WSBI-ESBG Managing Director: Retail Investment Strategy, an advancement but still missing critical aspects
On 29 June 2023, a public hearing on the Retail Investment Strategy took place in the ECON Committee in which WSBI-ESBG Managing Director Peter Simon was invited to provide input to the debate.
To refresh our memories; on 24 May 2023, the Commission adopted in the framework of its Retail Investment Strategy a proposal on retail investor protection rules and a second proposal modernising the PRIIPs key information document. During the public hearing, Peter Simon, along with other experts Verena Ross (ESMA), Barbara Alemanni (Bocconi), and Agustín Reyna (BEUC), had the chance to publicly confront with ECON members, European authorities, and many stakeholders on this very important legislative proposal.
Mr. Simon acknowledged that the proposal does not have that “potential disruptive impact” that it would have had with a full ban on inducement.
Many aspects are surely positive and will be supported by the savings banks, meanwhile a few aspects are very critical and must be deeply reconsidered during the legislative process.
Providing a large number of sound data and information during his speech, he recalled that the core business of saving banks is to serve the customers to the best of their ability in order to have clients financially grow and society improve.
That’s why – either on site or online – banks have always engaged with investors throughout a relevant number of well-equipped tools, facilities and sound professionals which deserve fair recognition and proper remuneration.
To this end, he criticised the European Commission’s intention of banning inducements for the “non-advised transactions”, where a client places an order not based on a bank recommendation but profits from existing bank resources and services. He stressed that a ban of inducement for this is not only counterproductive but will leave more people either financially unserved or in the hand of uncontrolled “tiktok-advisors”.
Peter Simon encouraged the Members of the European Parliament to improve the legislative proposals in paramount topics: Ensuring remuneration for non-advised transactions, installing a realistic transposition timeframe, and questioning the proposed benchmarking exercise as it is counterproductive for the envisaged aim to ensure “value for money”, undermining competition and innovation.
Furthermore he appealed the Parliamentarians to stay in the driver`s seat as the current legislative proposal outsources this highly political issue totally to undisclosed so called “Level 2” measures where the influence from the European Parliament and Council is very limited.
As Peter Simon effectively remarked, focusing only on the price characteristics of financial products disregarding many other qualitative aspects is regularly not in the customer’s best interest, given that the cheapest option is mostly not the best one for the client and not closest to his needs.
Concluding his remarks, Peter Simon reiterated that his message does not come from banks aiming to charge consumers in unappropriated way since the aim of the European Savings and Retail Banking Group family, is to serve their clients to their best interest by leaving nobody behind and being dedicated to let their clients financially grow.
Your Contact:
Ines Scacchi, Principal Advisor
e.: ines.scacchi@wsbi-esbg.org
t.: +32 2 2111147
ESBG submits its response to the consultation launched by EFRAG on its Draft Comment Letter
On 29 June, ESBG submitted its response to the consultation launched by EFRAG on its Draft Comment Letter (DCL) on the IASB’s Exposure Draft (ED) on Amendments to the Classification and Measurement of Financial Instruments (Proposed amendments to IFRS 9 and IFRS 7).
The proposed amendments are a direct response to the feedback gathered from a post-implementation review of the classification and measurement requirements in IFRS 9 and include clarifications on the classification of financial assets with environmental, social and corporate governance (ESG) and similar features as well as on the Settlement of liabilities through electronic payment systems, among others. Additionally, the ED suggests introducing revisions and additions to the disclosure requirements stated in IFRS 7.
ESBG’s response concentrates on 5 different pillars :
• Classification of financial assets – contractual terms that are consistent with a basic lending arrangement
• Disclosures – contractual terms that could change the timing or amount of contractual cash flows
• Derecognition of a financial liability settled through electronic transfer
• Classification of financial assets – financial assets with non-recourse features
• Disclosures – investments in equity instruments designated at fair value through other comprehensive income
ESBG’s first reactions on EU single currency package, open finance and payments as published today
The ESBG appreciates the potential transformative impact of these proposals on the resilience and competitiveness of the payments sector and the financial landscape. ESBG underlines that further discussions are required to tailor these proposals to the benefit of all stakeholders. Diligent considerations in the discussions ahead will be crucial to let the legislative acts succeed in fostering the European payments area.
