Wednesday: EU to step up fight against fight money laundering
 

Following the publication in March of the EBF's recommendations to fight money laundering the EU Commission on Wednesday will present its own legislative proposal for stepping up the fight against money laundering in the EU. Setting up a credible framework is essential to maintain the integrity of the European financial system and reduce risks to financial stability. The Commission intends to implement a comprehensive AML/CFT policy, adapted to the specific threats, risks and vulnerabilities and designed in a manner that can evolve efficiently while taking into account innovation. That framework is meant to complete Banking Union.
EBF Report: Lifting the Spell of Dirty Money

FROM THE MEDIA today

OMFIF: Lagarde faces pressure today over ECB support for Italy

Christine Lagarde, as President of the European Central Bank, today will face pressure to expand European Central Bank action to support Italian bonds in the absence of new European Union fiscal measures to aid pandemic-hit euro members, writes OMFIF. The ECB's monetary policy meeting will be followed by a press conference at 14:30 CET. Read more Livestream via ECB Euractiv/AFP

Q1: Major banks reserve another €4.3 bln towards Covid-19 impact

Six major European banks this morning posted all declines first-quarter earnings as they collectively reserved another 4.3 billion euro in loan loss provisions related to the Covid-19 outbreak. Societe Generale posted a first-quarter loss on said it would make deeper cost cuts in 2020 as its provisions against bad loans increased threefold, says Reuters. BBVA took a combined hit for virus-related provisions and a second consecutive charge at its U.S. business to post its biggest-ever quarterly loss, reports Bloomberg. Danske Bank swung to a first-quarter net loss, hit by a jump in impairment charges. UK-based Lloyds Banking Group posted a huge 95 per cent fall in profit for the first quarter and a charge of €1.6 billion as the coronavirus crisis took hold in the UK, says City AM. Reuters Bloomberg City AM RTE Societe Generale  BBVA Danske Bank  Lloyds Sabadell DNB
 

Bloomberg: Nordic bank watchdog sounds the alarm

The financial watchdog in Denmark says it’s a bad idea to ease impairment rules to help banks cope with the economic crisis triggered by Covid-19, reports Bloomberg. “It’s a little bit like when people are sick: you don’t want to manipulate the thermometer,” Jesper Berg, the director general of the Financial Supervisory Authority in Copenhagen, said in an interview. “If you do that, you risk not taking the actions you need to take, both as a bank but also as a supervisor.” Read more
 

Reuters: Slovak central bank battles tax on banks

Slovakia’s central bank stepped up calls on Wednesday for the government to change or cancel a bank tax after the country’s lenders saw profits fall by half in the first quarter as the coronavirus outbreak accelerated, reports Reuters. Read more

Bloomberg: Balancing business lending versus shareholders

The European Central Bank has gone to great lengths during the coronavirus crisis to ensure that lenders can keep pumping credit into the economy, states Bloomberg in an opinion article. It immediately provided flexibility on the treatment of non-performing loans, and allowed banks to make full use of capital and liquidity buffers that were put in place to keep the financial system safe after the 2008 crisis. Still, any supervisory help will be irrelevant if banks are unwilling to worsen the quality of their balance sheets because of the fear of upsetting investors. Read more
 

Barrons: An Odd Connection --- Mexican Stocks and European Banks

Mexican equities generally and European banks in particular don’t seem like they are obviously connected, but the two assets have been highly correlated, writes US financial magazine Barrons. Read more

EBF IN THE NEWS this week

EBF supports Covid-19 update on EU banking package

The European Banking Federation welcomes the EU legislative initiatives for regulatory flexibility to boost bank lending announced on Tuesday by the European Commission and hopes that the measures proposed will be implemented within the short timeframe laid out so that business and households can benefit. Read more

EBF’s views on the evaluation of the Consumer Credit Directive

The EBF believes that the Directive on consumer credit provides a sound and solid framework on fair access to credit, together with clear provisions on consumer protection. The creditworthiness assessment requirements, for example, establish a set of rules ensuring, not only consumer protection but also that costs of over-indebtedness and any resulting non-payment of loans be minimised. Read more

The European Banking Federation fully supports the European Commission’s efforts to relaunch the Capital Markets Union (CMU) and, specifically, the work of the High-Level Forum (HLF). The EBF sees the need for further integrated capital markets.  Read more

FROM THE INSTITUTIONS this week

BIS - FSI Brief: Guarantees for bank lending in response to Covid-19

In response to the Covid-19 pandemic, governments have launched guarantee programmes to support bank lending to companies, especially small and medium-sized enterprises. This is essential to avoid a sharp contraction in bank credit that would exacerbate the pandemic’s adverse impact. Read more

ECB: Extension of deadlines for the reporting of statistical information

The ECB has published a communication to reporting agents on the extension of deadlines for the reporting of statistical information in the context of Covid-19. Read more

Commission adopts banking package to facilitate lending in the EU

On 28 April 2020 the Commission adopted a banking package aimed at facilitating bank lending to support the economy and help mitigate the economic impact of the Coronavirus. Read more EC's Dombrovskis remarks

ECON: MEPs call for novel tools to address the economic crisis

Opening the discussion held within the Economic and Monetary Affairs Committee (ECON), Committee Chair Irene Tinagli (S&D, IT) underlined that although the measures agreed by the European Council were to be welcomed, more was needed, including fresh funds.  Read more

European Commission: Future relationship negotiations with the UK

Michel Barnier has given a press conference on the status of the negotiations, calling it disappointing. He said that a “smart agreement” would be needed to prevent a double economic hit of the Covidv-19 crisis and a ‘hard’ Brexit. Read more

Eurofi: Views on the Covid-19 crisis impacts

Strong policy responses and international cooperation are required to tackle the unprecedented health, monetary, economic, and financial stability challenges posed by the Covid-19 pandemic. Read more

UNEP FI: Signatories share responses to Covid-19

UNEP Finance Initiative is providing a platform for banks to exchange experiences and ideas as they take action to support society and businesses in this unprecedented crisis. Read more

EBF MEMBERS IN THE NEWS this week

Belgium: Guarantee scheme for companies and self-employed people

The Federal Government has activated a guarantee scheme for all new loans and credit lines of up to 12 months duration that the banks will grant to viable non-financial enterprises and self-employed persons. Read more (FR)

Hungary: interview with Levente Kovács on instant payments

Prof. Dr. Levente Kovács, General Secretary of the Hungarian Banking Association, spoke to the European Payments Council on the developments of instant payments in Hungary after AFR, the Hungarian Retail Instant Payment System, was launched 2 March. Read more

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.