EBF and its Members Call for Balances Reforms to Boost Competitiveness and Investor Participation in EU Capital Markets
Brussels, 9 September 2024 – The European Banking Federation and its members are fully engaged in supporting the completion of a European Savings and Investments Union as called by Enrico Letta in his report published in April 2024. Developing EU capital markets will contribute not only to ensuring that the digital transformation and green transition of our economies are properly funded, but will secure the bedrock upon which EU competitiveness can be relaunched.
Currently, EU capital markets are losing competitiveness, as recently highlighted, among others, by the President of the Eurogroup, Pascal Donohoe and President of the European Commission, Ursula von der Leyen, who recalls in the EC Strategic Agenda 2024-2029 that the fragmentation of our financial markets sees ‘’EUR 300 billion of European families’ savings transferred to foreign markets every year”. Game-changing and ambitious reforms are therefore key. In this context, we fully support the aim of the European Commission to improve retail investors’ access and participation to capital markets through the Retail Investment Strategy (RIS) to ensure that more households benefit from the prosperity generated by EU companies and SMEs.
President von der Leyen also highlighted in the new EC Agenda the need to reduce red tape and administrative burden in order to improve EU competitiveness: “Each Commissioner will be tasked with focusing on reducing administrative burdens and simplifying implementation: less red tape and reporting, more trust, better enforcement, faster permitting.”
Against this background, we are concerned that the RIS, as proposed and currently negotiated, is bound to stay the opposite course, significantly increasing complexity, costs and administrative burden not just for firms, but -most importantly- for their clients, whose customer journey is heavily complexified.
The multiplication of checks, tests, overload of information and warnings ( i.e., proposals regarding the new inducement test, new best interest test and related clauses on the “unnecessary additional features”, as well as additional disclosure of costs and charges) will disincentivize savers from investing in financial markets and will lead them to prefer easily accessible unregulated products, such as crypto assets, a trend already seen occurring with new investors.
We believe that an effective investor protection should not lead to the superimposition of excessive requirements, but rather strike the right balance between clarity, flexibility, effectiveness, variety and freedom of choice. A key element of this is, in our opinion, the reinforcement of product governance via an adequate, workable Value For Money (“VFM”) framework. Provided that the rules are drafted in a calibrated way that allows for flexibility for investment firms, VFM could be an effective tool for managing potential conflicts and ensuring product-specific scrutiny of delivered value against the considerations of a full range of qualitative and quantitative features, costs and investment targets. Among the 3 proposals, the text proposed by the European Parliament seems to be the less prejudicial basis for this approach. However, some improvements still need to be made in upcoming interinstitutional dialogue, as the proposal in many ways remains unclear, is too complex, and risks leading to price regulation and impaired competitiveness.
This text is an opportunity to demonstrate the EU can rise to the challenge of competitiveness, reducing the number and superimposition of over-protection and anti-competitive rules, and at the same time reinforce a few well-targeted measures to strengthen and develop a domestic market of European players and investors, who are the key for financing the digital and green transitions.
The EBF continues to work in this direction with its members, drawing on their experience to identify and client-oriented solutions that may foster safe and informed access to capital markets.
For more information:
Jacopo Borgognone, Senior Policy Adviser – Financing Growth, j.borgognone@ebf.eu
Gabriel Daia, Head of Communications & Public Affairs, g.daia@ebf.eu
About the European Banking Federation:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.x
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]]>FROM THE EUROPEAN BANKING FEDERATION:
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BOOSTING EUROPE
EBF recommendations for the 2019-2024 legislative policy cycle and beyond
BRUSSELS, May 2019 – To provide ideas and recommendations to policymakers, regulators and experts on the role of banks in the European Union for the next five years and beyond the European Banking Federation has published a manifesto that outlines the main regulatory priorities for the banking sector in the context of the upcoming 2019-2024 legislative policy cycle.
Click to download BOOSTING EUROPE as pdf.
As the voice of European Banks, the EBF and its members remain fully committed to supporting a more competitive and cohesive EU in the context of Europe’s great diversity. We believe that without a united and coordinated Europe, the most likely outcome would be more fragmentation, more protectionism and therefore underperforming economies to the detriment of citizens. The EBF is committed to help in supporting European economies so that European businesses and citizens are better served by banks. We have set out in this document the sector’s recommendations to address the key challenges Europe is currently facing.
