Foreign news: Investors borrow for bitcoins, UK banks pass the test, EU banks see risks ahead
The trend towards borrowing funds to rush into a perceived bitcoin price rise is starting to garner attention from Wall Street analysts, reports CNBC. The Google search term "buy bitcoin with credit card" is at around its historic peak, and on the rise. In another surge to the upside Monday, bitcoin rose past US$9,600 in morning trade, a rise of nearly seven per cent in a 24-hour period and 17.5 percent over the past week alone. Bitcoin remains the clear market leader, despite 15 other cryptocurrencies now boasting market valuations above US$1 billion, according to CoinMarketCap. At US$162 billion, bitcoin is more valuable than its next 70 or so competitors combined. For the first time since the Bank of England began stress testing the UK's biggest lenders in 2014, all the banks came through without needing to take remedial action, reports the FT. Barclays and Royal Bank of Scotland were the worst performers. With Brexit looming, the BOE set the most stringent stress tests yet, and found the UK banking system could absorb £50 billion of UK losses and a US$40 billion hit on overseas assets. However, the BOE also found that banks could be underestimating the risks from fintech and open banking on future profit margins, reports finextra. And banks have been asked to put aside an extra £6 billion to guard against macroeconomic risks. The BOE has raised its counter-cyclical buffer by half a percentage point, to one per cent, the FT also reports. The number of European banks expecting an increase in operational risk (largely due to cyber and data security threats) has leapt to 55 per cent, up from 35 per cent in 2015, reports finextra. The tenth EBA report on risks and vulnerabilities in the banking sector showed banks are increasingly concerned about IT failures and outsourcing issues as well.