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Brushstrokes and Balance Sheets: How AI Is Repainting Art and Banking

Written by IntaCapital Swiss on September 3, 2025. Posted in News & Reports. Leave a Comment

From the Renaissance studio to the modern trading floor, two seemingly distant worlds—art and banking—have always been connected by one invisible thread: the search for value. Whether it’s a painter layering pigments to capture light or a banker layering risk models to capture returns, both are engaged in acts of creation, interpretation, and persuasion.

Now, artificial intelligence (AI) has arrived like a disruptive patron, commissioning both artists and bankers to work in new ways. The same algorithms that can conjure a Rembrandt-style portrait from a text prompt can also forecast market movements or detect financial fraud. And the parallels go far deeper than the surface.

The Canvas and the Ledger: Shared Foundations

An artist approaches a blank canvas much as a banker approaches an empty ledger: with a vision.

In art, the blank space is filled with form, colour, and emotion.
In banking, the empty page becomes a structured composition of numbers, risk assessments, and projected returns.

Both require a deep understanding of patterns. Where the painter sees symmetry, contrast, and movement, the banker sees cashflows, volatility curves, and correlations. AI’s great leap is its ability to read these patterns at a scale and speed that neither the artist’s eye nor the banker’s intuition could match.

Pigments and Portfolios: Building Value from Components

In the studio, a painting is built layer by layer—each pigment, glaze, and stroke contributing to the final image. In banking, portfolios are assembled asset by asset—each bond, share, or commodity adding to the whole.

AI is transforming both processes:

In art, generative models mix visual “pigments” from vast training datasets, producing new images in seconds.
In banking, AI blends financial “pigments” from global data streams, assembling portfolios that respond dynamically to changing conditions.

In both cases, the craft lies not in laying down every layer by hand, but in directing the composition—knowing which elements to combine and in what proportion.

The Curator and the Risk Manager: Gatekeepers of Quality

Art galleries rely on curators to select, frame, and present works in a way that resonates. Banks rely on risk managers to select, structure, and present investment opportunities that align with a client’s goals.

AI can assist both roles:

The AI curator can scan millions of artworks to find emerging styles or undervalued pieces.

The AI risk manager can analyse decades of market data to spot anomalies and opportunities before they’re visible to humans.

But in both worlds, the danger is the same: without a human curator or risk manager applying judgment, AI may promote works (or investments) that look promising in the data but lack lasting value.

Forgery and Fraud: The Dark Arts of Both Worlds

In art, forgery undermines trust in the market. In banking, fraud does the same. Both rely on deception—passing off something false as genuine.

AI is a double-edged sword here:

It can create near-perfect forgeries of artistic styles, challenging the notion of authenticity.
It can also produce synthetic financial documents or deepfake identities to bypass security.

Yet the same technology can also protect both industries. AI can detect subtle inconsistencies in brushwork that reveal an art forgery, just as it can detect unusual transaction patterns that signal financial fraud.

Auctions and IPOs: Moments of Market Truth

An art auction is a public performance of value discovery. Bidders raise paddles in response to the perceived worth of a work. An initial public offering (IPO) plays out similarly—investors subscribe to shares at a price determined by demand and expectation.

AI’s role in both is growing:

In the auction world, algorithms predict hammer prices based on past sales, artist trajectory, and collector sentiment.
In the IPO world, AI models assess market appetite, optimal pricing, and timing.

In both cases, AI becomes the backstage analyst, advising on how to position an asset—whether that asset is a painting or a stock.

Commissions and Structured Products: Tailored Creations

Wealthy patrons once commissioned paintings to match their tastes and ambitions. Today’s high-net-worth individuals commission financial products—structured notes, bespoke funds, or AMCs—designed to fit their risk appetite.

AI accelerates customisation in both:

In art, an AI model can adapt its style instantly to a patron’s preference—more chiaroscuro here, a hint of Cubism there.
In banking, AI can assemble a product mix tailored to the client’s income goals, tax situation, and ethical preferences.

The patron’s role is the same: to articulate intent clearly enough for the creator—human or AI—to deliver the desired outcome.

Restoration and Portfolio Rebalancing: Preserving Value Over Time

Art restoration keeps old masterpieces vibrant, repairing damage while respecting the original vision. In finance, portfolio rebalancing preserves the health of an investment over time, correcting drift while respecting the original strategy.

AI is bringing precision to both:

In restoration, AI can analyse old pigments to match colours exactly or reconstruct missing details based on historical records.
In finance, AI can detect micro-shifts in asset performance and rebalance automatically to maintain alignment with objectives.

Both aim to maintain integrity—ensuring that what was once valuable remains so in the present.

Emotional Impact vs. Financial Impact

While art seeks to move the heart and finance seeks to move the bottom line, both ultimately trade in trust and perception. A painting’s value is what someone believes it’s worth; a bond’s price is what the market believes it will return. AI changes how both perceptions are formed.