Brussels, 28 June 2023 – The European Savings and Retail Banking Group (ESBG) acknowledges with keen interest the long awaited four legislative initiatives of the European Commission published today in the single currency package. The said package includes notably i) the proposed Regulations on the Digital Euro, ii) the Legal Tender of Euro Banknotes and Coins, iii) on open finance and payments, consisting of the Financial Data Access Regulation and iv) the revision of the EU rules on payments services.
The ESBG appreciates the potential transformative impact of these proposals on the resilience and competitiveness of the payments sector and the financial landscape, and underlines that further discussions are required to tailor these proposals to the benefit of all stakeholders. Diligent considerations in the discussions ahead will be crucial to let the legislative acts succeed in fostering the European payments area.
“At ESBG, we have been engaging in the development of a digital euro via various stakeholder groups of the European Central Bank (ECB) throughout the whole investigation phase ever since it was launched in 2021”, Sofia Lindh Possne, Head of Group Regulatory Affairs – Group Brand Communications and Sustainability at Swedbank and Chairperson of the ESBG Task Force on Central Bank Digital Currencies, says. “A ground-breaking innovative project like the digital euro requires a prudent approach to maintain the financial stability of banks and to ensure a level playing field in the European payments market.” she adds.
The third Payment Services Directive (PSD3) and the first Payment Services Regulation (PSR), which foresee changes to the foundational framework of the European payments market, are part of another significant and landmark set of proposals. According to Fabrice Denèle, Senior Vice President Payments Partnerships at BPCE Payments and Chairperson of the ESBG Payments Committee, the revised provisions of the PSD2 imply a huge potential to improve the overall situation of payments in Europe: “A sound liability framework for fraud cases will be vital for both customers and banks.
The PSD3 and the PSR have the chance to provide a coherent set of rules for this”. At the same time, the new acts should contribute to a fair competition in Europe: “The same rules must apply to all actors with the same entitlements”, Denèle states.
Another legislative proposal published today concerns the legal tender status of euro banknotes and coins. ESBG welcomes the clarity provided and recognises the role of cash even in an environment that tends to become more digital. To this end, Diederik Bruggink, Head of the Payments, Digital Finance and Innovation department at ESBG, comments: “Cash still is vital for parts of the European population. However, the declining trend in usage of it poses challenges to both the acceptance of and the access to cash. The proposed Regulation is addressing both issues”.
As regards the proposed Financial Data Access Regulation (FIDAR), the Commission acknowledged the importance of a contract defining the sharing of costs and responsibilities, as well as the key factor of consumer trust; both elements ESBG stipulated in previous dialogues. Moreover, the authorisation and supervision of financial information service providers (FISPs) will support consumer protection and ensure a level playing field for data access.
However, some provisions, such as the required adherence to financial data sharing schemes, or the mandatory provision of permission dashboards, should certainly be reconsidered both in terms of content and deadlines as their simultaneous development could represent a challenge for stakeholders.
As the publication of the four initiatives mark the start of the legislative process in the Council and the European Parliament, Peter Simon, Managing Director of ESBG, is looking forward to the constructive discussions in the months ahead. “The changes proposed by the European Commission represent important steps that could impact some of the core activities of our members. We stand ready to contribute to the discussions and to ensure that the voices of the savings and retail banks in Europe are being heard.”
ESBG is hosting a dedicated ESBG Spotlight Special, dedicated to shed some light on these legislative initiatives from the European Commission. The day after the European Commission publishes these proposals, ESBG will put Jan Ceyssens, Head of Unit Digital Finance, and Eric Ducoulombier, Head of Unit Retail Financial Services, both from DG FISMA, in the “Spotlight”. The online event will take place on 29 June 2023, from 13:00 onwards, the day after the publication of these proposals. More information and a registration link can be found here.
