Today’s need-to-know storiesECB official criticises Germany’s UniCredit bid opposition
ECB vice-president Luis de Guindos has criticised Germany’s opposition to UniCredit’s bid for Commerzbank, warning that political resistance to cross-border banking deals undermines the EU single market and its savings and investments union.
“It’s very difficult for governments to argue that they are in favour of the savings and investments union if they then say ‘Well, no, we are against this specific transaction,’” de Guindos told the FT in an interview.
UniCredit has built a stake of almost 30 per cent in Commerzbank and has launched an all-share takeover bid valuing the German lender at more than €35bn.
German Chancellor Friedrich Merz and Commerzbank’s management have strongly opposed the Italian lender’s approach.
“Yes, we need large banks in Europe for complex financing, for IPOs, for support. Investment hubs worldwide also need large banks. But that doesn’t mean that every kind of takeover is welcome without restriction,” Merz said in a speech in Berlin last week.
“We firmly reject hostile and aggressive approaches,” he added.
US senators to consider long-awaited crypto bill
US senators will this week consider long delayed legislation to create a federal regulatory framework for cryptocurrency, in a move that could resolve a dispute between banks and digital asset groups.
Senate Banking Committee chair Tim Scott has scheduled a May 14 executive session to consider the Digital Asset Market Clarity Act, which aims to define when crypto tokens should be treated as securities, commodities or another category.
The crypto industry says the bill is vital to the future of digital assets in the US, while banks are pressing for tighter curbs on stablecoins.
The Clarity Act faces opposition among many congressional Democrats who argue it is weak on anti-money laundering standards and preventing political conflicts of interest.
The Bill would need support from at least seven Democrats in the full senate to gain approval.
Fed identifies geopolitics and oil shock fears as biggest threats
Geopolitical tensions and an oil price shock triggered by the Iran war are the two biggest perceived risks facing the US financial system, according to the Federal Reserve’s latest financial stability report.
“Respondents widely noted the Iran conflict’s potential to cause prolonged supply disruptions in energy markets as well as the possibility of a prolonged period of higher inflation,” the report said.
Three-quarters of survey respondents cited geopolitical risks as a significant near-term concern, while 70 per cent flagged an oil shock. Half of respondents cited risks linked to AI and private credit markets.
Respondents said AI investment was increasingly being financed with debt, creating leverage in the financial system. They also warned that widespread adoption of the technology could contribute to labour market weakness.
On private credit, the Fed said risks appeared limited and manageable for now, although survey respondents warned that redemptions, worsening sentiment and AI-related disruption could tighten credit conditions and spill over into broader markets.
Chip boom will mean records surpluses for South Korea and Taiwan
South Korea and Taiwan’s AI-driven chip export boom is set to push both economies’ current account surpluses to record highs and increase pressure on their central banks to raise interest rates, according to a Goldman Sachs analyst note.
Economists led by Andrew Tilton expect South Korea to raise rates twice by 25 basis points in the third and fourth quarters, while Taiwan is forecast to deliver two 12.5 basis point increases in the second and fourth quarters.
Goldman said the “AI-driven super surplus” would lift South Korea’s current account surplus above 10 per cent of GDP in 2026 and Taiwan’s to more than 20 per cent.
“This AI boom is the strongest tech cycle on record for South Korea and Taiwan,” the economists said. They added that even higher oil prices would have little effect because chip exports would outweigh energy import costs.
Goldman expects South Korea’s AI-related exports to treble to almost 30 per cent of GDP this year, while Taiwan’s could rise further to exceed 30 per cent.