In art, algorithms can simulate the emotional weight of colour, light, and composition, influencing what audiences respond to.
In finance, algorithms simulate the likely outcomes of investments, influencing where capital flows.

The parallel is clear: AI’s predictions become part of the reality they describe, shaping demand in both markets.

The Artist and the Banker: Directors, Not Replacements

One fear looms large: will AI replace the artist and the banker? The more fitting analogy is that AI moves them both from craftspeople to directors.

The AI-assisted artist might spend less time perfecting brushwork and more time conceptualising themes and narratives.
The AI-assisted banker might spend less time crunching numbers and more time interpreting insights and advising clients.

In both cases, the human becomes the storyteller—the one who frames the work, whether that work is a painting that hangs in a gallery or a portfolio that lives in a private bank’s vault.

A Shared AI Renaissance

The Renaissance was not just a rebirth of art; it was also a financial revolution, with the rise of merchant banks funding the projects that defined the era. Today’s AI revolution could be another shared chapter.

Imagine:

AI curates an investment portfolio composed partly of tokenised artworks, valuing them with the same predictive analytics it uses for equities.
Art collectors use AI to generate, authenticate, and value works that are instantly tradable as financial instruments.

The boundaries blur. A masterpiece can be both an aesthetic object and a yield-generating asset. A bond can be both a source of income and a cultural statement, linked to projects that create beauty as well as profit.

Conclusion: Guarding the Frame

Whether you’re painting on canvas or painting numbers onto a balance sheet, the challenge in the AI era is the same: to use the machine’s capabilities without letting it define the work entirely.

Frames matter—in art, they focus the eye; in banking, they define the rules. AI can fill the frame with astonishing skill, but it takes human vision to decide what belongs inside it.

The artist and the banker have more in common than they might think. Both are in the business of shaping perception, guiding value, and leaving a mark that endures. AI is simply the newest brush in their toolkit, capable of making every stroke sharper, faster, and more intricate—provided they still hold the brush.

Will Switzerland Join the United Kingdom’s Dirty Money Task Force?

Written by IntaCapital Swiss on September 3, 2025. Posted in News & Reports. Leave a Comment

At the end of August 2023, Switzerland announced that they would be proposing new rules that would toughen anti-money laundering laws in response to claims by the United States who said that their sanction enforcements were weak. Indeed, the United States went further by saying that Switzerland had not done enough to crack down on the movement of dirty money.

To this end, Switzerland produced a proposal which included a “Federal Register” in which companies, corporations and other legal entities would find it harder for criminals and similar associates to hide assets from investigating authorities, and would have to disclose the names of any beneficial owners. However, much to the annoyance of the United States, the register would not be made public.

Previous to 2023, Switzerland had slowly been moving away from original traditions where bank secrecy was protected which at the time had made it the banking centre for the world’s rich. However, much criticism still emanated from the United States and a number of other countries as it was felt not enough had been done plus the enforcement of sanctions on Russia after the invasion of Ukraine seemed patchy at best.

Furthermore, at that time, Switzerland was also unwilling to join a multilateral task force designed to improve cooperation on seizing sanctioned Russian assets. However, as of Tuesday 19th August, it was announced that Switzerland is considering joining a British-led international task force, the IACC (International Anti-Corruption Coordination Centre), which targets “Kleptocrats*” in order to recover stolen assets.

*Kleptocrats/Kleptocracy – translated means “Rule by Thieves” and it is where corrupt government leaders systematically utilise their political power for criminal gain whereby they steal wealth and resources from their nation. This crime takes place on a massive scale which involves huge corruption that depletes a nation’s budget, hinders public services and economic development, and ultimately undermines democratic governance. Kleptocrats often hide their mass of stolen wealth in other countries which requires a transnational network of financial and legal enablers to obscure ownership and launder money, a problem that host countries together with the international community are continuing to struggle to combat.

Indeed, experts in this arena advise that sources close to officials confirm that Switzerland currently has observer status with IACC and during a visit earlier this month by the British Foreign Secretary David Lammy he discussed the possibility of the country participating further with the IACC and the possibility of becoming a full member. As a result, Switzerland is considering a number of options for future cooperation with the IACC but definite decisions have yet to be reached.

Joining the task force would enable Switzerland to share intelligence and work more closely with countries on investigations that target dirty money. The British Foreign Secretary has advised that Switzerland has been a key partner in the fight against corruption and illicit finance and further participation with the IACC would be invaluable. Since the illegal invasion of Ukraine by Russia on 24th February 2022, Britain has increased its efforts against illicit finance and has become the global leader against kleptocracy.

