Out of control national debt in the United States hangs over the market like a sword of Damocles

20 September 2023
Knowledge Base

by Michel Klompmaker

We recently spoke with Twan Houben about the possible impact of the enormously increased national debt in the United States. Twan Houben is concerned with crisis management, hence his special interest in the phenomenon of national debt on the other side of the Ocean. Then what’s going on? According to Marketwatch, the national debt there currently amounts to 33 trillion US dollars. To put that number into perspective, three years ago that was 23 trillion US dollars. It is not rocket science to calculate that with the increased interest rates in the last period, serious problems can arise if new loans have to be taken out to finance the national debt. But what are the consequences in Europe? Continue reading…

Following the expiry of the restrictive measures on Ukrainian exports of grain and other foodstuff to the EU, Ukraine agrees to introduce measures to avoid a renewed surge in EU imports

19 September 2023

The European Commission has analysed the data related to the impact of the exports of 4 categories of agricultural products on the EU market. It has concluded that thanks to the work of the Coordination Platform and to the temporary measures introduced on 2 May 2023, the market distortions in the 5 Member States bordering Ukraine have disappeared. A constructive attitude of all participants in the platform helped to solve concrete problems and ensured that exports to third countries outside the EU are flowing and even increasing. Continue reading…

Neil Esho: Stick to the Core Principles

18 September 2023
Knowledge Base

On 13 September, Neil Esho, Secretary General of the Basel Committee on Banking Supervision, at the Eurofi Financial Forum 2023, Santiago de Compostela. When asked how he went bankrupt, Mike Campbell, a Scottish war veteran who features in Hemingway’s novel, The Sun Also Rises, responded: “two ways: gradually and then suddenly”. This description of financial failure – clearly not new – is also an apt description that sums up many an episode of banking distress. This includes the failure of a number of US regional banks earlier this year, and the merger of two large Swiss G-SIBs. Continue reading…

FCA sets expectations ahead of incoming crypto marketing rules

15 September 2023

Tough new rules designed to make the marketing of cryptoasset products clearer and more accurate, and that ban incentives like ‘refer a friend’ bonuses, will come into force on 8 October. The FCA has signalled that in response to industry readiness it will consider giving cryptoasset firms more time to implement certain changes, for instance a 24-hour cooling off period. Firms could be given until 8 January 2024 to introduce features that require greater technical development, with the core rules still coming into effect from 8 October 2023.  

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ESMA sees prevailing market uncertainty as downside risks rise

14 September 2023
Knowledge Base

The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has recently published the second Trends, Risks and Vulnerabilities (TRV) Report of 2023. ESMA sees that financial markets are adapting to the new economic environment of durably higher inflation and interest rates, however risks remain high in ESMA’s remit. Markets are set to remain very sensitive to potential deteriorations in economic fundamentals or risks in the financial sector. Continue reading…

Taxation: new proposals to simplify tax rules and reduce compliance costs for cross-border businesses

13 September 2023
Knowledge Base

Yesterday, the European Commission adopted a key package of initiatives to reduce tax compliance costs for large, cross-border businesses in the European Union. The proposal, called “Business in Europe: Framework for Income Taxation” (BEFIT), will make life easier for both businesses and tax authorities by introducing a new, single set of rules to determine the tax base of groups of companies. This will reduce compliance costs for large businesses who operate in more than one Member State and make it easier for national tax authorities to determine which taxes are rightly due. The new, simpler rules could reduce tax compliance costs for businesses operating in the EU by up to 65%. Continue reading…

Central banks at the crossroads

12 September 2023
Knowledge Base

by Luiz Pereira da Silva,

Central banks, and central bankers, stand at a crossroads. They face not one, but five major forks in the road. In line with their mandate and in addition to their known achievements, central banks, in the 21st century need to reflect carefully on how the new challenges could affect their role. I will list five of these forks: (1) the re-emergence of inflation; (2) climate change; (3) inequality; (4) digital financial innovation; and (5) artificial intelligence. As you know, modern central banks have been successful because they have been capable of strengthening their analytical thinking when facing challenges in the past, balancing risks properly and choosing the best path, even if that path looked challenging. Now, the many consequential issues that we face imply that central banks will have to carefully identify and analyse the paths they mean to tread. Continue reading…

FSB and IMF outline comprehensive approach to identify and respond to macroeconomic risks associated with cryptoassets

11 September 2023

The Financial Stability Board (FSB) and International Monetary Fund (IMF) have recently published a report outlining a comprehensive policy and regulatory response to cryptoasset activities. The report synthesises the IMF’s and FSB’s policy recommendations and standards. It illustrates macroeconomic and financial stability implications of cryptoasset activities, how they may interact, and how the IMF and FSB’s policy recommendations fit together. The report also encourages implementation of the Financial Action Task Force (FATF) anti-money laundering and counter-terrorist financing (AML/CFT) standards to address risks to financial integrity and mitigate criminal and terrorist misuse of the cryptoassets sector. Continue reading…

The UK’s association to Horizon Europe and Copernicus

08 September 2023

Yesterday, the European Commission and the UK Government have concluded negotiations and reached an agreement in principle on the association of the UK to Horizon Europe and Copernicus under the Trade and Cooperation Agreement. This is a landmark moment for scientific and space collaboration between the EU and the UK following agreement of the Windsor Framework earlier this year. Association to Horizon Europe will further strengthen and deepen links between the scientific communities in the UK and the EU, foster innovation and enable researchers to work together on global challenges from climate to health. The UK Government and the European Commission look forward to enabling collaboration between their researchers in which the UK and the EU share a mutual interest, such as in new and emerging technologies. To this end, the EU will assess UK participants’ access to strategic parts of the Horizon Europe programme[*1] on equal terms with other associated countries.
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FCA analysis reveals there are fewer than 1 million interest-only mortgages outstanding

07 September 2023

The number of interest-only (750,000) and part-interest-only (245,000) mortgages has halved since 2015, new FCA analysis has found. The fall is a result of borrowers moving in greater numbers onto repayment loans or repaying earlier than expected. Of those remaining, the greatest number of interest-only mortgages are set to mature in 2031 (72,000) and 2032 (77,000), with a smaller peak in 2027. This means borrowers without a repayment plan still have time to act and reduce at least some of their outstanding capital by the end of their mortgage.  Continue reading…