Eurogroup finance ministers to meet Tuesday for EU solidarity test

Tuesday 7 April will see a much-anticipated meeting of Eurogroup finance ministers. The political leaders of the 27 EU Member States have asked the group to prepare a proposal for how Europe's economy can steady government finances during the Covid-19 crisis and set the stage for a later recovery once the pandemic recedes. In a letter to finance ministers, reported by AFP, Eurogroup President Mario Centeno (picture) has warned the euro single currency could break apart if feuding governments don't bury the hatchet and agree on a rescue plan to help Italy and Spain. "Inevitably, we will all come out of the crisis with much larger debt levels. But this effect and its lasting consequences should not become a source of fragmentation," Centeno's letter said. The Eurogroup has until Easter to agree on a way forward. Agenda AFP

FROM THE MEDIA today

Reuters: EU banking watchdog sets out relief for virus-hit loans

The EU banking watchdog published guidance on Thursday to help banks avoid having to step up provisioning for loans to companies temporarily hit by the coronavirus crisis, reports Reuters. Several EU countries have introduced stop-gap “moratoria” such as repayment holidays for companies and individuals as large parts of the economy are in lockdown and unemployment rockets. Read more
 

Various media: Eurozone PMI index at lowest level ever recorded

Global stock markets have experienced a shaky start to the second quarter this week as investors to assess the potential economic ramifications of widespread lockdowns and the persistent spread of the coronavirus, reports CNBC. A combined analysis of the Eurozone’s manufacturing and services sectors shows the biggest ever single monthly fall in March. The composite PMI reading, released Fridday, was the lowest ever recorded as part of the survey, at 29.7, report Reuters and The Guardian. Read more Politico The Guardian Reuters

Bloomberg: US mortgage defaults could pile up at rapid pace

US mortgage lenders are preparing for the biggest wave of delinquencies in history. If the plan to buy time works, they may avert an even worse crisis: Mass foreclosures and mortgage market mayhem. Borrowers who lost income from the coronavirus -- already a skyrocketing number, with a record 10 million new jobless claims -- can ask to skip payments for as many as 180 days at a time on federally backed mortgages, and avoid penalties and a hit to their credit scores. Read more

Bloomberg: Financial criminals see opportunities in Europe

Criminals are increasingly trying to profit from the turmoil unleashed by the coronavirus pandemic, posing a new challengeto bankers who are expected to continue guarding against illicit financial flows, says Bloomberg. Austria’s financial regulator on Thursday became the latest authority to warn of a jump in criminal activity as the drastic changes in working conditions and chaotic markets make it more difficult. Read more FD (NL)
 

Finextra: Banking industry sets out vision for EU payments market

With payments revenue taking a massive hit in the face of the Covid-19 pandemic, the European banking industry is looking to the future, setting out its vision for the future of the market, says Finextra. McKinsey is forecasting a dramatic decline in payments revenue as the Coronavirus crisis hits economic activity across the globe. Banking associations, including the EBF, point out that the crisis has brought to the fore the importance of well functioning payments services. Read more
 

Euractiv: EU tells insurers to suspend dividends

Insurers and reinsurers in the EU should temporarily suspend dividends and share buybacks, and consider postponing bonuses as well to ensure continuity in services during the coronavirus pandemic, the bloc’s insurance regulator said according to Euractiv. Read more

EBF MEMBERS IN THE NEWS this week

FROM THE INSTITUTIONS this week

EBA provides guidance to banks on default moratoria 

The European Banking Authority Thursday published more detailed guidance on the criteria to be fulfilled by legislative and non-legislative moratoria applied before 30 June 2020. The aim of these Guidelines is to clarify the requirements for public and private moratoria, which if fulfilled, will help avoid the classification of exposures under the definition of forbearance or as defaulted under distressed restructuring. Read more

European Parliament Plenary Session 16-17 April announced

The European Parliament has published its tentative agenda for an extraordinary Plenary session in Brussels on 16-17 April 2020. The session will include a debate with Council and Commission and a vote on a resolution on EU coordinated action to combat the Covid-19 pandemic and its consequences. Read more

ECB extends review of its monetary policy strategy until mid-2021

The ECB has extended the review of its monetary policy strategy until mid-2021. It continues to invite euro area citizens to submit their written proposals and comments about the ECB’s monetary policy strategy, in their euro area language, via the dedicated online ECB Listens Portal. Read more

FSB: Actions to ensure continuity of critical financial services functions

The FSB has announced that its members take action to ensure the continuity of critical financial services functions. These actions include regularly sharing information on evolving financial stability threats and on the policy measures that financial authorities are taking, assessing financial risks and vulnerabilities in the current environment, and coordinating policy responses to maintain global financial stability, keep markets open and functioning. Read more

United Nations: COP26 in Glasgow postponed

The COP26 UN climate change conference set to take place in Glasgow in November has been postponed due to COVID-19 to the summer of 2021. This decision has been taken by representatives of the COP Bureau of the United Nations Framework Convention on Climate Change, together with the UK and its Italian partners. Read more

EBA: Mitigating the impact of Covid-19 on the EU banking sector

Following its call for flexibility in the prudential framework and supervisory approaches to support lending into the real economy, the European Banking Authority clarified on Monday its expectations in relation to dividend and remuneration policies, provided additional guidance on how to use flexibility in supervisory reporting and recalled the necessary measures to prevent money laundering and terrorist financing. Read more

EC: Statement following first meeting of the EU-UK Joint Committee

Following the first meeting of the EU-UK Committee the European Commission announced that the parties have decided to launch the work of the six Specialised Committees on the key areas for the implementation of the Withdrawal Agreement. This work concerns in particular safeguarding the rights of around 4.5 million EU citizens and UK nationals, and maintaining peace and stability on the island of Ireland in the context of the Good Friday Agreement, while ensuring the integrity of the Single Market. Read more

EBF IN THE NEWS this week

Euromoney: EBF’s Mustier warns: 'We cannot avoid a financial crisis'

Jean Pierre Mustier, chief executive of UniCredit and chairman of the European Banking Federation,, was interviewed by Euromoney this week. “We cannot avoid a financial crisis, although it is too early to say in what form,” he says. “There will be a lot of SMEs with problems and the cost of risk of banks will increase. The most important thing we need to discuss between the banks is how to make sure that the transmission mechanism works. Banks and governments need to work together to make sure the measures put forward by governments and the ECB are properly implemented: to help governments deposit money in people’s bank accounts; to pay temporary unemployment income; to properly implement loan guarantees and make sure they reach the SMEs.” Read more

EBF response to the Commission consultation on crypto-assets

Banks recognizing the general potential of DLT technology, but are aware of related challenges and risks. The EBF supports the careful attention that EU institutions are paying to the risks of crypto-assets, e.g. in terms of implications for the monetary policy. Read more

Banks puts forward vision for future-driven EU payments market

The European Banking Federation, together with the European Association of Cooperative Banks and the European Savings and Retail Banking Group, has put forward its vision for the development of the EU retail payments market for the coming years in the paper ‘Payments Policy for Europe: Direction for the next five years’. The paper highlights the three associations’ member commitment to a strong, innovative and competitive EU retail payments market. Read more Full paper

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.