Key recommendations:
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Banks as responsible partners to businesses and consumers
- Connect environmental, societal and financial goals
- Find new drivers to increase sustainable investments
- Financial literacy should be promoted as we believe it is an essential factor of the EU economic success
- Put more efforts in the fight against Financial Crime
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Build a true Digital Single Market
- EU’s competitiveness and consumer protection in the digital economy should be an EU’s top priority
- Adopt a holistic approach towards an EU data economy: data access and data sharing should be considered in a broader context than financial services
- Conduct a digital “fitness check” to grasp consumers’ and market participants’ expectations more thoroughly and guarantee that the legislation is fit for purpose in the digital era
- Banks should be seen as an indispensable partner for the completion of a truly Digital Single Market
- Deepen and upgrade cyber-security standards in the EU
- Enhance actions to address the social impact of digitalisation
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Enable banks to better serve the EU’s economy
- An appropriate transposition of Basel4 rules to avoid disproportionate increases in capital requirements for European banks is mandatory
- Remove the remaining obstacles on capital and liquidity circulation and reset the Capital Markets Union
- Maintain a diversified banking landscape
- Ensure a proper balance in taxation and tax compliance
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Achieve a stable and efficient regulatory framework
- Conduct a thorough analysis of the existing EU regulatory framework
- Complement this analysis with an in-depth examination of level playing field issues with non-bank competitors
- Address inefficiencies, overlaps and level playing field issues before proposing new regulations
To read the full document click on the link below or on the image above.
For more information:
Olivier Thomas, Public Affairs Representative
o.thomas@ebf.eu
+32 2 508 3712
Media contact:
Raymond Frenken, Head of Communications
r.frenken@ebf.eu
+32 2 508 3732
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]]>EBF BOARD COMMUNIQUÉ
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Banks stand by their customers in the second wave of Covid-19
- Unprecedented action from banks and authorities to help mitigate the economic impact of the Covid-19
- Further measures to be considered to free up additional lending capacity
- New capital regulation to be delayed or amended until pandemic situation has stabilised
BRUSSELS, 20 November 2020 – European banks stand ready to keep up their support for businesses and households amid growing uncertainty around the speed and strength of the recovery.
While it is too early to assess the full impact of the second ongoing wave of Covid-19 on the economy, it is clear that extraordinary support will still be needed in the next months to help the European economy to regain its full strength. Board members of the European Banking Federation (EBF), bringing together national banking associations from 32 countries, met on Friday by video conference. They reviewed recent actions taken by banks, supervisors and regulators and renewed their commitment to continuing playing a constructive role in the crisis.
Board members welcomed, in particular, the combined measures adopted by the EU institutions, as the Banking package to facilitate banks’ lending to households and businesses in the EU. They would also welcome a quick adoption of the Capital Market Recovery package to make it easier for capital markets to support European businesses to recover from the crisis.
Still, as the health situation is worsening again, the Board urges lawmakers to consider further measures to free additional lending capacity, such as adopting a cap of the Single Resolution Fund target level. The idea of the EU legislators was to have a fund of around 55bn Euro. Due to the dynamic calculation method, the fund has grown up to more than 70bn Euro – an increase which does not correspond with the underlying risks.
Also, new tools to deal with non-performing loans resulting from this crisis without major economic disruptions should be considered, including a review of the NPL backstop regulation, a more pragmatic securitisation framework to stimulate the NPLs secondary market and a consistent framework for Asset Management Companies.
Despite the fact that the post-financial crisis regulatory architecture has greatly increased the resilience of the sector, it appears opportune to proceed with an in-depth review of the current regulatory framework in light of its effect during the pandemic crisis. European lawmakers should first postpone the timetable for implementation of Basel IV until the economic impact of the Covid-19 pandemic is sufficiently clear. Importantly, the transposition of the outstanding parts of the Basel IV agreement into EU law should be done taking European specificities into account and with a view to allow banks to support the recovery of the EU economy.
European banks are part of the solution to this crisis. They are serving their clients and the economy at large. At the same time, banks need to be able to attract capital in the same way as in other parts of the world such as in the US.