YOUR CONTACT:
Diederik Bruggink
Head of Payments, Digital Finance and Innovation
diederik.bruggink@wsbi.esbg
Phone: +32 2 211 11 21
WSBI welcomes two new Latin American members
Two new Latin American members were welcomed to the WSBI’s global family on 22 June at an extraordinary General Assembly. The membership applications of BancoEstado, from Chile, and Banco Nacional de Crédito, from Venezuela, were approved with 63% of the WSBI members attending or represented at the hybrid meeting. The decision is effective from 1 July.
WSBI President, Mr. Isidro Fainé, welcomed the Assembly’s decision from an in-person gathering with several European members in Saint Jean de Luz, France, where the ESBG’s statutory meetings were taking place. Member representatives from Africa, Asia and Latin America joined online, including the Regional President for Latin America and the Caribbean, Mr. Diego Prieto. WSBI-ESBG Managing Director, Mr. Peter Simon, gave a presentation about the two new members, as he put their application for the Assembly’s consideration.
Founded in 1855 and chaired by Mr. Daniel Hojman, state-owned BancoEstado is a regional champion of financial inclusion and serves 82% of the Chilean banking customers.
Banco Nacional de Crédito, established in 2002, is Venezuela’s largest private bank. Its President, Mr. Jorge Nogueroles, became interested in joining the WSBI family as he attended the WSBI International Retail Banking Leaders Conference hosted by Mr. Prieto’s Banco Caja Social in Cartagena de Indias, Colombia, in March.
Contact person:
Leticia Lozano
Senior Advisor- International and Institutional Relations , The Americas and the Caribbean Region
e.: leticia.lozano@wsbi-esbg.org
t.: +32 2 211 11 96
European industry associations call for payments in the Digital Identity Regulation to be non-mandatory
The European Association of Co-operative Banks (EACB), the European Association of Payment Service Providers for Merchants (EPSM), the European Banking Federation (EBF), EuroCommerce, the European Savings and Retail Banking Group (ESBG), and Independent Retail Europe welcome the ambitions presented in the European Commission’s proposal for a European Digital Identity Regulation (eIDAS 2.0).
We believe that the proposal will incentivise Member States to be more expedient in developing e-ID solutions with a wide scope of usage. Moreover, the European Digital Identity Wallet (EUDIW) will foster quicker onboarding processes and a better user experience.
However, we caution that Recital 31 and Art. 12b.2 as adopted by the European Parliament and corresponding Art. 6db.2 of the Council’s General Approach are currently open to interpretation. The current wording seems to imply that the full payment sphere is included in eIDAS 2.0 on a mandatory basis.
We urge the European Parliament and the Council to re-consider their proposed wording during the last phase of the trilogue negotiations.
If widely used cards and payment processes were included in the new EUDIW Infrastructure on a mandatory basis, huge unplanned investments would be required not only in the financial sector and nearly all merchants in Europe, but also for global acceptance networks. This could possibly result in disproportionate costs for merchants and the payment ecosystem that accept card and account-to-account payments in accordance with the second Payment Services Directive (PSD2) and its successors.
To give an example, the current wording of Art. 12b2 leaves room for an interpretation that more than 15 million payment terminals in the European market and many payment pages of web shops need to be upgraded or exchanged by merchants and acquiring PSPs in addition to significant changes in the respective networks with multiple stakeholders. We believe that this cannot be the intention of the regulator and strongly recommend clarification.
In addition, removing from the scope of the Regulation the mandatory elements in relation to the full lifecycle of payments would also solve the general issue of liability banks and merchants would face. The proposal in its current form does not sufficiently address the question of liability, which impedes applying its provisions to payments. This is why the associations call upon the legislators to keep payment requirements non-mandatory in the Digital Identity Regulation.
We emphasise that in principle banks and merchants are not against also using the Digital Identity wallet for payments. The EUDIW could support payments if the common requirements of both the merchants and banking sector are met and (global) standards and processes are adapted, providing benefits for customers. However, we strongly recommend that the use of the EUDIW for the full payment cycle should be voluntary, allowing time to include it as part of normal planned terminal replacement cycles of usually 5-7 years.