The Bank of England Cuts Interest Rates

Written by IntaCapital Swiss on August 11, 2025. Posted in News & Reports, Uncategorized. Leave a Comment

On Thursday, 9th August the BOE (Bank of England) cut interest rates by 25 basis points to 4% and in the process, the MPC (Monetary Policy Committee) took borrowing costs to its lowest level since March 2023. However, this was no ordinary MPC meeting as for the first time in its 23-year history the vote was deadlocked and the committee took the unprecedented step of voting twice, with the vote finely split by 5–4 in favour of a rate cut. The decision by the MPC saw two senior voting members (Chief Economist Huw Pill and Deputy Governor Clare Lombardelli) vote against Governor Andrew Bailey, with officials being deeply divided over the direction of interest rates, with the United Kingdom not only experiencing a cooling labour market but a resurgence in inflation.

The last time the MPC cut interest rates was in May of this year and since then the opposition to interest cuts has unexpectedly grown, however as seen above the two dissenting votes for a rate cut helped win the day. The BOE is still sticking with its overall guidance informing the financial markets that rate cutting will be “gradual and careful” whilst warning of a cooling in demand for workers and an emerging slack in the economy. The Governor of the BOE Andrew Bailey reiterated previous comments by saying “it remains important that we do not cut bank rate too quickly, or by too much”. The MPC also pointed out that they expect inflation to hit 4% in September – up from the previously advised figure of 3.7%.

Elsewhere tax data suggests that since the Labour Government announced plans to increase employers’ payroll tax and the minimum wage, 185,000 jobs have been lost. Data from the BOE’s own survey of firms show a growing stagflation risk, and in the upcoming year, they expect businesses to put up their own prices by circa 3.7%. Indeed, the MPC further advised that since May of this year upside risks to the consumer price had moved slightly higher with particular emphasis towards rising food bills, and they went on to say that the outlook for employment growth over the next 12 months has deteriorated and the expectations on wage growth remains at 3.6% which is somewhat sticky and has become a bit of a hot potato.

Governor Bailey at a press conference once again insisted that interest rates are on a downward path and that the current inflation figure will only be temporary, but he was somewhat evasive and wary about when they will announce the next interest rate cut. Money market traders have reduced their bets on a November cut to under 50%, especially as Governor Bailey went on to say, “there is, however, genuine uncertainty now about the course of interest rates”. Experts suggest that the BOE is very worried that inflation may well persist as the current headline figure is way above the benchmark target, and there is the possibility that policymakers are considering ending the easing cycle.

Analysts suggest that there are interesting times ahead at the BOE especially as the world waits and sees the effect of President Trump’s tariffs on world trade and the global economy. Furthermore, Thursday’s interest rate cut was the most divisive under the five-year stewardship of Governor Bailey, plus no Deputy Governor has ever voted against Governor Bailey, that is until Claire Lombardelli’s dissenting vote. Such dissent from the Deputy Governor is highly unusual and highlights the deep fractures within the MPC as to how to tackle the resurgence in the current price pressures. The labour party happily points out that under their government borrowing costs have been coming down, but those rates dictated by the financial markets have been going in the opposite direction with the 30-year gilt yield prior to the BOE’s interest rate cut standing at 5.43%. After the BOE’s announcement last Thursday the 30-year gilt yield stood at 5.32%. Some commentators have made a somewhat damning point in that perhaps within the Bank of England there are those who are perhaps politically motivated and not so independent as we are led to believe.

Some experts suggest that the MPC in lowering the borrowing rate is in direct conflict with their prediction of inflation increasing and this despite the fact the United Kingdom has the highest inflation rate within the G7. Furthermore, analysts point out that since April, the pound has dropped 1.5% and 2.5% against the US Dollar and the Euro respectively leaving the pound open to further falls whilst pushing inflation up through higher import prices.

The current disagreements will also impact policymakers and their decisions as to how to tackle the current uplift in inflation and with the Governor and Deputy Governor seemingly split on monetary policy, Governor Bailey’s vote will become more and more important as the United Kingdom approaches the end of the year.

Major Banks Have Ditched the Net Zero Banking Alliance

Written by IntaCapital Swiss on July 16, 2025. Posted in News & Reports. Leave a Comment

The NZBA (Net Zero Banking Alliance) was convened in April 2021 by the UN (United Nations) Environment Programme finance initiative and led by banks whose mission statement was to support efforts to align lending, investment, and capital market activities with achieving net-zero greenhouse gas emissions by 2050. Founding luminaries of the banking world were Citigroup, Bank of America, HSBC Group, and NatWest Group and 39 other leading global financial institutions.

However, the NZBA is under pressure, as back in January this year a number of U.S. banks left the group and most recently HSBC Group has followed suit. The general feeling is that the American banks resigned from the NZBA* as they were under pressure from the then President Elect Donald Trump as he was pushing for higher production of oil and gas thus spurring a backlash against the Net Zero climate bodies. A number of pro net-zero activists have accused the banks of pandering to the political pendulum, and their current efforts are to avoid criticism from the then in-coming Trump administration.

