Quantik.org⎟GK@Quantik.org

Issue#61⎟May2020

Monthly

NEWSLETTEROurselectionthismonth:RecentReportHighlightstheDeepSeeMiningDangertoEcosystem ⎟ ECBHighlightsthePositiveChangesinGreece ⎟ TurkishForeignDebtWorriesInvestors ⎟ ECBLaunchesPublicConsultationonClimate-RelatedRisks ⎟ MoreForeignInvestmentsinUzbekBankingWouldImproveCompetitivenessRecentReportHighlightstheDeepSeeMiningDangerto Ecosystem: A new report commissioned byMiningWatch Canada, and the Deep Sea MiningCampaign finds that the impact ofminingdeep seapolymetallicnoduleswouldbeextensive,severe,andlast for generations, causingessentially irreversiblespecies loss. According to Dr. Andrew Chin, LeadResearcher of the report “Not only will the noduleminingresult inthelossofthesespeciesanddamagedeepseabedsforthousandsofyears,itwillpotentiallyresult in negative consequences for the rest of theocean and the people who depend on its health”.Exploration of mineral rich polymetallic nodulesattracted interests of majormining companies andtheir investors, a major Canadian mining companyrecently partnered with three Pacific islandgovernmentsforexplorationlicensesfortheClarionClipperton Zone, stretching 4,500km betweenKiribatiandMexico.

ECBHighlights thePositiveChanges inGreece:TheEuropeanCentralBanksaidinarecentstatementit“very much welcomes the positive economic andfinancialdevelopments”observedinGreecein2019.TheECBsaidtherehadbeenpositivedevelopmentsintheGreekrealeconomyandfinancialmarketsforsometime.RelatedtotheeligibilityofGreekbonds,theECBsaid“AlthoughGreekpublicsectorsecuritieshavesofarnotbeenpurchasedunderthepublicsectorpurchase programme (PSPP), the ECB’saccommodative monetary policy has contributedsubstantiallytoeasingfinancialconditions inGreece,as shown by the low bank lending rates to Greekhouseholdsandnon-financialcorporations”.

Turkish Foreign Debt Worries Investors:International investors are worried that Turkishbankswon’thaveenoughforeigncurrenciestomeetthe demand and would struggle to raise fundsoverseas as the level of debt is becoming a seriousconcern. The funding vulnerability has been raisedover the recentweeks as theTurkish Central BankborrowedEURandUSDfromlocallendersandsoldthemabroadtosustaintheLiraagainsttheUSDollar.This leaves local banks in a precarious positionshould they need USD or EUR to repay loans.According to Mr. Jason Tuvey, Senior EmergingMarketEconomist atCapitalEconomics “If Iwas topickoneareaoftheeconomythatcouldcauseafairlybadeconomicsituationtogetevenworse,itwouldbethebankingsector”.ECB Launches Public Consultation on Climate-Related Risks: ECB recently published a guide forconsultation that explains how it expects banks tosafely and prudently manage climate-relatedenvironmental risks and disclose such riskstransparently under the current prudentialframework. The ECB expects banks to account fortheserisksgiventheydriveexistingprudentialriskcategories and can substantially impact the realeconomyandbanks.AccordingtotheCentralBank,ifthe immediate attention is on the pandemic, itremains committed to further advancing themanagement and disclosure of climate-relatedenvironmentalrisksinthebankingsectors.MoreForeignInvestments inUzbekBankingWouldImprove Competitiveness: According to the UzbekCentral Bank, the share of private banks inUzbekistan is only 15%, the sale of state-ownedbanksto foreignstrategic investorsshould improvecorporategovernanceandriskmanagementsystemsin these banks. According to the Central Bank“Preservationofhighshareofthestateinthebankingsystem of Uzbekistan has a negative impact on theoveralldevelopmentofthesphereanditsefficiency.Atthesametime,theincreaseinnumberofprivatebankscontributes to improving competitive environment inthesphere”.TheGovernment isplanningthesaleofstakesofmajorbanksintheforthcomingmonths.