“European banks are strong and face the crisis generated by Covid-19 with high capital levels. The sector is making a tremendous effort to encourage recovery while putting in place pre-emptive actions to manage loan loss provisions. The focus must remain on supporting the real economy, ensuring that clients and communities are equally successful in facing these unprecedented challenges. The role of the EBF is key in making sure that the regulatory environment continues to allow banks to remain an important part of the solution.” says Jean Pierre Mustier, President of the EBF”
Furthermore, the EBF Board encouraged ongoing efforts by the European Union and the United Kingdom to reach a free trade agreement as soon as possible. Starting next year, UK Finance will cease to be a full member of the EBF. However, members unanimously and amicably agreed to create a new category of membership in order to allow the UK association to continue to engage in the work of the EBF.
Finally, the EBF Board stressed that as a result of the pandemic, deep structural changes such as digitalisation and the so-called greening of the economy, have been accelerated and need to be properly managed in order to reap the full benefits. In order to manage this transition, Europe will need deep and liquid capital markets as well as a complete Banking Union. European banks encourage regulators to pursue those goals with renewed ambition.
“To create a single banking and capital market, EU rules and regulations must be further harmonised. In particular, in new fields, such as digitalisation or the market for sustainable products, we need to ensure from the outset that we do not end up with a patchwork regime. A completed single market will make European banks stronger and only strong banks guarantee a long-term reliable supply of credit.”, says Christian Ossig, Chairman of the EBF Executive Committee.
Media contact:
EBF Media Centre, press@ebf.eu, +32 2 508 3732
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere. Website: www.ebf.eu
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]]>EBF advisor: Daniel Bouzas
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Publication date: 12 July 2018
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Key points:
The EBF fully supports the proposal of the European Commission to introduce a pan-European label for crowdfunding platforms.
In our reaction to the EU Inception Impact Assessment on a Framework on Crowd and P2P finance, we stated that crowdfunding is, in combination with other financing channels, they offer new channels of access to finance for individuals and small companies facing difficulties to tap the traditional banking channels.
For this, we advocated for a consistent EU wide regulatory framework for consumer protection and to consider whether specific categories of crowdfunding service providers are in fact subject to existing financial regulation.
Our main view is that the long-term aim of the Commission should strive to reach a comprehensive EU framework, reducing existing divergences across Member States and achieve a level playing field in which the same activity is subject to the same regulation.
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]]>FROM THE EUROPEAN BANKING FEDERATION:
EBF salutes the EU Commission’s ambitious CMU Action plan
BRUSSELS, 24 September 2020 – The European Banking Federation today expresses it support for the European Commission action plan on Capital Markets Union (CMU) proposed today, based on the High-Level Forum’s recommendations published in June 2020. The EBF fully agrees with the European Commission in its view that the only way to progress is to move step by step in all areas where barriers to the free movement of capital still exist.
The EBF strongly supports the need for a truly functioning European Capital Markets Union to help people and businesses recover from the dire effects of the Covid-19 pandemic. Efficient capital markets will offer investment opportunities for investors and contribute to funding their long term needs, such as effective retirement plans for workers and households. Liquid capital markets are a prerequisite to ensure high level of funding to corporates, in particular to SMEs.
The EBF has a long-standing commitment towards the CMU objectives and has initiated Markets4Europe, a Europe-wide cross-sector collaborative campaign aimed at promoting the integration and development of the CMU[1].
The EBF notes that the Markets4Europe key recommendations published in October 2019 are recognized in the Action Plan, and that, most importantly, the European Commission is taking an ambitious approach. Focusing on key actions defined in the Markets4Europe campaign, the EBF supports the following actions proposed by the European Commission:
- Scaling up the European securitisation market;
- Harmonising post-trade services;
- Minimum harmonisation of targeted elements of core non-banks corporate insolvency laws;
- Setting up common definitions and common processes relating to withholding tax relief;
- Fostering retail investor participation while improving long-term investment by pensioners;
- Improving access to financial markets for corporates in general and for SMEs in particular;
- Recognize financial knowledge and skills as a priority.
If the content and details of each action remain to be announced, the EBF is committed to help building the strong political support and to seize the momentum which is now needed to achieve the real game-changing reforms, as rightly pointed out by the European Commission.
[1] See Markets4Europe Roadmap published in October 2019
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About the European Banking Federation:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere. Website: www.ebf.eu Twitter: @EBFeu.
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Policy contact:
Pauline Guérin, Senior Policy Advisor, Financing the Economy
European Banking Federation
+32 2 508 37 63
p.guerin@ebf.eu
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Media contact:
Raymond Frenken, Head of Communications
European Banking Federation
+32 2 508 3732
r.frenken@ebf.eu
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Joint Business Position: Export Credits and Covid-19 x
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Publication date: 22 July 2020
EBF joins BIAC (Business at OECD) and ICC (International Chamber of Commerce) in a business position on Covid-19 and Export Credits.