*American Banks No Longer with the NZBA – Citigroup, Bank of America, Morgan Stanley, Wells Fargo, Goldman Sachs, and JP Morgan all resigned before 1st December 2024.

Earlier this month, HSBC was the first British Bank to leave the NZBA, with the move perhaps a potential trigger for other British banks to follow suit. At the launch of the NZBA, the then CEO of HSBC Group Noel Quinn said it was “Vital to establish a robust and transparent framework for monitoring progress towards net-zero carbon emissions. We want to set that standard for the banking industry. Industry – wide collaboration is essential in achieving that goal”. Interestingly, HSBC’s new CEO, George Elhedery, confirmed back in late October 2024 that their Chief Sustainability officer Celine Herweijer had been removed from the bank’s top internal decision-making process, the “executive committee”. She subsequently resigned from HSBC shortly after being dropped from the executive committee.

Some experts have voiced little surprise that HSBC has resigned from the NZBA, citing not only have the top 6 US banks resigned but removing Celine Herweijer from her post on the executive committee may suggest that HSBC was taking a different path regarding climate control. CEO George Elhedery was quick to point out it was all part of a restructuring process and reaffirmed HSBC’s commitment to supporting net-zero. In January 2024, HSBC unveiled its first “net-zero transition plan” detailing its strategies to achieve its climate targets by 2050 (downgraded from 2030) plus its investment decisions it aims to undertake to facilitate decarbonisation across various sectors of finance. A number of senior voices in the net-zero world took issue with HSBC accusing the bank of profits at any cost.

Following their net-zero transition plan, the new Chief Sustainability Officer (not on the new Operating Committee) Julian Wentzel said back in February of this year that the bank would take a “more measured approach” to lending to the fossil fuel industry, giving way to concerns to the net-zero world that the bank would row back on its promises.

On HSBC’s website, it is written that targets for cutting emissions linked to their loan book “would continue to be informed by the latest scientific evidence and credible industry-specific pathways, which again bank detractors say is bank-speak for rowing back on its promises. Meanwhile in America, Republican politicians have instructed some banks to testify before the relevant policymakers who have accused them of unfairly penalising fossil fuel producers with their memberships of the NZBA and other similar groups. Experts point to the obvious political pressure put on banks to leave these organisations.

Elsewhere in the net-zero world and almost a decade on from the Paris Climate Agreement (under Trump the USA has withdrawn for the second time) the world’s largest companies who despite on-going promises and climate manifestos are still struggling to meet net-zero goals. A study produced by a well-known body suggests that only 16% of companies are actually on target to meet their 2050 net-zero goals and a well-respected senior voice in the climate control industry has said “to reach 2050 net-zero goals all of us need to move faster, together, to reinvent sustainable value chains using deep collaboration and transformative technologies”.

According to recently released data, global financing of fossil fuel companies has increased in 2024 (an increase of USD 162 Billion to USD 869 Billion) for the first time since 2021 with banks who have left the NZBA among the biggest funders. So where does this leave the NZBA in its efforts to get banks to increase financing for green projects? Obviously, the organisation is sad it has lost the previously mentioned banks but they still today have over 120 members and currently represents about 41% of banking assets.

Whilst some members have increased their fossil fuel financing some have made cuts to their financing with Santander making the largest single reduction in expansion finance (USD 2.2 Billion) and ING came top in terms of overall divestment slashing its annual fossil fuel financing by USD 3.2 Billion compared with their figure for 2023. Experts in the net-zero world say the NZBA is here to stay with many large banks still on the membership roll. Indeed, on April 15th this year in Geneva membership voted overwhelmingly in favour of backing plans to strengthen the support it provides to its members, marking a new phase for the Alliance’s work which is in line with the goals of the Paris Agreement.

Emerging Markets Debt Could Potentially Hit Record Sales in 2025

Written by IntaCapital Swiss on July 9, 2025. Posted in News & Reports. Leave a Comment

Experts in emerging market debt advise that global issuance volumes in this sector year-on-year were up 20% for Q1 and Q2 for 2025, with issuances growing particularly quickly from the corporate sector. The boom in debt sales have defied missile attacks, an oil market with gyrating prices, and US policy, and tariffs putting a strain on global trade, resulting in a major increase in demand for local bonds who are having their best Q1 and Q2 in 18 years. White House policy has seen the greenback fall circa 11% this year, which has led to a fall in investor confidence resulting in an index of emerging market local debt to return in excess of 12% in the first half of 2025.

Regarding the fall in the value of the US Dollar, experts suggest that this has sent fund managers, asset managers, and the rest of the money managers to look elsewhere for better returns, and as a result, the markets have seen a surge in demand for fixed-income assets in emerging market currencies. Data released shows that hard currency bonds are only up 5.4% in the first half of this year as opposed to 12% as mentioned above in the emerging market arena, all this against the backdrop of the US Dollar having its worst performance since 1970 and falling against 19 of 23 of the most traded emerging market currencies.

