📰 EBF Weekly Brief - Friday 10 July

Recovery pack, EU budget up for discussion at in-person EU summit

Brussels will convene an extraordinary EU summit on July 17-18, in a bid to resolve a stalemate among EU leaders on the bloc’s long-term budget and the Coronavirus recovery package. It will be the first in-person meeting of the heads of state and government across the EU, since February. The leaders will devote the talks to the €750 billion recovery roadmap put forward by Commission. The proposed package consists of €500 billion in grants and €250 billion in loans, to help businesses recover from an unprecedented crunch. The Netherlands, Austria, Denmark and Sweden, the so-called "frugal four", insist that loans with tough conditions attached, rather than grants, should be the preferred method of rescue. At the latest virtual EU summit, Dutch Prime Minister, Rutte told leaders he did not believe "an enormous rush is needed". Complicating matters still further, the recovery fund is linked to the EU's long-term, seven-year budget, which leaders will negotiate in parallel. Read more

FROM THE MEDIA today

Reuters: Coronavirus to cost global banks €1.8 trillion

Global banks face combined loan losses of €1.8 trillion ($2.1) by the end of 2021 as a result of the coronavirus crisis, credit ratings agency S&P Global estimates according to Reuters. Despite the biggest losses stemming from Asia-Pacific region, the highest relative increases - at more than double on average compared with 2019 - will occur in North America and Western Europe. “We estimate that the top 200 rated banks represent about two-thirds of global bank lending,” a group of S&P’s top analysts said in a new report. Read more S&P Global Zerohedge

FT, Telegraph: EU to maintain access for London clearing houses

Brussels is to adopt emergency measures to preserve Europe’s access to crucial UK financial market infrastructure after the country’s post-Brexit transition period expires, EU Vice-President for financial services said according to various media. Read more (€) City A.M. Telegraph GlobalCapital

Reuters: Ireland's Donohoe takes Eurogroup helm

The Eurogroup of euro zone finance ministers on Thursday elected Ireland’s Finance Minister Paschal Donohoe as its new chair, a job that will see him try to steer the group’s coronavirus-damaged economies out of their worst recession, reports Reuters. According to Bloomberg Germany, France, Italy and particularly Spain were angered by a loss that they failed to see coming. Countries from eastern Europe said they felt that in backing Donohoe they were supporting one of their own. Read more Bloomberg Euronews FT(€)

Law360: EU Commission takes AML agency plans to Parliament

The European Commission has set out plans to the bloc's legislative body for creating an EU-wide authority that will help to supervise, enforce and coordinate rules on combating money laundering. According to Law360 Commission Vice President Valdis Dombrovskis told the European Parliament on Wednesday that the bloc needs a common authority to directly supervise the riskiest financial institutions and oversee the non-financial sector. Read more (€)

Euractiv: German supervisor under fire following Wirecard scandal

The balance sheet scandal surrounding the payment company Wirecard raises many questions. Euractiv reports on the role of the German Federal Financial Supervisory Authority in the investigation. The Wall Street Journal reports that German prosecutors are looking into possible money laundering by executives at Wirecard, adding to ongoing probes related to potential fraud and fake accounting at the insolvent payments firm. Read more WSJ(€)

FROM THE INSTITUTIONS this week

Eurogroup: Paschal Donohoe elected Eurogroup President

The Eurogroup elected Paschal Donohoe, Minister for Finance and Public Expenditure and Reform of Ireland, as President of the Eurogroup. In addition, the Eurogroup exchanged views on the economic situation in the euro area, based on a presentation of the European Commission's summer 2020 interim economic forecast. Ministers also discussed the budgetary situation in the euro area. The outcome will feed into the preparation of the draft budgetary plans and the recommendations for the euro area for 2021. Read more Eurogroup Main Results

EBA: Statement on resolution planning in light of the Covid-19

The European Banking Authority (EBA) published a statement on resolution planning in light of the Covid-19 pandemic. With this statement, the EBA intends to reiterate the importance of resolution planning in times of uncertainty to ensure that resolution stands as a credible option in times of stress. In addition, the EBA highlights the importance of resolution authorities to continue promoting institutions’ efforts to enhance their capabilities and increase their resolvability. Read more

EBA: EP confirms François-Louis Michaud as Executive Director

After a plenary vote in the European Parliament on 8 July 2020, François-Louis Michaud was confirmed as the new Executive Director of the European Banking Authority (EBA). François-Louis Michaud, who will serve a five-year renewable term, was selected by the EBA Board of Supervisors from a shortlist of candidates compiled by the EBA Selection Committee. Read more

