Lunchtime events
International Financial Reporting Standards (IFRS) 9, issued by the International Accounting Standards Board (IASB) on 24 July 2014 and came into effect on 3 January 2018, addresses multiple aspects of accounting for financial instruments, namely classification and measurement, impairment of financial assets and general hedge accounting. The objective is to establish common and harmonised principles for the reporting of financial assets and financial liabilities.
In the aftermath of the financial crisis, banks have accumulated about a trillion euro of non-performing loans (NPLs) in their balance sheets. The high levels of NPLs in countries such as Italy, Greece and Portugal constrain their banks’ lending abilities, which causes delays in the countries’ economic recovery.
The Capital Markets Union (CMU) Action Plan set out a programme of actions aiming at overcoming information barriers that prevent SMEs and prospective investors from identifying new opportunities to secure funding and to make investments, respectively.
- Strengthening the feedback given by banks when turning down credit applications from SMEs, in order to allow rejected SMEs to adjust their business model to have better access to external funding;
- Mapping local or national support and advisory structures across the EU to promote best practices in assisting SMEs; and
- Investigating how to develop or support pan-European information systems that link up national systems to bring finance-seeking SMEs together with finance providers
From a historical perspective, interest rates have been on a downward trend over the past four decades. In Europe, the financial and sovereign debt crises and the ensuing weak macroeconomic environment – persistent output gap, low growth and excessively low inflation – together with the expansionary monetary policy responses, in particular QE, have contributed to a further decline in interest rates.
Financial market infrastructures (FMIs) are the backbone of the financial system: they enable market participants to transact with one another in an efficient manner. FMIs are inherently systemic, as their very names imply: payments systems, central securities depositories (CSDs), securities settlement systems (SSSs), central counterparties (CCPs) and trade repositories (TRs).
In the context of the capital markets union plan, the European Commission proposed an initiative to re-launch securitisation, with harmonised rules across the EU for a subset of standardised offerings, and with CRR amendments to adjust capital charges to provide for a more risk-sensitive treatment for such instruments.
After a year-long exercise with a wide group of stakeholders, including academics, policy-makers and industry experts, CEPS and ECMI will launch the final report of the European Capital Markets Expert Group (ECMEG): Europe's Untapped Capital Market: Rethinking Integration After the Great Financial Crisis.
The event started with a presentation of the main findings of the recently published PwC’s Global financial markets liquidity study, which reviewed liquidity trends and prospects across a broad range of asset classes and international markets. This was followed by a panel discussion and Q&A session. Please find below details about the event.