Latest news with #liquidity
Reuters
a day ago
- Business
- Reuters
China's central bank injects 700 bln yuan of outright reverse repos in May
SHANGHAI, May 30 (Reuters) - China's central bank has injected 700 billion yuan ($97 billion) into its banking system during May through an outright reverse repurchase tool, the bank said on Friday. The operations, conducted with tenors of three and six months, were aimed at maintaining "reasonably ample liquidity" in the banking system, the PBOC said in a statement. With 900 billion yuan in outright repos expiring this month, the data suggests a net withdrawal of 200 billion yuan from the system via the tool. In a separate statement, the PBOC said on Friday that it had refrained from buying or selling Chinese government bonds in open market operations for the fifth consecutive month in May. Market participants are closely watching for signals on when the PBOC will resume purchases of its own government bonds. "Amid rising risks of U.S.-China decoupling, there is growing urgency to resume government bond trading to increase the central bank's holdings of sovereign debt," analysts at Caitong Securities said in a note on Thursday. The analysts expect the PBOC to resume bond buying as early as July or August, amid concerns that a potential end to the tariff truce between China and the United States could weigh on economic sentiment. ($1 = 7.1947 Chinese yuan renminbi)
Bloomberg
2 days ago
- Business
- Bloomberg
Chinese Banks Face Liquidity Test on Deposit Exodus, Maturities
Chinese banks are set for a liquidity test in June as they face record debt maturities and a potential exodus from deposits. The lenders are on the hook to repay a record 4.2 trillion yuan ($583 billion) of negotiable certificates of deposit, which are short-term debt instruments, next month. That comes at a time when regular savings deposits are shrinking as interest rate cuts prompt investors to turn to products with higher returns, with some analysts projecting the withdrawals to reach trillions of yuan.
Reuters
2 days ago
- Business
- Reuters
Brazil to discuss adjustments to credit guarantee fund as reserves fall short of target
BRASILIA, May 29 (Reuters) - Brazil's Credit Guarantee Fund (FGC) should hold accounting reserves equivalent to 1% of eligible deposits but is currently at 0.35%, the fund's head Daniel Lima said on Thursday. Discussions on necessary adjustments will take place in the coming months, Lima stressed. Speaking at an event hosted by payment industry group Abipag, Lima also noted that the FGC's liquidity indicator stands at around 2.3% of eligible deposits, compared to a target range of 2.3% to 2.7%. The FGC is a private nonprofit entity created to manage protection mechanisms for clients of financial institutions in the event of bank resolution. The fund has drawn renewed attention following the high-profile acquisition of lender Banco Master by BRB ( opens new tab, a deal currently being analyzed by the central bank. The transaction has sparked scrutiny as it involves two similarly sized banks, with Master having grown rapidly in recent years through an aggressive funding model based on high-yield debt distributed via investment platforms. Lima noted that addressing potential contagion risks from mid-sized banks requires more timely access to information from each institution. The central bank said earlier this year that it would carry out a scheduled review of the FGC next year as part of its regular four-year cycle on the matter. Debt securities issued by banks are insured by the FGC up to a limit of 250,000 reais ($44,028) per financial institution.
Crypto Insight
3 days ago
- Business
- Crypto Insight
Polygon-backed, high-yield blockchain launches for institutional adoption
The Katana Foundation, a nonprofit focused on decentralized finance (DeFi) development, is launching its private mainnet, aiming to unlock greater crypto asset productivity via deeper liquidity and higher yields for users. The Katana Foundation launched a DeFi-optimized, private blockchain, Katana, on May 28, incubated by GSR Markets and Polygon Labs, with the public mainnet launch set for June. The new blockchain will enable users to earn higher yields and explore DeFi in a 'unique, optimized yield environment' that unlocks latent value through an ecosystem that makes every digital asset 'work harder,' according to an announcement shared with Cointelegraph. 'DeFi users deserve ecosystems that prioritize sustainable liquidity and consistent 'real' yields,' wrote Marc Boiron, the CEO of Polygon Labs and core contributor at Katana, adding: 'Katana's user-centric model turns inefficiencies into advantages, establishing a truly positive-sum environment for builders and participants alike.' Katana aims to solve the crypto industry's liquidity fragmentation issue, which can cause significant price slippage, as one of the main barriers limiting institutional DeFi participation To reduce the value slippage in DeFi, Katana's blockchain concentrates the liquidity from numerous protocols and collects yields on all potential sources to create an ecosystem with deeper liquidity and more predictable lending and borrowing rates. Institutional participation in DeFi is set to triple over the next two years to 75% from 24% of 350 surveyed institutional investors, according to management consulting firm EY-Parthenon. To tackle the growing institutional liquidity needs, Katana's liquidity pool is composed of multiple protocols, including lending protocol Morpho, decentralized exchange (DEX) Sushi and perpetual DEX Vertex, enabling users to trade 'blue-chip assets' without needing crosschain transfers. Katana has also incorporated Conduit's sequences and Chainlink's decentralized oracle network. Katana to compound DeFi yield from 'Ethereum-based opportunities' Katana aims to boost sustainable yield by building a cohesive DeFi ecosystem. For instance, VaultBridge deploys bridged assets into overcollateralized, curated lending strategies on Ethereum via Mopho to earn yield, which is routed back and compounded on Katana. The protocol will reinvest network fees and a portion of application revenue back into its ecosystem. 'This reduces reliance on short-term incentives, generates consistent yield, and as it grows, acts as an increasingly stable backstop during periods of volatility and liquidity shocks,' Polygon Labs' Boiron told Cointelegraph, adding: 'Yield is distributed pro-rata to each chain using VaultBridge protocol based on their share of total deposits into VaultBridge.' 'So if Katana supplies 20% of the total vault deposits, it receives 20% of the yield back,' he added. Katana will subsequently allocate its share of yield to users through boosted DeFi incentives across 'core apps' such as Sushi, Morpho or Vertex. The yield is generated from 'Ethereum-based opportunities and then enhanced through Katana's core applications,' said Boiron. Polygon Labs' CEO previously criticized DeFi protocols for fueling a cycle of 'mercenary capital' by offering sky-high annual percentage yields (APYs) through token emissions. Beyond infrastructure-related limitations, regulatory uncertainty remains another significant barrier to institutional DeFi adoption. Regulatory concerns were the main barrier to entry, flagged by 57% of institutional investors as the main reason for not planning to participate in DeFi activities. Source:
