The chairmen of the three European Financial Supervisory Authorities (ESAs) took stock of their handling of the Covid-19 crisis on Monday 12 October with MEPs from the European Parliament’s Committee on Economic and Monetary Affairs (ECON).
“The year 2020 has certainly been a year of challenges and adjustments”, acknowledged the President of the European Banking Authority (EBA), José Manuel Campa. Between March and June, 11 additional extraordinary meetings of the Joint ESA Committee – which he chairs – were held to discuss the effects of the Covid-19 pandemic on financial markets.
“The EU banking sector has shown resilience so far, but challenges remain”, in the words of Mr Campa. Banks with lower capital levels or riskier exposures could face difficulties. The bank stress test, which has been rescheduled to 2021 (see EUROPE 12540/4), will play an important role in the assessment of these banks, he said. In addition, it will be necessary, according to him, to prepare for an increase in non-performing loans, already visible through the latest data available to the EBA for the second half of the year.
The EBA has taken several measures to mitigate the effects of the crisis on the banking sector, including guidance on dividend payments, as well as on moratoria on loan repayments (see EUROPE 12461/14), he recalled.
Asked by MEP Luis Garicano (Renew Europe, Spain) about the possible negative consequences of ending moratoria on loan repayments, Mr Campa said that banks had sufficiently demonstrated their operational resilience during the crisis and could now manage their clients’ accounts effectively.
For her part, French MEP Stéphanie Yon-Courtin (Renew Europe) asked the Chairman of the European Insurance and Occupational Pensions Authority (EIOPA), Gabriel Bernardino, what he intends to do to ensure that insurers really play a role as a partner for SMEs during the crisis.
“The EIOPA was very clear from the beginning that insurers should pay promptly for claims incurred during the pandemic”, Mr Bernardino said. According to him, the crisis has acutely demonstrated that insurance conditions in some countries were unclear, which is why many disputes are now ongoing.
In a concept paper published last July, EIOPA detailed several options for developing “common resilience solutions” for pandemic risk (see EUROPE 12537/6), he said.
‘Wirecard’ and ‘'FinCEN files’ scandals
The ESA chairpersons did not escape questions from MEPs on recent scandals, such as the one involving the German payment service provider ‘Wirecard’ (see EUROPE 12312/15).
Sven Giegold (Greens/EFA, Germany) asked the Chairman of the European Securities and Markets Authority (ESMA), Steven Maijoor, when ESMA was informed of the problems linked to this scandal.
ESMA was first informed at the time of the Wirecard short selling bans in early 2019, Mr Maijoor said. At the time, however, ESMA’s role was simply to review the information provided by the German regulator, BaFin, and examine the justifications for such a ban, he said.
To German MEP Gunnar Beck (ID), he assured that the peer review currently being prepared on this case (see EUROPE 12528/4) would be ready by the end of the month and that it would look into the independence of the German regulator.
Pedro Marques (S&D, Portugal) questioned the EBA on another scandal, namely the “FinCEN files”, which revealed that at least $2 trillion in “dirty money”, had transited through the world’s largest banks between 2000 and 2017 (see EUROPE 12564/11).
Mr Campa acknowledged the need to strengthen the European anti-money laundering framework, including coordination among national authorities, but also among national financial intelligence units. (Original version in French by Marion Fontana)