Budget and recovery: MEPs push for clarity on EU own resources

The EU should secure adequate funding to push through its recovery plans and emerge stronger from the Covid-19 crisis, MEPs said during a plenary debate on 8 July. The discussion with European Council President Charles Michel focused on the prospects of member states finding an agreement on the EU's budget for 2021-2027 and the crisis recovery plan at their summit on 17-18 July. Read more

Time to act together: Von der Leyen at the Parliament July plenary

“If we do it right, we can also emerge stronger from this crisis thanks to a common European purpose based on NextGenerationEU,” President of the European Commission Ursula von der Leyen said on 8 July. She spoke at the European Parliament plenary on the presentation of the programme of activities of the German Presidency of the Council of the EU. “This Presidency has chosen to put one word at the core of its programme. Gemeinsam. Together. Tous ensemble. That is the engine of our Union”, she stressed at the start. Read more

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FROM THE MEMBERS this week

Sweden: Banks part of the solution

Thanks to the co-operation between governments, supervisory authorities and banks, the economy remains afloat, which has played a key role in the co-operation. Now it's time to focus on recovery says Wim Mijs, CEO of the European Banking Federation, in an interview with the Swedish Bankers' Association. Read more (SE)

Denmark: Online banking fraud is on the rise

Online banking fraud is on the rise. Raising awareness of how criminals work and what you can do to stop it can stop the method. Yet in 2019, in nearly 1,500 cases, criminals managed to gain access to the personal codes. In this way, they got away with a total of 52 million of Danish crowns. This shows Finance Denmark's latest figures. Read more (DK)

Switzerland: Open banking in Switzerland: between hype and reality

The SBA has published its assessment of where the Swiss financial centre stands in relation to open banking. To date, the market-based approach has worked well. For the financial centre, it is crucial to look beyond the hype and recognize the strategic dimension of open banking in time, writes Richard Hess, Head of Digitalisation from the Swiss Bankers Association. Read more

The Netherlands: A unique step in the fight against money laundering

Five Dutch banks (ABN AMRO, ING, Rabobank, Triodos Bank and de Volksbank) have decided to establish Transaction Monitoring Netherlands (TMNL) in the collective fight against money laundering and the financing of terrorism. The TMNL initiative will be an addition to the banks’ individual transaction monitoring activities. Chris Buijink, President of the Dutch Banking Association (NVB) said: “The fight against money laundering and the financing of terrorism is a top priority in the banking sector and TMNL is an essential collective step that is a world-first.” Read more

Ireland: BPFI statement on payment breaks and accrued interest

In a comprehensive statement issued by Banking & Payments Federation (BPFI), BPFI Chief Executive Brian Hayes stated: “The Irish payment break moratoria including the accrual of interest is, always has been and remains fully in line with EBA Guidance.” Read more

FROM THE EBF this week

Future changes to the EU-wide stress test: EBF response

The EBF fully supports the European Banking Authority’s initiative to review the EU-wide stress testing framework. In its response to the EBA’s discussion paper on future changes to EU-wide stress test, the EBF highlighted a list of key concerns. Read more

Banks launch European Payments Initiative - Joint press release

The ECSA group of bank associations, including the European Banking Federation welcome the decision taken by a group of 16 major European banks to take their European Payments Initiative (EPI) to the next phase. The implementation phase of the EPI is set to start this summer as it aims to become a true pan-European payment solution leveraging notably instant SEPA credit transfers. Read more

High-Level Forum’s Report on the Capital Markets Union: EBF Response

The European Banking Federation fully supports the publication of the final report of the High-Level Forum on the Capital Markets Union “A New Vision for Europe’s Capital Markets”. As the initiator and coordinator of the Markets4Europe campaign, the EBF fully believes that the upcoming Action Plan should be used to remove regulatory obstacles as recommended in the campaign’s roadmap “Transforming Europe’s Capital Markets”. Read more

EBA consultation non-trading book positions under FRTB: EBF response

The EBF has responded to the consultation paper on draft RTS on the treatment of non-trading book positions subject to foreign-exchange (FX) risk or commodity risk of the European Banking Authority (EBA). Read more

The European Banking Federation and fTLD Registry Services (fTLD) are partnering to educate the European banking sector about the cybersecurity role .BANK plays in protecting banks against Business Email Compromise (BEC) scams, phishing and spoofing attacks that lead to breaches, identity theft and financial fraud. fTLD administers the .BANK domain and the EBF has served on its Advisory Council since 2013. To learn more about the security benefits of .BANK, visit https://www.register.bank/ebf/ or contact fTLD at EBF@fTLD.com.

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.