by Ida Wolden Bache

The Norwegian economy had recovered after the sharp downturn during the pandemic. High energy prices and a sharp rise in international goods prices had driven up consumer price inflation to a level markedly above the inflation target. Economic activity was strong, and job vacancies were high. Norges Bank expected rising wage growth and higher imported goods inflation to push up inflation through the year, and overall price inflation was projected to be 3.4 percent in 2022. The policy rate was projected to rise towards 2 percent over spring 2023. These forecasts were less than accurate. The policy rate has been raised faster and more than projected in March 2022. The policy rate was raised in response to a considerably faster rise in inflation than projected. Norges Bank’s task is to keep inflation low and stable. The operational target is inflation of close to 2 percent over time. Inflation targeting shall be forward-looking and flexible so that monetary policy can also contribute to high and stable output and employment and to countering the build-up of financial imbalances. High inflation is costly for society. It increases uncertainty about future inflation and makes economic planning difficult. Uncertainty can also lead to a situation where investment projects with longer horizons must give way to investment projects with shorter horizons. Rapid and unexpected price increases hit low-income households with the smallest margins hardest.
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The finish line for US dollar (USD) LIBOR transition at end-June 2023 is now less than three months away. There has been significant progress made to date, and market participants must continue to act in order to ensure an orderly transition and to support the foundations necessary for a sustainable and stable financial system going forward. Given the limited time ahead, the FSB stresses that it is critical that market participants act expeditiously to ensure that their legacy contracts are prepared to transition by end-June 2023. Continue reading…

Our brand new and upcoming Summer School in Amsterdam is a unique training organised by Risk & Compliance Platform Europe on Compliance Management and Regaining Trust. You will meet international professionals coming from the countries that are covered by Risk & Compliance Platform Europe (mainly Europe), and have the opportunity to share best practices, brainstorm ideas, learn new methodologies, and directly apply new tools to practical exercises. This two-day summer course will take place in the city of Amsterdam and is open to anyone who has the right education and experience, mainly Directors, Compliance Officers / Managers, Senior Risk & Compliance Professionals and Lawyers. The lecturers have a wide array of professional experience in their dedicated field, with courses including practical workshops and theory. Continue reading…

by Fabio Accardi

In the first part of the book “Risk and Control Governance” [*1] I have highlighted, also with simple examples, how the theme of risk management pertains, in the first place, to our personal dimension. Indeed, in daily choices, if we want to face a decision that concerns us, we always need to make assessments that relate to the probability of running into some events or not. Of course, this relates to decisions that have an impact on the environment and the social context in which we live. The principles and values that guide our conduct constitute the foundations of our “culture of risk”. This can eventually condition the creation of value for the areas that interest us most directly. In terms of environment, the terms “nimby” (not in my backyard) and “pimby” (please in my backyard) are now widely applied. We cannot assess in advance whether a certain type of behavior attributable to these two patterns leads or not to value creation for us and for others. In any case, our choices are not always guided (only) by rationality and compensated by adequate returns or personal advantages. It is known, for example, that the phenomenon of illegal landfills of materials harmful to health, as well as a serious violation of the rules with the subsequent risks of sanctions also constitutes a serious damage to people and the environment. Yet, willing people have allowed them to be built not far from their homes, demonstrating a poor perception of the risks to which they are exposed. In order to obtain easy immediate profits, in fact, the consequences that these landfills have on them and their families are not evaluated. Similarly, if we have a large garden, we can agree on the benefits that can derive to us and our neighbors from the installation of solar panels, but we oppose because we do not renounce to sacrifice a portion of space to devote to these installations.
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The RBI and the BIS have on 4 May jointly launched the fourth edition of the G20 TechSprint Initiative, a global technology competition to promote innovative solutions aimed at improving cross-border payments, under India’s G20 presidency. Following the success of the three previous competitions in the areas of regulatory compliance (regtech) and supervision (suptech), green and sustainable finance, and central bank digital currencies (CBDCs), the 2023 TechSprint will focus on three problem statements on cross-border payments, as formulated by the RBI and the BIS Innovation Hub. Continue reading…

by Sandra Švaljek

In recent years, we have seen many negative global developments, such as lockdowns, restrictions, supply chain bottlenecks, aggression in Ukraine, oil price shock and sanctions. On the positive side, technology is constantly changing and evolving, revolutionising how we live and work owing to pronounced advancements in computing power, AI and machine learning, 5G technology and cloud computing. It all profoundly affects how we perceive money. So, the name of this conference  precisely depicts the evolving and shape-shifting nature of money due to these developments. While the diffusion of technologies is accelerating as well, it is precisely in the area of payments where it is the most rapid. We are still determining what this will bring and which form the money will eventually take. Are we going to see the decline in the dominance of one global currency and its replacement by a new one or the formation of an alliance between currencies? Will it be the dominance of technology companies in providing payment services to the general public?
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Yesterday, the Commission has taken decisive action to fight corruption in the EU and worldwide, delivering on the commitment made by President von der Leyen in her 2022 State of the Union address. The anti-corruption proposals presented yesterday represent a milestone in the fight against corruption at national and EU level. The Commission will step up its action: building on measures in place, strengthening efforts to integrate the prevention of corruption into the design of EU policies and programmes, and actively supporting Member States’ work to put in place strong anti-corruption policies and legislation. Through its annual Rule of Law Report cycle, the Commission also monitors anti-corruption developments at national level, identifies challenges and issues of recommendations to Member states.
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Judicial and law enforcement authorities in Germany, Estonia and Latvia have carried out a coordinated action against an organised crime group suspected of defrauding thousands of German companies. During a joint action day in all three countries, three suspects were arrested and 17 places searched. Investigators seized cash, illegal drugs and additional pieces of evidence. Moreover, over 300 bank accounts were frozen.

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by Pablo Hernández de Cos

In many ways, the recent banking turmoil was the first “real” stress test of the banking system (or at least parts of it) since the Great Financial Crisis; as the banking system benefited from the huge scale of public support measures during the Covid-19 pandemic. We can take some comfort that the significant increase in financial resilience, due in large part to the Basel III reforms, has served to safeguard the stability of the global banking system. But we should also recognise that, once again, significant public sector intervention was needed to avoid potentially adverse spillovers to other banks, non-bank financial intermediation (NBFI) entities, and ultimately the real economy. With that in mind, we need to remain focused on assessing and mitigating the risks and vulnerabilities affecting the global banking system. These include elevated debt levels and stretched asset valuations, geopolitical developments, complex and opaque bank interconnections with NBFI entities, and continued uncertainty with regard to economic growth, inflation and interest rate dynamics. Continue reading…

On 28 December 2022, Luxembourg submitted to the Commission a request for the disbursement of €20.2 million under the Recovery and Resilience Facility (RRF). The request was based on the achievement of the 26 milestones and targets for the first instalment, as outlined in the Council Implementing Decision approving the plan. This includes the entry into force of the “Housing Pact 2.0” reform aimed at increasing the supply of affordable rental housing offered by municipalities, as well as the digitalisation of the public sector with the development of the “MyGuichet.lu” mobile application. It also covers green mobility measures with, for instance, the implementation of a legal framework setting a minimum percentage of clean vehicles in public procurement contracts. The milestones and targets also confirm progress towards the completion of investment projects related to ultra-secure communication with the Luxembourg Quantum Communication Infrastructure Laboratory, the upskilling of the workforce with the launch of the “FutureSkills” programme, and the digitalisation of health.
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