The associations therefore call upon the co-legislators to adjust the wording of the legal text in such a way that the mandatory acceptance of the full lifecycle of payments is kept outside the scope of the Digital Identity Regulation.
List of signatories
European Association of Co-operative Banks (EACB) – eacb.coop
European Association of Payment Service Providers for Merchants (EPSM) – epsm.eu
European Banking Federation (EBF) – ebf.eu
EuroCommerce – eurocommerce.eu
European Savings and Retail Banking Group (ESBG) – wsbi-esbg.org
Independent Retail Europe – independentretaileurope.eu
Contact person:
Janine Barten- Advisor Digital Finance and Innovation
e.:janine.barten@wsbi-esbg.org
t.:+32 2 211 11 27
WSBI members get ESG update in first study visit
WSBI held its first ever study visit from 5 to 9 June with the title « Deep dive into sustainable finance: a study visit to leading banks and fintech in Germany ». WSBI was honoured to gather a group of 22 participants representing 12 banks from the WSBI global network who were kindly hosted by six German organizations in the cities of Bonn, Frankfurt and Berlin for presentations on different aspects of ESG implementation.
The five-day study visit commenced with a session centred on foundations and their various models. The host, Sparkassenstiftung für internationale Kooperation (Savings Banks Foundation for International Cooperation), which is a part of WSBI’s German member, DSGV, began by showcasing the Sparkasse model. The Managing Director of Sparkassenstiftung, Mr. Niclaus Bergmann, provided an overview of the numerous projects that the foundation has initiated worldwide to promote financial literacy, foster financial inclusion, and support the development of socially responsible banks globally.
The afternoon was dedicated to the 49th WSBI-ESBG Corporate Social Responsibility Committe meeting, Chaired by Mr. Roland Tassler, Head of EU Office of the Österreichischer Sparkassenverband. WSBI-ESBG Managing Director, Mr. Peter Simon, gave the welcome message and participated in the exchange. The discussion was further enriched by the contribution of Mr. Darween Doraisingam, Head of Transformation & Sustainability at Bank Simpanan Nasional (BSN), Malaysia.
The study visit then moved from the DSGV foundation’s headquarters in Bonn to Frankfurt, where participants had the opportunity to delve into the operations and sustainability initiatives of Deka Bank, Helaba, and WIBank. At Deka Bank, which serves as the central provider of asset management and capital market solutions for German savings banks, participants were introduced to the institution’s commitment to the preservation of artistic heritage, as well as its approach to sustainability and corporate governance.
At Helaba, a central organization within the savings banks group responsible for offering financial services to larger companies and institutional investors, attendees learned about its approach to sustainable financing and its ongoing transformation towards a more sustainable future.
The study visit then proceeded to its final destination in Berlin, where attendees had the opportunity to tour the offices of Raisin, a fintech startup, and learn about their innovative banking model, which allows investors to create fully customized ESG portfolios in line with their individual priorities and values.
In addition to the many enlightening meetings, the study visit also served as an opportunity for networking, fostering a robust community of ESG professionals, and experiencing Germany’s vibrant cultural offerings and visiting historical sites. WSBI sincerely thanks all the organizations who kindly hosted this study visit and the remarkable group of member representatives who made it an extraordinary experience.
