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Central bank independence against the background of higher interest rates and financial stability: ceteris paribus or mutatis mutandis ?

24 February 2024
Knowledge Base

by Olaf Sleijpen

One of the more fascinating concepts covered in economics courses is ‘ceteris paribus’ – Latin for ‘all other things being equal’. This concept allows us to investigate the causal and independent relationship between two variables, while all other variables remain unchanged. For instance, the relationship between interest rates and inflation. And so, ‘ceteris paribus’ offers a very simplified way to illustrate the core workings of a central bank. Or in central bank Latin, all other things considered equal, raising interest rates will lower inflation. And so, in theory, it is pretty straightforward how our primary policy tool helps to reach our primary objective – an inflation rate of around two percent in the medium term. This kind of central bank independence – the ‘ceteris paribus’ kind – does not exist outside the realm of theory, of course. The real world – the world central banks actually work in – is instead characterised by ‘mutatis mutandis’. Meaning that changing one variable will affect several others, and not per se only the one you wanted to affect. And meaning that this works both ways. And with a multitude of variables simultaneously. Hence, to achieve our primary objective, we are dependent on an ever-changing world. Sometimes things go well. At other times, risks arise that we need to carefully monitor. Continue reading…

Political agreement on a new economic governance framework fit for the future

13 February 2024
Knowledge Base

The Commission welcomes the agreement between the European Parliament and the Council on the most ambitious and comprehensive reform of the EU’s economic governance framework since the aftermath of the economic and financial crisis. The Commission presented its reform proposals in April 2023. The main objectives of the framework are to strengthen Member States’ debt sustainability, and promote sustainable and inclusive growth in all Member States through growth-enhancing reforms and priority investments. The framework will help make the EU more competitive and better prepared for future challenges by supporting progress towards a green, digital, inclusive and resilient economy. The reforms address shortcomings in the current framework. They seek to ensure that the framework is simpler, more transparent and effective, with greater national ownership and better enforcement. They take into account the need to reduce increased public debt levels, including as a result of the COVID-19 pandemic, in a realistic, gradual and sustained manner. The new framework also builds on the lessons learned from the EU policy response to the financial crisis where a lack of investment hampered a swift economic recovery.
Continue reading…

Judgment on appeal postponed for tenth time, but Reggie de Jong keeps faith in good outcome

09 February 2024
Knowledge Base

by Michel Klompmaker

The appeal judgment between De Jong et al. v. Airbus – Deutsche Bank – Deutsche Börse – Clearstream and InsingerGilissen (part of Quintet Private Bank) known as case number 200,289,627/01, was postponed for the tenth time. The appeal hearing took place on May 18, 2022 and the new roll date for the judgment is now set for April 2, 2024. Now that the second anniversary is over and there is still no judgment, there are question marks as to why there is yet again a postponement, now for the tenth time. We spoke with concerned Reggie de Jong, former swimming champion, wherein she made the comparison between her swimming career and this fraud case. Continue reading…

Ajay Katara

Ajay Katara

Consulting Partner and Head the RegTech Portfolio in Banking Risk Management area at Tata Consultancy Services (TCS)

Unraveling Risk and Compliance Trends in 2024

07 February 2024
Knowledge Base

Over the last few years, risk and compliance function has been a top priority for many banks and financial services organisations, with initiatives spanning across adoption of newer regulatory compliances, stress testing, model risk management, and focus on emerging risks like climate risk, to name a few. Come 2024, as per industry reports, the spend in risk and compliance is expected to grow by 14% in 2024 with the spotlight around heightened regulatory scrutiny, newer regulatory initiatives, and technological adoptions to drive optimisation and efficiencies within the function which will eventually help to meet the business demands and expectations for 2024 and beyond. Continue reading…

15 arrested for arranging 133 sham marriages in Cyprus

06 February 2024
Knowledge Base

Judicial and law enforcement authorities in Cyprus, Portugal and Latvia have dismantled a criminal network suspected of organising 133 sham marriages in Cyprus to facilitate illegal immigration into the European Union. During a joint action day carried out on 29 January, 15 suspects were arrested: 13 in Cyprus, one in Latvia and one in Portugal. According to the investigations, the criminal network was also involved in human trafficking and money laundering activities, as well as forcing victims into bogus marriages for immigration purposes. Continue reading…

Compliance Resilience

31 January 2024
Knowledge Base

by Alessandro Cerboni

Organisations are complex dynamic systems and for these it is necessary to strengthen Compliance Resilience. When we talk about interactions between agents (people) of a complex system such as an organisation, we most commonly refer to concepts of complex systems theory or simulation systems, which are disciplines created to study and move in complex dynamic systems. Complex systems theory studies the structure and behaviour of systems composed of many interacting parts. Continue reading…

45+ Stats About Big Tech’s Carbon Footprint (Part 2)

29 January 2024
Knowledge Base

by Tom Read

In the first part of the article that was published recently (see the related items section), Tom took a close look at 23 stats on big tech’s carbon footprint. He did so by first providing an overview of Tech’s Co2 emissions. He then talked about some stats about the best and worst among the Tech industry and consumer electronics. In this second part, he will take closer look at consumer media, search engines and artificial intelligence, emissions in FinTech and e-commerce, and the road to lower emissions.  Continue reading…

45+ Stats About Big Tech’s Carbon Footprint (Part 1)

22 January 2024
Knowledge Base

by Tom Read

Since the beginning of the Industrial Revolution in the 18th century, the world has increasingly relied on technologies that emit greenhouse gasses. In the 20th century, economies shifted away from mechanical technologies and toward digital technologies that permeate nearly every industry and aspect of life. This large-scale adoption has caused greenhouse gas emissions to increase exponentially. These gasses have dangerously altered the Earth’s atmosphere, causing global temperatures to rise an average of more than 1C, and sea levels to rise 8-9 inches (21-24 cm). Continue reading…

The Inevitable Human Rights Anchor for Compliance Professionals in Finance

18 January 2024
Knowledge Base

by Simon Lelieveldt

We live in challenging times. A range of natural, macro-economic, technical and geopolitical factors influence the world we are living in. These developments shaped prior laws and the behaviour of regulators, supervisors and private companies and will continue to do so. Somewhere along the line, we can see a board member with the task to ensure adherence to law. He or she is responsible for compliance and has a range of compliance managers, advisors, business lines and experts available to help out. Continue reading…

EU banks’ liquidity coverage ratio declined but remains well above the minimum requirement

17 January 2024

The European Banking Authority (EBA) has published its report on liquidity measures, which monitors and evaluates the liquidity coverage requirements currently in place in the EU. Between June 2022 and June 2023, the EU banks’ liquidity coverage ratio (LCR) declined but remained comfortably above the minimum requirement. However, within this review period there were important fluctuations in the components of the ratio, driven mostly by changes in the banks’ allocation of funding deposits and the ongoing reduction of central bank liquidity. Unlike the LCR in domestic currency, EU banks’ LCR in foreign currencies remained below 100%.  Continue reading…