Finextra
3 days ago
- Business
- Finextra
EBAday 2025: Digital euro emerging as a transformative force
At EBAday 2025, two expert panels explored how the digital euro and real-time data can transform finance and beyond — shaping future digital money, guiding PSPs, and helping corporates and SMEs enhance liquidity through automation. 0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Reinventing money In the first panel, panellists discussed how the digital euro is emerging as a transformative force, raising key questions around future requirements and the broader benefits. Speakers Andrea Meier, DZ Bank; Bruno Mellado, BNP Paribas; Daniel McLean, European Central Bank; Nils Beier, Accenture, and Ville Sointu, Nordea Bank, were moderated by Petia Niederländer, Oesterreichische Nationalbank. Niederländer opened by asking Beier, whether European banks are prepared given developments in the past 12 months - such as tariff policies, stablecoins, tokenised deposits, and innovations such as digital wallets and AI. Beier identified three areas of change: digital assets, international payments, and European retail payments, noting that while banks are experimenting, 'what we see as missing is a joint public private vision strategy that lays the foundation for the industry to move on, supported by the public sector.' Following the importance of public private partnerships, Niederländer asked McLean for an update on the digital euro project. McLean outlined two phases: first, investigating the digital euro's purpose and use cases; the second, nearly completed stage, involves preparing the technology, infrastructure, and key players 'so when, and we hope the legislature, will give us a big thumbs up to go ahead with the digital Euro, we'll be ready to implement it now' explained McLean. Sointu commenting on banks' technology readiness for the digital euro, stressed the need for customer-facing solutions, 'if you look at the definition of a bank as an intermediary for digital euro, we have to take care of all customer facing responsibilities, including changes in every customer touch point, not accounting the different form factors being discussed in terms of distribution, including physical cards and all possible digital form factors.' Meier mentioned focusing on delivering solutions for corporate customers now, rather than waiting for international solutions. 'We need to deliver our customer needs now, we are not focusing on deliverables in three or four years. Therefore we see use cases for digital money for our corporate customers, but the use cases now are in delivering money and payment on DLT base.' Mellado added how there is a need to 'make these account ledgers from central banks, from banks, so they speak to each other in a much more efficient and atomic way. That's the key battle we have to fight.' Niederländer then posed a question around the biggest threat to European sovereignty in payments and financial transactions. Meier discussed the importance of international cooperation and the role of the digital euro in fostering private solutions, with Sointu emphasising the role of the digital euro in solving interoperability issues. The conversation then turned to the benefits of the digital euro, and the role of the project in supporting innovation. Meier outlined the ECB's efforts to facilitate innovation through workstreams with market participants, with McLean reiterating the ECB's commitment to facilitating innovation. Mellado mentioned the importance of addressing liquidity costs and the potential for the digital euro to improve international payments, with Beier highlighting the potential for B2B use cases. Concluding the panel, Niederländer emphasised the need for stronger European cooperation between public and private sectors to effectively advance innovation. Liquidity management and real-time payments The following panel, moderated by Joost Bergen, examined how real-time data and automation can enhance liquidity for corporates and SMEs, and what's needed to achieve real-time cashflow and Treasury as a Service. Speakers included: Alexandre Eclapier, J.P. Morgan; Gauthier Jonckheere, BNY; Ritu Sehgal, Natwest; Tarun Kishore Sonwalkar, Infosys Finacle, and Wim Grosemans, BNP Paribas. The moderator, Joost Bergen, opened by asking about the difference between real-time payments and real-time data. Sehgal explained the distinction, emphasising the complexity of the cash cycle, 'it's the whole of the cash cycle that means receiving payments and sending payments in real time. They're at quite different evolution stages, so the adoption level for one over the other depends on where the corporation is in the life cycle.' On the need for reliable and quality data, Grosemans commented 'real time, data on demand, is key but the question is, where does that have to come from? that's where we also see an important task from our customers, to work further on strategies to ensure consolidation.' Eclapier then summarised how real-time data and payments are seen as essential for better liquidity management and investment opportunities, focusing on three main pillars of liquidity management: 'visibility is about the data you can receive in real time. The control is where the payment fits in, how you move money from one account to another, which can happen on a real time basis. Once you have a combination of both, that's when you can optimise, focusing on the investment opportunities, reducing the boring costs.' Jonckheere mentioned the increasing demand for real-time data driven by regulatory requirements and data analytics. 'Real time data is a big focus for clients to enable their underlying corporate proposition, this is starting to translate into the benefits real time payment could bring into certain use cases', explained Jonckheere. The conversation then turned to the need for better data analytics and AI to support real-time decision-making. Sonwalkar noted 'It's still early days in terms of whether it will be a fully automated AI predictive Treasury as a service on Cloud, available for everybody. That's probably something that on the horizon we are all looking forward to as it reduces the total infrastructure cost and automates a lot of things. Today, what we see in the market is more modular, connected, and integrated.' The potential for Treasury as a Service to support better liquidity management and decision-making is acknowledged, with Bergen summarising the key points discussed, emphasising the importance of liquidity in payments.
