In a report by Moody's Investor Services, the rating agency has downgraded the global asset management industry to negative; factors for the downgrade are focused on active management performance, global regulation and increasing costs; a McKinsey report published last month pointed to the new fiduciary rule, set to be enacted in April 2017, as an industry altering step as advisers will be forced not to consider their self interests with high commissions when servicing their clients; capital has continued to flow from actively managed funds to ETFs with costs being significantly lower. Source
Moody's has released a report commenting on the new FDIC guidelines for bank lending through third-party lenders; guidance from the FDIC is proposed and seeks to potentially improve controls on bank lending through marketplace loans; the new FDIC guidance will help to improve the overall quality of loans on marketplace lending platforms, according to Moody's; the new controls focus on greater analysis and oversight by banks of marketplace lenders' credit underwriting models to ensure that they align with the bank's lending terms. Source
Shadow banking in China increased to 58 trillion yuan which is more than 80% of GDP, according to a report from Moody's; total social financing has now risen to an estimated 220% of GDP; Moody's says light regulation in the nonbank sector is a concern and the new regulations proposed by the government are needed to help manage risk and keep the business from causing major liquidity problems for the broad market. Source
After the financial crisis banks pulled back from lending to anyone they deemed a potential risk; this helped spur many...
Moody's has issued comments on the OCC's announcement to offer a fintech charter; says the fintech charter would help reduce legal risks from partner bank funding; focuses on the effects from the charter on partner bank funding relationships; says banks could stop relying on partner banks to fund loan originations. Source