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The largest financial supervisor in the Bank of England said that he was monitoring the impact on lenders of Donald Trump's radical prices, a planned economic slowdown probably leading to higher provisions for payment defects.
Sam Woods, Director General of the Prudential Regulation Authority of the BOE, said that the regulator had intensified the supervision of banks during the volatility of the market launched by the “Liberation Day” of the President priceWithout going to the “highest level” to require daily liquidity reports of lenders.
“We look at him (the effect of prices) very closely”, Woods said Tuesday, the selective committee of the treasure of the House of Commons. “What we are monitoring then is also what will be the macro impact of all this.”
“I think it will be interesting to see if our banks during the next period choose to provide more for a different economic environment, because they are now making prospective arrangements,” said Woods, who is also the vice-government of the BOE. “So that's where we are concentrating at the moment.”
HSBC Tuesday took A blow of $ 150 million to reflect increased economic uncertainty, as part of the overall costs of $ 876 million for the bad loans that the bank recorded in the first quarter of this year, slightly higher than the analysts' forecasts.
IMF last week Reduce British growth forecasts From 1.6% to 1.1% for this year, as it warned against the general economic disturbances of an increase in trade-oriented trade barriers worldwide.
The actions of certain British banks fell up to 20% in response to Trump's pricing announcements, and Woods said it was “unusual for us to have so much value that eliminated the value of our banks”.
But he added that these stock prices had mainly recovered since Trump delayed the prices and that the Pra had seen few signs of the sale making investors or consumers lose confidence in lenders.
“What we really monitor is the risk of contagion in funding,” he said. “This is what is really important to us and we have not really seen any sign of that.”
Trump's pricing announcements “created a fairly large part in the way the United States is seen by regulators and investors,” Waods, who was in Washington last week for IMF and World Bank, said.
He underlined a “completely worrying” sell In the US dollar and in the US government bonds which followed Trump's pricing announcement, as well as a drop in stock prices.
“Normally, we see the opposite in these types of risk conditions,” said Woods. “Normally, we see a flight in these assets.”
He added: “We ask ourselves the question: what would happen if there was a more fundamental decrease in appetite for the assets denominated in dollars, or American assets, or treasure goods, or a version of this?”
The PRA chief said he was also concerned that the United States could abandon the agreed banking capital rules with other regulators of the Basel Committee on banking supervision after a speech by the US Treasury SCOTT BESSES on April 9.
Bessente said: “We must not outsource decision-making for the United States to international organizations.” He added that when Basel standards “can draw inspiration”, the United States could “selectively borrow”.
However, Woods said he had since been “very reassured” by figures in the private and American public sectors which “was not the right way to read this speech”.
The United Kingdom has postponed the implementation of the rules of Basel while waiting for the clarity of the American position under Trump.
The EU has delayed part of the Basel rules for the financial market negotiation activities of banks and is expected to postpone them again this year.
Woods said it was “an advantage of Brexit” that the United Kingdom could “move much faster than the EU”.
But he added that the United Kingdom was in “regular dialogue” with the EU on the implementation of reforms and “a by-product” of Trump prices was that the heat of these “increased” relationships “.
