Weekly Global News Wrap: European banks' loan blues; US urge banks to aide COVID-hit customers

And some US lenders hand out bonuses to staff amidst the pandemic.

From Reuters

Battling its worst crisis since World War II, Europe is depending on its banks to funnel a wall of money to businesses as countries place lockdowns to combat the spread of the virus, hampering supply chains and decimating revenues.

Even with government guarantees, lenders will still have to assume some risk of default which, on top of negative interest rates, will eat into already thin profit margins.

The range of challenges poses a threat to Europe’s banks, whose share prices have already plumbed record lows, the companies they serve, and the broader European economy.

From CNBC

The US Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have all urged banks to work with their customers hit by the coronavirus.

In a joint statement, they said that they “will not criticise institutions for working with borrowers.”

They added they will not direct supervised institutions to categorize loan modifications as “troubled debt restructurings.”

From Reuters 

Some US banks have offered their employees one-time bonuses to help ease the financial burden caused by the coronavirus and as a reward for weathering through the crisis.

Citigroup, US Bank, JPMorgan, and Bank of America have already granted their respective staff such compensations.

Banks have largely been excluded from government-mandated shutdowns across the country because they are considered an essential industry by the federal government, meaning most bank branches, call centers, and trading floors have stayed open even as many firms send their employees home.

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