Pesquisar
How have European banks developed along different dimensions of international competitiveness?
This study analyses why European banks, despite improved cost efficiency, continue to trade at lower valuations than their United States (US) counterparts. The gap stems from limited growth potential due to market fragmentation and underdeveloped capital markets. To close this competitiveness divide, the study calls for accelerating the Savings and Investment Union (SIU), expanding investment banking capacity, and implementing smart banking regulation and supervision that reinforces market discipline ...
How have European banks developed along different dimensions of international competitiveness?
This paper provides an assessment of the EU banks’ competitiveness by using the US as a benchmark and looking at four interconnected dimensions: profitability, stability, ability to supply intermediation services and raise funds, product affordability for customers. Our results show that profitability, while being a key performance indicator in a market economy, does not measure the banks’ contribution to welfare more broadly and may even signal excessive market power.
Assessing real estate risks and vulnerabilities. Hidden cracks in the financial system?
This paper reviews a recent data on property markets and real estate-related bank loans in the euro area, looking at prices, mortgages, credit quality measures and some indicators of the costs faced by borrowers. It then takes a closer look at certain origination and monitoring practices adopted by significant institutions, as recently analysed by the ECB, which apparently show some room for improvement. Finally, it addresses property-related exposures held by non-bank financial institutions, with ...
Assessing real estate risks and vulnerabilities: Hidden cracks in the financial system?
The European financial system faces significant risks from excessive bank lending to the real estate sector. Historical trends show a strong link between real estate credit booms and banking crises. Current data indicate that real estate loans constitute a substantial share of banks' corporate loan portfolios, with varying risk levels across countries. Key drivers include expansionary ECB policies and regulatory incentives favouring mortgage lending. Strengthening oversight, improving data collection ...
Invest EU Programme: functioning, performance and future challenges
InvestEU is the European Union’s flagship investment programme aimed at mobilising public and private financing to support sustainable infrastructure, innovation, SMEs, and social investment across the EU. As of June 2024, it has successfully mobilized around EUR 280 billion in investments using a EUR 26.2 billion guarantee, but faces concerns over guarantee depletion, excessive burdens and lack of transparency. The European Parliament plays a crucial oversight role, particularly in ensuring accountability ...
Legal bases in Article 122 TFEU: Tackling emergencies through executive acts
Article 122 of the Treaty on Functioning of the European Union (TFEU) provides for two legal bases, enabling the Council to adopt measures based on a European Commission proposal, without involving the European Parliament in any way. Article 122(1) addresses economic difficulties faced by Member States, and Article 122(2) specifically addresses financial assistance to Member States. It is understood that the Council may resort to Article 122 TFEU in exceptional circumstances. A recent example of ...
EU legislation and policies to address racial and ethnic discrimination
People from racial and ethnic minority backgrounds face discrimination and its consequences on a daily basis. However, the exact scale of the problem is hard to gauge, owing to a lack of data and general under reporting of racist incidents. Although the European Union (EU) has been introducing legislation to combat racial and xenophobic discrimination since 2000, the problem persists. The global Black Lives Matter protests highlighted the need for new measures, while the COVID 19 pandemic saw a major ...
Euro exchange rate policy in the face of currency coercion threats
This paper outlines the European Union’s institutional framework for defining and executing an active euro exchange rate policy, against the backdrop of a potential policy shift by the United States. It outlines the emerging US debate on linking exchange rate policy with trade and security objectives and provides a background on past currency interventions by US and other central banks such as the Plaza Accord. The final part opens a discussion over the functioning and limits of the EU’s legal framework ...
Clean trade and investment partnerships: A new instrument in the EU's trade policy toolbox
The European Commission has announced a range of new trade partnerships – the clean trade and investment partnerships (CTIPs) – to bolster the EU's competitiveness, diversify supply chains and boost economies. CTIPs are the latest instrument in the EU's set of trade tools the Commission calls 'alternative forms of engagement', and to which experts also refer as 'trade-related agreements' or 'mini trade deals'. They are meant to complement the EU's vast network of trade agreements through a faster ...
State of play: EU support to Ukraine - Payments, reform and investment, use of immobilised Russian assets
Since the start of Russia's full-scale war of aggression against Ukraine in February 2022, the European Union has provided Ukraine with financial, military and humanitarian support on an unprecedented level. To date, the support to Ukraine from 'Team Europe' – comprising the EU and its Member States – amounts to €143 billion. This support includes macro-financial assistance, financial support through the Ukraine Facility, humanitarian aid and military assistance from Member States and through the ...