Figures released by EFPR data (formerly known as Emerging Portfolio Fund Research) show circa USDD 21 Billion (an unprecedented amount) flowing into EM-debt funds, with some Latin American bonds returning some considerable gains. For example, some Brazilian government bonds have returned in excess of 29% whilst local bonds from Mexico (known as Mbonos) have generated a gain of 22%. Elsewhere, experts suggest that Ghana (Africa’s top gold producer) will, due to short-term borrowing costs falling to their lowest level in three years, resume domestic bond sales later this year.

The following is a part overview of data released regarding the total return year-to-date on emerging market bonds, Brazil Notas de Tesouro Nacional Serie F – 20.2%, Brazil Letras do Tesouro Nacional – 26.0%, Mexican Bonos – 21.7%, Poland Bonds – 19.9%, Hungary Bonds – 19.1%, Czech Republic Bonds 17.8%, Mexican Cetes – 17.4%, Nigeria Bonds – 15.8%, Egypt Bonds 15.0%, Romania Bonds – 14.9%, Taiwan Bonds – 13.8%, South African Bonds – 13.2% and Colombian TES – 12.8%.

Since the beginning of the year, data released shows emerging markets companies and governments having sold USD 331 Billion in debt in hard currencies such as the greenback and the Euro. However, not all future roads to emerging markets fixed income products are paved with gold, as tariff increases may yet put a dent in some country’s ability to issue new bonds. Donald Trump will be reviving tariff targets in the second week of this month, indeed, yesterday the White house announced that letters had been sent to 14 countries informing them new tariffs will be enforced on 1st August this year. The president also has stressed that he will put an additional 10% tariff on any country aligning themselves with “the Anti-American policies of BRICS*”, confirming “There will be no exceptions to this policy”.

*BRICS – Is an intergovernmental agency and is an acronym for Brazil, Russia, India, China, (all joined 2009) followed by South Africa in 2010 as the original participants. Today, membership has grown to include Iran, Egypt, Ethiopia, and the United Arab Emirates and Saudi Arabia, with Thailand, and Malaysia on the cusp of joining. Russia sees BRICS as continuing its fight against western sanctions and China through BRICS is increasing its influence throughout Africa and wants to be the voice of the “Global South”. A number of commentators feel as the years progress, BRICS will become an economic and geopolitical powerhouse and will represent a direct threat to the G7 group of nations. Currently this group represents 44% of the world’s crude oil production and the combined economies are worth in excess of USD28.5 Trillion equivalent to 28% of the global economy.

It is believed by experts that the capture of the “Global South” encompasses all of Africa and South America, and BRICS seemed determined to have their own currency and move away from the US Dollar. President Trump views this as a direct threat to the USA and western Europe and will probably follow through on his threats to BRIC aligned countries. However, as President Trump alienates many of America’s traditional allies, BRICS are positioning themselves to replace the United States in the ground that Trump has ceded. The second half of 2025 will be interesting and over the next few months the markets will see if the increase in fixed-income volumes from emerging markets runs out of steam or goes on to new record highs.

Indian Regulators Come Down Hard on India’s Options Market

Written by IntaCapital Swiss on July 9, 2025. Posted in News & Reports. Leave a Comment

Over the last five years, India’s equity derivatives* market has become the largest in the world, with a daily turnover (including options**) of circa USD 3 Trillion. India’s SEBI (the Securities and Exchange Board of India) has recently become concerned regarding this area of the market, where it feels that certain large participants have been allegedly using manipulative practices through the use of sophisticated technology, thereby gaining illegal profits and thus affecting the market’s integrity.

*Equity Derivatives – A derivative is a contract (e.g. futures, forwards, swaps and options) whose value is derived from the performance of an underlying asset for example, bonds, commodities, currencies interest rates, or in this case equities or stocks and shares. An equity derivative is a financial instrument which derives its value from the performance of the underlying stocks or shares and allows investors to gain exposure to the equity market without owning the underlying shares, and are widely used for hedging, speculation, and investment purposes.

**Options – A financial option is a contract that gives the owner or the holder the right but not the obligation, to buy or sell an underlying asset, (in this case equities, stocks) set at a specific price, (the strike price) on or before a certain date (expiration date). Options are a type of derivative meaning their value is derived from the underlying asset.

The SEBI are currently investigating an American company Jane Street Group over alleged irregularities manipulation of trades in the above market, but according to officials, (who wish to remain anonymous) the investigation will expand to cover wider markets. The markets being investigated are the Mumbai based NSE, (National Stock Exchange of India Ltd.’s) flagship gauge, the Nifty 50*, and BSE (Bombay Stock Exchange) Ltd.’s benchmark Sensex**. The SEBI flagged manipulated and fraudulent trades that mainly took place in the Nifty 50’s weekly options contracts and its underlying constituents in the cash market.