With kind thanks to the exceptional participants of the study visit group (with alphabetical order)
| Colombia | Fundación Grupo Social and Banco Caja Social | Mr. Juan Carlos Gómez Villegas |
| Mr. Nicolás García Trujillo | ||
| Mr. Juan Francisco Sánchez Pérez | ||
| Mr. José Mauricio Cano Guzmán | ||
| Mr. Andrés Mauricio Nieto Bolívar | ||
| Cuba | Banco Popular de Ahorro | Ms. Patricia Buigas Mayor |
| Hungary | OTP Bank plc | Ms. Szilvia Gólya |
| Kenya | Kenya Post Office Savings Bank | Mr. Raphael Mingisian Lekolool |
| Malaysia | Bank Simpanan Nasional | Mr. Darween Doraisingam |
| Malta | Bank of Valletta | Mr. Ivan Gatt |
| Saudi Arabia | Social Development Bank | Mr. Faisal b.Bawazeer |
| Mr. Abdulmajeed A. Binrushaid | ||
| Senegal | PosteFinances | Mr. Abdoul Azizdiallo |
| Sweden | Sparbankernas Riksförbund | Ms. Caroline Wänglund |
| Tajikistan | Amonatbonk | Mr. Ikromi Sirojiddin Salom |
| Peru | Caja Huancayo | Mr. Eduardo A. Morales Ortiz |
| Caja Huancayo | Ms. Karina N. Huayta Anyosa | |
| Caja Huancayo | Mr. Manuel H. Isique Barrera | |
| Caja Huancayo | Mr. Felipe J. Atoche Castillo | |
| Caja Huancayo | Ms. Rosa M. Asca Cordano | |
| Caja Huancayo | Mr. César Quispialaya Córdova | |
| Zimbabwe | People’s Own Savings Bank | Mr. Wilbert Fungura |
ESBG sends recommendations on EBA’s consultation on draft Guidelines on the benchmarking of diversity practices
On 22 June, ESBG submitted its response to the consultation launched by the European Banking Authority (EBA) in April 2023 on draft Guidelines on the benchmarking of diversity practices, including diversity policies and gender pay gap under the Capital Requirements Directive (CRD) and the Investment Firms Directive (IFD).
The proposed guidelines are necessary to ensure a harmonised benchmarking of diversity practices, including the composition of the management body, diversity policies and the gender pay disparity at the level of the management body of institutions and investment firms.
By benchmarking diversity practices, regulatory bodies can effectively track changes in diversity patterns over time. This process also enables the identification of prevalent practices in this regard.
ESBG pointed out in its response that the EBA draft overlooks the specificity of each country. For example, in certain Member States like Germany, the local authority selects the management body members. In such cases, the institutions have no say in choosing the supervisory body members, which means they do not adhere to diversity guidelines for these individuals.
In addition, ESBG asked EBA to:
- replace a vague specification of the time frame (“in good time”);
- provide criteria for the sample of institutions and investment firms;
- specify the deadlines in certain circumstances; and
- provide more clarification in the section on the instructions for the calculation of the gender pay gap.
Besides, ESBG stressed that the distinction between the management body in its management function and the management body in its supervisory function (2-tier system) is not sufficiently clear. Also, ESBG raised its concerns over some annexes.
ESBG responds to EBA consultation on amendments to the reporting on the Fundamental Review of the Trading Book
On 21 June, ESBG submitted its response to the consultation launched by the European Banking Authority (EBA) in March 2023 on its draft Implementing Technical Standards (ITS) amending the ITS on specific reporting requirements on market risks (FRTB reporting).
The consultation paper sets out proposals to complement the already existing reporting requirements with a comprehensive set of information on the instruments and positions to which institutions apply related to the FRTB approaches.
The planned amendments will provide the supervisors with the necessary data to monitor institutions’ implementation of the FRTB approaches and their compliance with the own funds requirements for market risk.
ESBG’s response focused on the below headlines:
• Introduction of a materiality threshold for the reporting on offsetting group level
• High level of complexity with respect to A-SA reporting
• Need for clarity on definitions on “risk transfer” and “trading /banking book reclassification”
• Materiality threshold for reporting/obtaining regulatory permission to reclassify a transaction
• Cost of compliance with the reporting requirements
ESBG Spotlight: Payments, Digital Euro and Open Finance with Jan Ceyssens and Eric Ducoulombier
registrants to the event
400
participants in person
45
what registrants are saying about the event:
Watch here the record
See Photos
Please join us for an ESBG Spotlight Special dedicated to shed some light on some fresh payment related legislative initiatives from the European Commission. The day after the European Commission publishes these proposals, ESBG will put Jan Ceyssens, Head of Unit Digital Finance, and Eric Ducoulombier, Head of Unit Retail Financial Services, both from DG FISMA, in the “Spotlight”. The event will take place on 29 June 2023, the day after some landmark proposals will be published by the Commission, during the ESBG Spotlight Special, these two seasoned Commission officials will provide some voice over to the proposed Digital Euro Regulation, the proposed Payment Services Directive 3 and Payment Services Regulation, and the proposed Regulation on a framework for Financial Data Access.
