What to expect from the ECB's June monetary policy meeting?

The ECB’s Governing Council will meet on Thursday 4 June via a video conference for its monetary policy meeting. The ECB is due to agree new set of macro-economic projections to decide whether the eurozone economy will make a swift recovery from the pandemic or not. The ruling of the German Constitutional Court and the possible exhaustion of the 750bn envelope of the PEPP programme will also ask for an intense discussion on a possible increase of the programme. The ECB has already spent more than €180bn of the PEPP and if it continues at that rate, the programme is set to run out of firepower as early as October. ECB decisions will be announced at 13:45 CET, followed by a press conference with ECB President Christine Lagarde, at 14:30. Read more

FROM THE MEDIA today

CNBC: Joint financial power much needed to support EU - Dombrovskis

The European Union needs to agree on additional coronavirus-related stimulus “in the coming months,” a top EU official told CNBC. The European Commission proposed to raise 750 billion euros in public markets and distribute that money in the form of grants and loans to the 27 EU countries. However, some nations are reluctant to approve the idea as it would mark the first time the EU tapped financial markets together on such a large scale. The proposal needs to be agreed upon by EU members before it can be implemented. Banks are playing a very different role in the current crisis than they did in the last one more than a decade ago. Banks are now on the frontlines in channeling public aid to companies that desperately need cash, writes Bloomberg based on Dombrovskis comments. Read more Bloomberg
 

Reuters: EU recovery fund has 'green strings'

The European Commission said it will attach climate conditions to its massive funding package to save Europe’s coronavirus-battered economies, but stopped short of banning support for all fossil fuels, reports Reuters. EU's Commissioner for the Green Deal, Frans Timmermans proposed a 1.1- trillion-euro EU budget for 2021-27 and a new 750 billion economic recovery fund while doubling down on its goal to become “climate neutral” by 2050. The proposal earmarks 25% of the budget for climate-related spending. All money from the recovery fund, including cash not going to green projects, must meet climate conditions. Read more Euractiv EUObserver
 

Politico: Analysing the European recovery fund

An analysis Politico concludes that the proposals put forward by Commission President Ursula von der Leyen are reassuringly familiar in its form and structure. Wherever you look in the Commission’s proposals, you recognize features from the EU's financial past. The conditionality that is to be attached to the grants and loans, while it could be highly controversial is not new. In other news, Euractiv reports that German MEPs expressed their support for the recovery plan presented this week, despite being opposed to joint debt plans before. Read more Euractiv Euronews

Bloomberg: ECB set to raise economic stimulus

The European Central Bank will step up emergency asset purchases next week to haul the economy out of its much deeper than originally anticipated slump, according to a Bloomberg survey of economists. Almost three in four respondents said the ECB’s pandemic program will be increased on Thursday, when the Governing Council holds its next scheduled meeting. The majority expects a top-up of 500 billion euros that would take purchases under all plans this year to 1.6 trillion euros. Read more

Reuters: Bank capital rules need adjusting in face of crisis

Bank capital regulations need to be further adjusted to limit the impact of the coronavirus crisis on lenders’ balance sheets, the head of France’s central bank said according to Reuters. Read more

EBF IN THE NEWS this week
 

FROM THE INSTITUTIONS this week

European Commission and EIB propose to support green investments

The European Commission presented its proposal for a public sector loan facility under the Just Transition Mechanism. The facility will be implemented with the involvement of the European Investment Bank (EIB) and will encourage investments that support the transition towards a climate-neutral economy by public sector authorities to the benefit of coal- and carbon-intensive regions. Read more

ECON: Transformation must be social, economically fair and green

On Wednesday, MEPs discussed the European Semester and economically and socially sustainable ways out of the crisis with Commissioners Dombrovskis, Gentiloni and Schmit. Economic and Monetary Affairs Committee (ECON) MEPs stressed that in order to become a proper recovery tool, the Commission’s Country-Specific Recommendations (CSR) have to be implemented in the member states and must take into account a post-crisis reality. Read more
 

ESMA updates its Q&As on the Securitisation Regulation

The European Securities and Markets Authority (ESMA), updated its Questions and Answers on the Securitisation Regulation (Regulation 2017/2402). The majority of the new Q&As in this document provide clarification on different aspects of the templates contained in the draft technical standards on disclosure which are published on the website of the European Commission. Read more

ECB: Banking supervision measures in the context of the Covid-19

Edouard Fernandez-Bollo, Member of the Supervisory Board of the ECB, has given a presentation of European banking supervision measures in the context of the COVID-19 pandemic. Read more

EBA: Covid-19 is placing unprecedented challenges on EU banks

The European Banking Authority (EBA) published a preliminary assessment of the impact of Covid-19 on the EU banking sector. With the global economy facing unprecedented challenges, banks entered the health crisis with strong capital and liquidity buffers and managed the pressure on operational capacities activating their contingency plans. Read more

BIS: Payment holidays in the age of Covid-19

The BIS has published a speech by Yannis Stournaras, Governor of the Bank of Greece, on the recent decision of the German Constitutional Court regarding the Public Sector Purchase Programme of the European Central Bank. Read more

EBF MEMBERS IN THE NEWS this week

FINANCE FINLAND WEBINAR
 

ESG data – the capital in the sustainable transition 

11 June 2020, 10-11.45 CET

Finance Finland hosts a webinar with MEP Sirpa Pietikäinen, Hanken School of Economics, Finance Denmark and Finance Norway to discuss the current availability of ESG data and ideas to make it more accessible and usable for e.g. financers, policymakers, researchers and many more. Registrer HERE

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.