*Nifty 50 – This is India’s leading stock market index and represents the performance of the 50 largest and most liquid companies listed on the NSE. It serves as a benchmark for the Indian equity market and is used by investors and analysts to gauge market trends and the overall health of the Indian economy.

**BSE Sensex – Sensex stands for Stock Exchange Sensitive Index and is one of the oldest indices of India and consists of 30 stocks which are listed on the BSE and represent some of the largest corporations which are also the most actively traded stocks. The BSE is allowed to revise the listing periodically and this usually takes place twice a year in June And December. Sensex is crucial to investors as it gauges market movements and aids understanding in the overall sentiment of the economy and industry-specific developments.

Last week, on Friday, July 4th, 2025, the SEBI through an interim order announced they would be seizing Rupees 48,4 Billion (USD 570 Million) from Jane Street in what they said was unlawful gains made by the company. In consequence, and after an in-depth investigation, the SEBI has barred four Jane Street entities from accessing its securities markets including the confiscation of the aforementioned rupees. Furthermore, the SEBI have accused Jane Street of adopting an “Intraday Index Manipulation Strategy” whereby in early day trading the company aggressively bought constituent stocks and futures thereby pushing up the index, followed by aggressive selling later in the day where the trades were reversed.

The SEBI concluded that the trading actions employed by Jane Street lacked any economic rationale and were designed specifically to artificially move index levels to benefit their trading positions whilst at the same mislead other market participants. Headquartered in New York, Jane Street Capital employs more than 2,600 people in six offices in New York, London, Hong Kong, Singapore, Amsterdam, and Chicago and trades a broad range of asset classes on more than 200 venues in 45 countries. The company totally refutes the allegations.

Is the US Dollar Under Threat Due to the Policies of Donald Trump?

Written by IntaCapital Swiss on July 2, 2025. Posted in News & Reports. Leave a Comment

Donald Trump was inaugurated on Monday 20th January 2025, and since his elevation to the White House, the greenback has lost over 10% of its value against the Swiss Franc, Sterling, and the Euro. Global investors have been turning away from President Trump’s policies, and there is no better measuring stick for their renunciation of his policies than the US dollar. The last time the US Dollar fell so badly was post the Global Financial Crisis 2007 – 2009, when in 2010 the Federal Reserve in order to prop up the economy was excessively printing money.

However, this time around there is no global financial crisis; it is the policies coming from the White House such as expanded global tariffs, the on-going fight between President Trump and the Chairman of the Federal Reserve to push interest rates down, where Chairman Jerome Powell* refuses to budge. Furthermore, there are two further policies which are scaring investors such as the open legal warfare against those who stand up against his policies, and “the big beautiful bill” which has just passed the Senate 51-50, which many experts feel will add to an already massive deficit. These are just a few of the pillars that make up the current administration’s policy and according to the value of the US Dollar are driving global investors away.

*Jerome Powell and Tariffs – On Tuesday of this week, The Chairman of the Federal Reserve Jerome Powell noted that the FOMC (Federal Open Market Committee) would probably have reduced interest rates further without the White House’s policy of expanding global tariffs. He went on to say, “In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. We think the prudent thing to do is to wait and learn more and see what the effect might be”.

Experts suggest that tariffs will put upward pressure on inflation and certainly slow economic growth, and the President continuing to flip-flop on the specifics of levies and halting progress on trade agreements has given much worry and uncertainty on the outlook of the US economy. However, having said that, recently released economic data shows that tariffs have yet to impact prices or the labour market with further data showing that job openings rose in May, the highest level since November 2024.

Interestingly, many market experts, traders, economists, and analysts suggest that Donald Trump and his colleagues are ambivalent to the fall in the US Dollar. When questioned as to whether they support a strong dollar, the answer is always inevitably “yes” but little seems to be done in halting the current decline. Analysts suggest the financial markets feel that the White House is happy to see the US Dollar slide downwards in order to boost manufacturing in the United States.

Such speculation has led some observers to suggest that the President is playing with fire as the cost of financing the government has exploded to over USD 4 Trillion as the budget deficit continues on its path like a runaway train. Financing mainly comes from overseas

investors, and when it comes time sell up and bring their money home, a sliding greenback means they lose money. This, some observers feel, could lead to a vicious cycle where global investors continue to pull their funds out of the USA driving up borrowing costs resulting in further declines in the US Dollar with further economic uncertainty and so on and so on. If overseas investors get a whiff that a declining greenback is government policy the results could be catastrophic for the US Dollar.

As the world’s reserve currency, the US Dollar is already on the decline because at the close of business 2014 data showed the greenback accounted for 65% of global foreign exchange reserves and as at close of business 2024 this figure stood at 58%. However, that said, swift data shows that as recently as August last year the US Dollar is used in 49.10% of global payments and as at December 2024 data shows that 54% of global traded invoices are transacted in US Dollar and 88% of foreign exchange transactions are done in USD Dollars.

