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Geopolitics will become a top factor influencing investments by central bank reserve managers on a five- to 10-year horizon, though it will play a smaller role in the next two years, according to a survey of 73 central banks by the Official Monetary and Financial Institutions Forum. Less than 5% of reserve managers cite geopolitics as the biggest influence on their investments over the next two years, but 80% selected it among their top three investment considerations over a 5- to 10-year period, higher than any other factor, it says. "Given the conflicts in Ukraine and Gaza, pivotal elections happening globally and tensions between the U.S. and China, it seems hard to imagine that geopolitical risks will escalate, but reserve managers are preparing for worse." ([email protected])
European Central Bank's bank lending survey published on Tuesday showed banks expect to tighten credit standards for corporate and consumer lending, Jefferies analysts say in a note. Banks' risk tolerance was highlighted as the main driver behind a net tightening in standards for corporate lending in the second quarter, whilst cost of funds had a neutral impact on standards, Jefferies says. By country, France and Germany saw the most significant net tightening. The survey also showed credit standards are expected to ease for mortgages. ([email protected])
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