Summary of key policy recommendations
A) General considerations and short-term liquidity support
- Improving access to liquidity
- Evaluating credit impact
- Broadening financial products offering
- Enhancing re-insurance agreements with other ECA’s
- Restructuring the existing loan portfolio
B) Actions specifically related to the OECD Arrangement
- Increasing the current local costs limitation to 50% of the total scope
- Greater flexibility for ECAs in covering the minimum 15% down payment
- Allow market-reflective repayments to better align with the nature of different projects
- Increase the maximum repayment term to 18 years and cease to distinguish between different sectors
- Revise the premiums applied to private borrowers in high-income OECD countries
- Introduce an easy to define, transparent & predictable CIRR to provide a level playing field
- Temporary suspension of country risk category reviews until at least 31 December
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]]>Supporting EU’s vision for a responsible and strong economic recovery
EBF STATEMENT
BRUSSELS, 21 July – With full commitment to mitigating the impact of the Covid-19 pandemic and building a more resilient economy, the European Banking Federation supports the vision of the EU to put into motion a responsible and qualitative economic recovery. The EBF acknowledges the unique milestone reached this morning by EU leadership with a formal agreement of the Multi-Annual Financial Framework (MFF) and the Next Generation EU Recovery Fund (NGEU). With an important role for the financial sector, this deal with enable Europe to take on the multi-faceted challenges in the coming years, not only by boosting public and private investment to secure jobs, help the most affected sectors and regions and protect European citizens from the worst, but also by putting Europe at the forefront of the green and digital revolutions as the propellers of recovery, resilience and competitiveness.
The EBF, together with the community of European banks, stands ready to help their public and private partners by ensuring the effective implementation of the MFF and NGEU. Since the start of the global pandemic, the banking industry has supported its clients – both households and businesses of all types and sizes – wherever possible and will continue to do so. Finance is an essential part of the European recovery phase and economic growth, not only through lending, but also through the range of capital markets services and products they offer. Ultimately to serve the collective purpose of a speedy and effective recovery that will lead to enhanced resilience for the benefit of all EU citizens.
BACKGROUND:
MEDIA CONTACT:
EBF Media Centre, press@ebf.eu, +32 2 508 3732
ABOUT THE EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere. Website: www.ebf.eu
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]]>EBF STATEMENT ON EC INITIATIVE ON COVID-19 RELIEF MEASURES
- Banking sector continues to stand with businesses and households
BRUSSELS, 14 July 2020 – The European Banking Federation, along with other financial industry associations and representatives of consumers and businesses in the European Union, notes today’s announcement by the European Commission concerning best practices in relation to relief measures offered in the context of the Covid-19 crisis.
Throughout this crisis, the banking industry has continued to stand with its clients – both businesses and households – in support of the European economy. Across the EU, banks remain committed to serving their customers and work closely in partnership with public institutions in national programmes to mitigate the economic impact of the pandemic.
The EBF appreciates the European Commission’s initiative to bring together Brussels-based representatives in this context and is pleased to note that the Commission recognizes the efforts by financial services providers to adequately support customers during the pandemic.
The EC’s initiative has led to a high-level agreement among all the participants of two roundtables on best practices organised in May and June 2020. Best practices identified in this document outline temporary, non-binding relief measures that financial institutions are encouraged to implement, when appropriate, on a best-effort basis and as long as they are still relevant depending on the situation in Member States.
All roundtable participants agree to continue the dialogue on the Covid-19 crisis and its impacts in the coming months.
BACKGROUND:
MEDIA CONTACT:
EBF Media Centre, press@ebf.eu, +32 2 508 3732
ABOUT THE EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere. Website: www.ebf.eu
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]]>A centralized register for ESG data in the EU:
EACB, EBF, EFAMA, ESBG, IE, PE Joint Letter
BRUSSELS, 10 June 2020 – The European Banking Federation, together with five other financial industry associations, is calling for the European Commission to establish a common ESG data register in the European Union to enhance the availability of relevant and reliable ESG data, facilitate disclosure and scale-up sustainable funding.
- The data register should focus on ESG disclosure in line with Non-Financial Reporting Directive and EU taxonomy, starting with climate change adaptation and mitigation objectives, as well as ESG data necessary to financial market participants to comply with the Sustainable Finance Disclosure Regulation.