Analysts agree that in the near future, the US Dollar will undoubtedly keep its status as the world’s reserve currency. However, if the US Dollar continues to slide it will come under severe pressure from foreign investors, and there are already mutterings coming out of the ECB (European Central Bank) that the Euro could, in a few years’ time, be in a position to take over the mantle of the world’s reserve currency. The US has amassed a debt pile of USD 29 Trillion (100% of GDP) and it’s not stopping, it has lost its last remaining AAA rating and the budget deficit over the past few years has increased to 6% of GDP. President Trump without a doubt will have some short-term problems coming his way, but will things have turned around by the end of his presidency, and what will his legacy be?

Is the Russian Banking System Close to a Systemic Crisis?

Written by IntaCapital Swiss on July 1, 2025. Posted in News & Reports. Leave a Comment

Experts in the Russian banking arena, plus a number of Russian banking officials themselves, have advised that the banking system in Russia is close to a systemic* crisis. A number of officials within the Russian banking community have advised that bad debt on Russian banks’ balance sheets is in the trillions of rubles. Although official figures may mask the extent of the problem, an increasing number of retail and corporate clients are either deferring or defaulting on interest and principal loan repayments.

*Systemic Banking Crisis – this occurs when a significant number of banks within a country experience severe financial distress simultaneously, potentially jeopardising the entire financial system.

A timeline for this crisis of around 12 months is currently being bounced around by economists, experts, and Russian banking analysts. A number of officials have cited the alarm felt by banks over the non-payment of loan interest, as well as the non-repayment of loan principals. Many experts feel that the corporate and retail sectors within the Russian economy are struggling with high interest rates, with the key benchmark interest rate currently sitting at 20%. If circumstances fail to improve, a debt crisis may well spread through the whole banking community.

Experts contend that Russia’s two-tier economy is impacting the private sector as businesses have to contend with rising costs, slower demand, and decreasing prices for exports. On the other hand, huge benefits have been realised by massive state spending on Russia’s war machine and military industrial complexes. What is not well documented is the favourable loans that banks granted to help fund the war effort, and experts are hearing that there is more pressure on Russian banks as they seek repayments for these loans.

Headquartered in Moscow, ACRA is Russia’s rating agency which, in May of this year, warned of a “deterioration in the quality of loan debt”. They also went on to report that 20% of the entire Russian banking capital is tied up with borrowers whose creditworthiness is under severe scrutiny and may be downgraded due mainly to high interest rates. Furthermore, the military war machine’s appetite for more labour has severely impacted this market, resulting in massive labour shortages. At the same time, this has boosted the earnings of those in work, causing inflation to a peak at 10%.

At the recent St Petersburg International Economic Forum, the Russian Economy Minister said, “We are on the verge of slipping into recession”. However, in a speech the following day, President Putin said, “Some specialists, experts, point to the risks of stagflation and even recession. This, of course, should not be allowed under any circumstances”. A number of political experts read this statement as Putin essentially saying this has nothing to do with me, it is officials who need to put this right. However, Russia is in the middle of a credit crunch, with data showing that Russian banks’ corporate loan portfolio is set to decrease by Rubles 1.5 Trillion (USD 19 Billion) in Q1 of 2025.

In mitigation of the credit crunch, and for the first time in three years, the Central Bank cut its benchmark interest rate to 20%, with many experts and analysts saying that the rate is still far too high. However, earlier this month the Kremlin-linked CMASF (Centre for Macroeconomic Analysis and Short-Term Forecasting) said there is an increased likelihood of a run on Russian banks. The CMASF also went on to say that the MOEX (Russian Stock Market) is a good indicator of heightened economic uncertainty, and it experienced a sharp drop after new sanctions threats by President Trump and his taunt that Putin is crazy.

On the sanctions front, President Trump has so far held off on his threats as it appears he really does not want to go to war with Putin – especially through the non-military option of sanctions. However, the European Union is already in discussions about further sanctions on the Russian banking sector, which could negatively impact the sustainability of Putin’s war on Ukraine. However, without further sanctions, the current Russian economy definitely has a negative outlook and, with rising inflation, labour shortages, and declining growth, could severely hamper Putin’s ability to sustain the current war with Ukraine. However, if there is a full-blown banking crisis – all bets are off, and who knows what the Kremlin might do to sustain not only the current war, but the status quo with the Russian population.

Swiss National Bank Cuts Interest Rates to Zero

Written by IntaCapital Swiss on June 23, 2025. Posted in News & Reports. Leave a Comment

On Thursday 19th June, the SNB (Swiss National Bank) announced their benchmark interest rate was being cut by 25 basis points to zero and is now standing very close to a negative interest rate for the first time since 2022. However, the SNB has not ruled out moving the interest rate into negative territory and the Chairman, Martin Schlegel, stressed that such a move would be subject to great deliberation. The current decision has confirmed that the interest rate is the lowest against their global counterparts.

