📰 EBF Weekly Brief - Friday 24 April

Q1 reports show how banks brace for impact of Corona outbreak

To find out how banks brace themselves for the economic impact of the Coronavirus pandemic keep track of the first-quarter earnings reports that major banks will release next week. This week, Credit Suisse, Handelsbanken and Swedbank released their results and each one increased their financial provisions for loan losses, anticipating further economic trouble in the coming months. Unicredit, Italy's largest bank due to report on 6 May, this week already announced a 900 million euro loan loss provision related to Corona. The list of those reporting next week includes UBS, Santander, HSBC, Deutsche, Nordea, Barclays, BBVA, Lloyds and others. Reuters WSJ (€)

FROM THE MEDIA today

Euractiv: EU leaders want large recovery fund, stall on details

German Chancellor Angela Merkel signalled that she was open to offering major financial support for a coronavirus recovery package worth as much as €2 trillion, but wanted to see how it would be used before committing, says Euractiv. An EU summit made previously "unthinkable" progress on the economic response to the COVID-19 crisis, according to Deutsche Welle. Read more Deutsche Welle Reuters

Bloomberg: ECB seen boosting pandemic response to help economy

The European Central Bank will increase emergency bond-buying in the coming months to ramp up support for an economy that President Christine Lagarde sees shrinking as much as 15% this year, according to a Bloomberg survey of economists. Read more

Reuters: Private banks’ loan push will survive virus scare

Wealth managers’ lending appetite should survive the pandemic, says Reuters. Collapsing markets triggered a raft of margin calls on loans to rich clients in the first quarter. Yet Credit Suisse’s relatively modest first-quarter bad debt provisions suggest the pain for big wealth managers will be manageable. And the promise of quick credit should ensure the wealthy keep borrowing. Read more

Global Capital: Europe's banks claim home advantage in lending spike

After years of not only falling loan volumes but being trounced in their own back yard, Europe's banks finally seem to have an edge against their US counterparts, according to Global Capital. With loan pricing gapping out in response to the coronavirus pandemic, but companies desperate for cash, the continent's lenders are proving first port of call for local borrowers, leaving US and Asian banks less active. Read more (€)

Bloomberg: Many European companies won’t survive virus

The economic damage wrought by the coronavirus is clear in countless stories across Europe, from business owners furiously fighting to keep their firms afloat to those who see no hope, reports Bloomberg. In France, where more than half of small firms fear bankruptcy, the crisis led to a public showdown on live television between entrepreneurs and the country’s finance minister. Read more

S&P Global: How COVID-19 is affecting bank ratings

Banks across the world will inevitably face negative rating momentum through 2020 as a result of the significant effects of the coronavirus pandemic, oil shock, and market volatility, reports S&P Global. It is also anticipated this will mostly be limited to negative outlook revisions this year, with a comparatively smaller proportion of downgrades. Read more

EUROPEAN MONEY QUIZ 2020

TUESDAY 16 JUNE: GRAND FINALE ONLINE

To mark the close of the 2020 European Money Quiz season, everyone is invited to join us for the GRAND FINALE on Tuesday 16 June. Winners of some 30 national European Money Quiz finals will take part and you can test yourself against them by competing in the biggest online live financial literacy quiz in Europe. www.europeanmoneyquiz.eu

EBF MEMBERS IN THE NEWS this week

UK: Current State of Play: The UK’s Departure from the EU

The last day of January 2020 marked Brexit day. However, the transition period that commenced muted immediate changes, with the UK continuing to be treated as a member state under EU law until 31 December 2020. Read more

Denmark: Reinforced tax laundering efforts are important

The Danish government has presented its proposal to strengthen tax control in Denmark and to intensify the fight against money laundering. Read more (DK)

Germany: Martin Zielke becomes the new Bankenverband president

Handover of office at the Association of German Banks (Bankenverband): Martin Zielke, Chairman of the Board of Managing Directors of Commerzbank AG, was elected as the new President. Read more (DE)

Spain: Interview with AEB's José Luis Martínez on Galician Radio

Spanish banks are prepared to face the difficult situation generated by the crisis. In recent years they have strengthened their capital levels said José Luis Martínez in an interview on the programme "Galicia por diante". Read More (ES)

Netherlands: Covid-19: 5.4 billion euros room for businesses

Since the outbreak of the corona crisis in March, banks in the Netherlands have, in addition to the government's support package, temporarily given 105,000 entrepreneurs and more than 17,000 consumers more financial air. Read more (NL) Infographics (EN)

Switzerland: Feedback on the credit programme: BCBE and BiCT SA

In the series "Feedback on the credit programme", SBA presents the concrete experiences and opinions of banks and SMEs involved in this programme. Read more (FR)

FROM THE INSTITUTIONS this week

Conclusions of the President of the European Council

Divisions among European nations over the structure of an economic recovery program continue after European Union leaders again failed to reach an agreement. But the group endorsed the recent recommendation of EU finance ministers for a short-term rescue package. The 27 EU leaders met via video conference on Thursday to discuss several proposals intended to stabilize the bloc's economy and support the domestic economies of the countries hardest hit by the coronavirus pandemic. Read more

ESAs consult on Environmental, Social and Governance disclosure rules

The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) have issued a Consultation Paper seeking input on proposed environmental, social and governance (ESG) disclosure standards for financial market participants, advisers and products. Read more

ECB: Steps to mitigate rating downgrades on collateral availability

The ECB has announced steps to mitigate the impact of possible rating downgrades on collateral availability. Read more

ECON: ECON Committee to meet on Monday 27 April 2020

The ECON Committee will meet on Monday 27 April 2020. On the agenda is an exchange of views with Vladis Dombrovskis and Paolo Gentiloni on the economic impact and the response to the Covid-19 outbreak. Agenda

BIS: Insurance regulatory measures in response to Covid-19

Authorities have responded to the Covid19 pandemic with measures to provide operational relief to insurers from regulatory and supervisory requirements so that they can continue providing services. Read more

Council: Covid-19: More flexibility for deploying EU budget money

The Council of the EU has published a statement calling for more flexibility while deploying EU budget money. Member states will be able, for the period between 1 July 2020 and 30 June 2021, to request 100% financial support from the EU budget. Read more

European Parliament: More ambition needed for recovery instruments

Days after Eurogroup proposals for mitigating the economic crisis due to Covid-19 and ahead of the European Council, MEPs met with Eurogroup President Mario Centeno. Read more

ECB: Why we all need a joint European fiscal response

A strong, symmetric fiscal response that offsets the economic damage from the pandemic is in the economic interest of all countries in the euro area, Executive Board member Fabio Panetta writes in Politico. Read more

FSB consults on effective practices for cyber incident response

The Financial Stability Board (FSB) published a consultation report on Effective Practices for Cyber Incident Response and Recovery, which was sent to G20 Finance Ministers and Central Bank Governors for their virtual meeting on 15 April. Read more

Banking in a Digital World: Drivers and Trends

BANKING ESSENTIALS WEBINAR

TUESDAY 19 MAY 15:30

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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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