| EBF MORNING BRIEF Monday 16 March 2020 Good morning. These are the top news stories and events in European banking, financial regulation and EU policy, brought to you by the European Banking Federation.
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FROM THE MEDIA
Bloomberg: Fed cuts main interest rate to near zero
The Federal Reserve swept into action on Sunday in a new bid to save the U.S. economy from the fallout of the coronavirus reports Bloomberg. Cutting its benchmark interest rate by a full percentage point to near zero and promising to boost its bond holdings by at least $700 billion. Read more
Politico: This time banks could be the good guys
Europe’s banks have a chance to be the good guys in the coronavirus crisis, says Politico. At least that’s what EU policymakers are hoping as they relax rules and offer government guarantees to support lenders during the economic fallout. They expect banks to be part of the solution rather than the problem, in contrast to a dozen years ago during the worst financial crisis of living memory. Read more (€) Bloomberg: Danske Bank eases clients hit by coronavirus fallout Danske Bank A/S will stop charging negative interest rates to thousands of small business clients as part of a palette of measures intended to stem the fallout of the coronavirus through the economy reports Bloomberg. “We are in an extraordinary situation that has major financial implications for society, businesses and families alike,” Chief Executive Chris Vogelzang said in a statement on Sunday. Read more
Les Echos: Frédéric Oudéa: "Banks are totally safe"
The Chairman of the French Banking Federation and Chief Executive Officer of Societe Generale underlines the much stronger solidity of banks compared to the 2008 crisis. He assures that they will play their role vis-à-vis companies, but expects the State to play its role as well. Read more (FR)
FT: Europe’s banks face a test of resilience More than a decade on from the financial crisis, Europe’s banks are facing a major test of their resilience, argues the FT. This week growing fears about the coronavirus pandemic and an oil price war prompted a widespread market sell-off. Companies have spent a decade gorging on cheap debt in an ultra-low interest rate environment. A wave of defaults is now likely, and rising loan impairments will hit banks’ already anemic earnings. Read more (€)
NYT: Global economic coordination lacking in virus crisis
With the global economy melting down after the failure of Lehman Brothers in 2008, world leaders swiftly created an international forum that committed to boost economies by spending more and keeping trade open, reports the New York Times. Central banks announced rate cuts within seconds of each other. Read more (€) |
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MAIN EVENTS today -
Council of the EU: Eurogroup -
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G7: Heads of state extraordinary summit via video call (COVID-19 crisis)
*All events take place in Brussels unless stated otherwise
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FROM THE INSTITUTIONS
ECB: Coordinated central bank action on US dollar liquidity
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank announced on Sunday a coordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements. Read more
ECB's Fabio Panetta interview with Corriere della Sera
The European Central Bank is ready to rein in "unjustified" spreads between eurozone bond yields and even to beef up purchases to combat the fallout from the coronavirus, board member Fabio Panetta said in an interview with Corriere della Sera published on Sunday. Read more
European Commission publishes EU response to COVID-19
The European Commission has sent a communication to the other EU institutions covering a coordinated economic response to the COVID-19 outbreak. It states that the Commission will fully use all the tools at its disposal and outlines the immediate response to mitigate the economic impact of COVID-19 including liquidity measures, alleviating the impact on employment, and the Coronavirus Response Investment Initiative. Read more European Commission calendar for this week Find out more about the Commission's engagement and activities for the upcoming week. Read more
European Central Bank weekly schedule Find out more about the ECB's engagements and activities for the upcoming week. Read more
European Parliament agenda Find out more about the Parliament's engagements and activities for the upcoming week. Read more |
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EBF MEMBERS IN THE NEWS
France: Coronavirus: total mobilization of French banks
The banks announced last week that they are fully mobilized to support their customers, particularly traders, professionals, small and medium-sized enterprises, who could face difficulties resulting from the development of the coronavirus epidemic that could temporarily impact their business. French banks will be at their side to support them during this exceptional period. Read more (FR)
Finland: Banks and the risks coming from the Coronavirus On 12 March 2020, the European Central Bank announced the possibility for banks under its direct control to be flexible about certain additional capital and liquidity requirements. This will support the ability of banks to respond to market uncertainties related to the coronavirus, as appropriate, and to continue financing the economy. According to the Financial Supervisory Authority, the Finnish banking sector is exposed to the risks posed by the coronavirus epidemic as financially sound. Read more (FI)
Germany: Banks welcome federal government funding measures
On 13 March 2020, the Federal Government decided to extend the funding programs in the direction of risk-taking through the KfW (Kreditanstalt für Wiederaufbau). The banking sector supports this measure. The announced expansion of these funding programs to include higher liability and application rights is the right way. Support measures should, in particular, reach the many small and medium-sized companies. Read more (DE)
Switzerland: Federal Council supports SMEs in financial bottlenecks
On March 13, 2020, the Federal Council decided on an immediate measure to support small and medium-sized enterprises (SMEs) with liquidity shortages. Up to CHF 590 million of guaranteed bank loans are still available. The Swiss Bankers Association (SBA) informs its members about the measure and is in close contact with the responsible authorities. Read more (DE) |
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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. 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. |
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