank +4% e Deutsche Bank +3,5% in turn "drugged" by the rebound of the auto sector.
But what reassured the European banks were above all the messages arriving from the Supervision of the central bank: the risk that the breakdowns caused by the pandemic to the bank accounts are so heavy as to unload an unsustainable wave of non-performing loans on the balance sheets. The worst scenario, 1.400 billion new NPLs, seems "less probable" today, said Elisabeth McCaul, a close collaborator of the Supervisory Board chaired by Andrea Enria who on Wednesday instead gave her assent to a limited disbursement of the already "frozen" dividends , a move that has made it possible, Enria himself said, to strengthen the solidity of the banking system. But he himself wanted to confirm that the recommendation is of an exceptional nature and that, if the conditions of uncertainty subside, the banks will be able to return to their ordinary dividend distribution policy by next autumn. In the meantime yes to the distribution of a total dividend of 10 billion euros (about a third of the level expected before the Supervisory recommendations). In short, a sign of cautious optimism even if Enria, always a master of prudence, has nonetheless invited banks to recognize without delay any deterioration in the quality of assets.
The message, coming as the banking sector is about to celebrate seventh consecutive week of increases, sounds like a blessing for the choices of Unicredit and Intesa which have already announced their intention to proceed with further remuneration of their shareholders after September in the event that there is no extension of the recommendation by the regulator but also to accelerate the risk just as the spotlights are on Banco Bpm, a great suspect for an integration with Bper. The Piazza Meda stock travels up +39% since the beginning of the year, much better than the Eurostoxx Banks and the Italian banking index +22%. Thanks to the wind blowing from central banks.