Chairman Schlegel in a radio interview said, “We are aware that negative interest rates are a challenge for many of our stakeholders in the economy. Negative rates also have negative side effects for savers, bankers, pension funds, and so on – we are very aware of that. If we were to lower rates into negative territory, then the hurdles would certainly be higher than with a normal rate cut in positive territory. When questioned about a rate cut at the next meeting on Thursday 25th September 2025, Chairman Schlegel sat on the fence stressing that officials will weigh data and forecasts at that time.

The cut in interest rates by a ¼ of 1% is the sixth consecutive cut by the SNB forced on the bank by the current strength of Swiss Franc which has caused consumer prices to drop for the first time in four years. President Schlegel was quoted as saying, “the SNB is attempting to counter lower inflationary pressure” and went on to stress “We will continue to monitor the situation closely and adjust our monetary policy if necessary. The SNB had indicated back in March of this year that monetary easing was probably finished, but the currency’s role as a safe haven from global economic turmoil forced their hand, and they have hinted that more cuts may be necessary to stop inflows of the Swiss Franc.

Once again President Trump and his tariff policy which has disrupted global trade underscores the impact it has had on Switzerland. Dramatic shifts in policy by the current administration in the United States has certainly deeply worried investors with the result the Swiss Franc has risen to its highest level against the US Dollar, whilst in Q1 of this year inflation was driven below zero for the first time since March 2021. Another option to control the Swiss Franc is intervention in the foreign exchange markets, but this brings political pressure as Donal Trump has already accused Switzerland of being currency manipulators, a statement vehemently denied by Chairman Schlegel.

There is disagreement within the financial markets with some experts suggesting that unless the situation drastically changes between now and September that the current decision to cut interest rates to zero paves the way for a further cut in September pushing interest rates into negative territory. However, countering this argument other experts have said that unless higher tariffs cause a significant downturn in the Swiss economy the SNB were likely to hold at 0.00%. Current bets on another rate cut have been factored in by money markets at 57%. However, Switzerland’s two-year bond yield, which is highly rate sensitive, remains in negative territory, is a sign that financial markets still anticipate a September cut.

Bank of England Holds Interest Rate Steady

Written by IntaCapital Swiss on June 23, 2025. Posted in News & Reports. Leave a Comment

On Thursday 19th June the BOE (Bank of England) held benchmark interest rates steady at 4.25% – 4.00% with the MPC (Monetary Policy Committee) voting 6 – 3 leaving rates on course for a potential cut at the next meeting on August 7th, 2025. Two external members Alan Taylor and Swati Dhingra plus the Deputy Governor David Ramsden preferred a quarter point reduction, however experts had already predicted a 6 to 3 vote in favour of holding rates steady. The money markets taking its lead from a more dovish vote by the MPC increased the odds on further interest rate cuts, priced in a further two ¼ of 1% cuts by June 2026. Interestingly, even before today’s announcement the financial markets had already priced in an 80% chance of a ¼% cut in August.

Governor Bailey warned that the world is in a highly unpredictable space with concerns that the current conflict between Iran (a major oil producer) and Israel could affect energy costs by sending them higher, thus negatively impacting prices by driving them higher. The BOE confirmed it is sensitive to events in the Middle East and their impact on oil prices where prices could be driven higher, which could then negatively impact the UK economy. The BOE noted that since their last meeting in May gas prices are up by 11% and oil had risen by 26%, however service inflation* an important indicator for the BOE fell in April from 5.3% to 4.7%

*Service Inflation – is a component of core inflation (excludes energy and food services) and reflects the rate at which the prices of services are increasing or decreasing in an economy. It helps economists, financial experts, and policymakers understand the underlying persistent inflationary pressures in an economy. Energy and food prices are excluded and can be volatile and subject to short-term fluctuations but are included in headline inflation.

Officials from the BOE noted that inflation is expected to edge higher in the coming months peaking at 3.7% in September from 3.4% in April. Experts have noted that the September figure is higher than the BOE’s benchmark target figure of 2%, however officials suggest that this figure will slowly come down with Chairman Andrew Bailey confirming “rates are on a downward path”. Officials also confirmed that they expect the economy to grow by 0.25% in Q2 of this year and statistics released by the ONS (Office for National Statistics) showed food prices had risen by 4.4% in the year to May2025, and overall goods prices rose by 2.0% the most since November 2023.

Analysis issued by the BOE suggest that officials and policymakers are feeling less pessimistic regarding the impact of Donald Trump’s tariffs on the UK and global economy, a change of opinion from their more pessimistic outlook last month. However, they continue to stress whilst their outlook has changed, uncertainty over trade could still negatively impact the UK economy. The MPC whilst still trying to balance a cooling economy against elevated inflation is finding their work is being complicated by the Israel/Iran conflict and the trade policies of President Donald Trump.

Tag: Banking