The event will provide post-launch insights on these new legislative proposals, and will be moderated by Diederik Bruggink, Head of Payments, Digital Finance and Innovation. The introductions will be followed by a Q&A session. This hybrid event is free of charge and will be held in English. Upon registration, you can indicate whether you would like to attend the event physically at the ESBG offices in Brussels or online. As places for physical attendance are limited, you will have to await a separate confirmation from us whether you can attend physically ( you will be communicated by Tuesday 27th). Anyhow, once you have registered, you will receive a confirmation containing the meeting link and instructions for joining the webinar.
PROGRAMME
13:00 Welcome with Coffee
13:30 Start of webinar with Opening Remarks by Peter Simon
13:35 Introductions by Jan Ceyssens and Eric Ducoulombier
14:15 Q&A session moderated by Diederik Bruggink
14:45 End of the webinar
About the speakers
Jan Ceyssens is Head of the “Digital Finance” Unit in the Directorate General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) at the European Commission. He was previously Member and Deputy Head of the Cabinet of Vice President Dombrovskis and Member of the Cabinet of Vice-President Barnier, and Team Leader for Financial Supervision at the European Commission’s Internal Markets and Services Directorate General. He graduated in law from Humboldt University in Berlin and holds a Master’s degree in European Law from King’s College London. He works at the European Commission since 2006, initially in the Directorate General for Competition’s Cartels enforcement Directorate and since 2009 in the Internal Markets and Services Directorate General.
Eric Ducoulombier is, since 1 January 2019, Head of the “Retail Financial Services and Payments” Unit in the Directorate General for Financial Stability, Financial Services and Capital Markets Union in the European Commission (DG FISMA). Before that, he was in charge of the Unit dealing with Inter-Institutional affairs and Planning in DG FISMA. Eric joined the European Commission in 1992, after having worked a few years in the private sector (consulting, law firm…). He holds a Master’s Degree in Law.
Peter Simon is Managing Director at the European Savings and Retail Banking Group (ESBG).
Diederik Bruggink is Head of the Payments, Digital Finance and Innovation Department at the European Savings and Retail Banking Group (ESBG).
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Jan Ceyssens
Speaker
Head of the Digital Finance Unit in the DG FISMA, European Commission
Eric Ducoulombier
Speaker
Head of the Retail Financial Services and Payments Unit in the DG FISMA, European Commission
Peter Simon
Welcoming Remarks
Managing Director, WSBG-ESBG
Diederik Bruggink
Moderator
Head of Payments, Digital Finance and Innovation Department, WSBI-ESBG
Get in contact with us for more details about Spotlight, replays of previous editions or possible collaboration: constantin.vicol@wsbi-esbg.org
March 2023 Edition
WSBI ESBG
Month: June 2023
WHAT’S INSIDE?
• Institutional News (Page 2)
• Financial and economic education – are we there, yet? (Page 2)
• Interview with the ESBG President (page 3)
• Conference in Colombia to highlight the WSBI network’s value (Page 3)
• An Overview on LAPO: From creation to WSBI Membership (Page 4)
• A deeper gaze into the Amonatbonk of Tajikistan (Page 5)
• Global Forum on Remittances, Investment and Development (Page 5)
• Number of unbanked adult EU citizens more than halved (Page 6)
• Unlocking the potential of financial data (Page 6)
• EU-China Cooperation in Green Finance (Page 7)
• ESBG Roundtable on Retail Banking Fraud (Page 7)
• Advocating on the EU deforestation regulation (Page 8)
• WSBI-ESBG launches Cybersecurity Network (Page 8)