- The register should also include relevant ESG information already collected by European and national institutions such as governments, central banks, statistical bodies, etc. The EU should open up its databases that collect environmental reporting data and make those re-usable to users of non-financial information.
- Such data should be gathered and made available digitally to users of non-financial information, not only investors but also lenders, academia, researchers, authorities and others.
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]]>EBF PRESS RELEASE
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Covid-19: Banks acting responsibly as part of society, EC Roundtable is told
- Banking sector fully committed to helping its clients – businesses and households
- Support for EU plan to propel recovery, with twin revolution in sustainability, digital
BRUSSELS, 28 May 2020 – At the invitation of European Commission Vice-President Valdis Dombrovskis, the European Banking Federation on Thursday took part in the EC’s Roundtable videoconference to review relief measures for businesses and consumers designed to mitigate the effects of the Covid-19 pandemic.
Throughout this crisis the banking industry continues to stand with its clients – both businesses and households. The EBF is grateful to governments and supervisors for the swift actions they have taken to mitigate the potential economic impact of this unprecedented crisis and for the role banks now play in this effort, by supporting businesses experiencing funding shortfall, helping companies remain in business and retain employees, and assuring the continuity of essential services.
While the health crisis is still ongoing, the focus is on ensuring the safety of clients, employees, and families. For all of us the coming months will be a very difficult period during which risks will have to be managed responsibly. We see value in the collaboration of providers of finance and consumers and companies, and are grateful to the European Commission for its leadership in this regard.
Says Wim Mijs, CEO of the European Banking Federation:
“Our industry is part of society and is responsible in the execution of its task. We support the ambitious plan to propel the EU’s recovery by accelerating the twin revolution of industrial digitalization and transition towards a sustainable, inclusive and resilient economy. It is also important that we collectively take a good look at the existing banking regulation and determine where the legal framework has supported the economy and where procyclical measures have caused obstacles, notably in the further implementation of the Basel3 finalisation and in the IFRS9 accounting framework.”
SPEAKING POINTS WIM MIJS IN THE EC ROUNDTABLE: CLICK HERE
As governments, businesses, and households start to look beyond the crisis, banks stand ready to help finance the recovery. To adapt and thrive in the world beyond the crisis, the EU will need to invest in activities that generate long-lasting value for society – be it public health, employment preservation, crisis prevention, or environmental priorities. During the crisis, banks have increased financing of projects with clear social objectives and benefits, and will continue doing so. Banks support the ambitious plan to propel the EU’s recovery by accelerating the twin revolution of industrial digitalization and transition towards a sustainable, inclusive and resilient economy.
Putting companies, especially the small ones, back on their feet and ensuring their competitiveness and future resilience will require improving access to finance and diversifying funding sources to fund innovation. More generally, European banks seek to ensure that financial market products and services are available to meet client needs, recapitalize companies, finance innovation and support the sustainability transformation.
The European Banking Federation and SMEunited on Wednesday agreed a joint statement on recommendations to improve the flow of financing towards small and medium-sized enterprises. The organisations agreed in the importance of an adequate, speedy and smooth credit flow and provision of other critical services to Europe’s SMEs at a time of extraordinary challenges for small companies in Europe.
BACKGROUND:
- Data reported by the European Central Bank in its May 2020 Financial Stability Review shows that loan provisions in March 2020 increased by around 120 billion euro flow– the highest monthly level on record.
- It is estimated that, through the dividends decision coordinated by the EBF, banks have freed up hundreds of billions Euro for lending to European citizens/businesses, by allowing a total of 30 billion Euro of additional capital of the highest quality to be kept within the system.
- Data collected so far by various national banking associations indicate that the state-supported schemes have mostly functioned as intended and the banks have fulfilled their transmission function. Banks are applying interest rates in compliance with the measures established by the law; in most of the cases, interest rates are well below that cap. Early data collected shows that a very high rate of loan applications is fulfilled.
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Policy contact: Media contact:
Burçak Inel Raymond Frenken
Director of Financing the Economy Director of Communications
European Banking Federation European Banking Federation
+32 496 34 47 88 +32 2 508 37 32
b.inel@ebf.eu r.frenken@ebf.eu
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About the European Banking Federation:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere. Website: www.ebf.eu Twitter: @EBFeu.
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