A Digital Euro: what does it mean for savings and retail banks?

Since its inception, ESBG has been taking an active role in Digital Euro-related discussions and overall, ESBG welcomes the Digital Euro from the viewpoint that having digital money issued by the central bank would provide an anchor of stability for the monetary system.

We also believe that the Digital Euro would strengthen the monetary sovereignty of the euro area. However, we predict that the introduction of a Digital Euro could also have some major unintended consequences impacting savings and retail banks if not addressed properly.
Our position paper, issued in March 2023, reflects on the effect of the Digital Euro on retail and saving banks, we highlight three areas where the introduction of the Digital Euro could have a negative impact on our members.
Firstly, the Digital Euro can severely affect our balance sheet activities – the core business for savings and retails banks. Detailed work is still needed to identify a suitable model for distributing, storing and exchanging digital currencies that balances the needs of maintaining the effectiveness of monetary policy transmission mechanisms, customer service and regulatory compliance. Otherwise, and if the Digital Euro becomes “too successful”, the deposit outflow could reduce the balance sheets of banks and eventually their capabilities to finance the economy – as a result, possibilities for consumer finance, mortgages and SME financing will be reduced and the potential impact on banks’ liquidity positions is very relevant.
Secondly, lots of obligations and requirements will be put on savings and retail banks as envisioned institutions for the distribution of the Digital Euro, whilst a sustainable long-term business model is questionable.
Finally, cashless payments in the euro area are flourishing and are showing healthy growth rates. Under a push from regulators, banks are already heavily investing in payment solutions (notably based on instant payments) that address the need for European sovereignty in payments. These new solutions under development will need to find their place in the already competitive payments mix – adding yet another competing payment product by positioning the Digital Euro as such is a game changer. At any rate a level playing field needs to be present.
Therefore, although supportive of the Digital Euro, we are of the opinion that many legitimate and reasonable questions still need to be answered and a successful implementation needs to properly address the above concerns. In order to achieve this, we argue for significantly lower maximum caps on holdings. For the distributors of the Digital Euro, a long-term sustainable business model will be required. And if the Digital Euro will be positioned as a retail payments product, it should not use its privileged position as a public-money funded product by mandatory acceptance requirements that distort the competitive retail payments market.


WSBI-ESBG Managing Director discusses Basel IV, CMDI and SVB at the Politico Finance Summit 2023

WSBI-ESBG Managing Director, Peter Simon, discussed Basel IV, CMDI and SVB at the Politico Finance Summit 2023

WSBI-ESBG Managing Director discusses Basel IV, CMDI and SVB at the Politico Finance Summit 2023 On 23 March, WSBI-ESBG Managing Director Mr Peter Simon discussed the priorities of the association on Basel IV, the Crisis Management and Deposit Insurance (CMDI) framework and the Silicon Valley Bank (SVB) case at the Politico Finance Summit 2023 held in Paris
The other panellists included the European Parliament Rapporteur on the Banking Package, MEP Jonás Fernández (S&D) and the EBA Chairperson, Mr José Manuel Campa. This year’s Finance Summit brought together a great many of speakers & panellists from the European Parliament, the European Commission, representatives of several Central Banks along with high-impact EU-affiliated associations and Mr. Peter Simon was the only panellists from the financial and banking sector, thus, he was the voice of retail and savings banks that WSBI-ESBG represents.

The EBA Chair and the EP Rapporteur highlighted the importance of a timely and faithful implementation of the outstanding Basel IV reforms in the European Union. According to them, it would be essential to ensure banks can withstand future crises and a necessary condition for the proper functioning of the European and global financial systems. Looking at the ongoing trialogues, attention was drawn to the proposed deviations from Basel in the respective positions of the co-legislators, which may undermine the credibility of the EU financial system.

Stressing that the EU already applies the Basel rules to all its banks, and that EU banks are currently better capitalized with stronger liquidity ratio than 15 years ago, ESBG recalled the importance of achieving a proportionate and balanced implementation of the international standards in the EU regulatory framework.

This approach would preserve the diversity of the business models which characterises the European landscape, thus enhancing further financial stability and a global level playing field. Among others, ESBG recalled the need to apply the output floor as envisaged in the Basel text, i.e. at the highest level of consolidation, and to keep the transitional arrangements for unrated corporate and low-risk mortgages until Europe implements proper solutions to the underlying issues.

On the SVB collapse, panellists agreed that the case should be read in terms of bad management and lack of appropriate supervision. It was stressed that SVB is not a small bank (more than $200billion assets) and that its business model, characterised by a very concentrated deposit base on tech-firms and venture capital companies, cannot and should not be compared to any European bank.

Diverging views were brought to the table on the upcoming CMDI review, with ESBG calling for an evolution of the framework, not a revolution. The principle of duality under which some entities are to be resolved and some others are to be liquidated under national insolvency proceedings (NIPs) should be maintained. MEP Fernández on the other hand hopes that the Commission will move forward with the European deposit insurance scheme (EDIS) and called for harmonised rules in terms of hierarchy of claims in liquidation.

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Roberto Timpano
Principal Advisor- Prudencial Policy and Supervision

e.: roberto.timpano@wsbi-esbg.org
t.: +32 2 211 11 66

Meet the Advocacy Team


WSBI has been endorsing financial education for 100 years



Peter Simon
WSBI-ESBG Managing Director

At the sidelines of the WSBI International Retail Banking Leaders Conference which was held on 17 March in Cartagena, Colombia, WSBI-ESBG Managing Director Peter Simon held an interview with Colombian financial magazine “Portafolio”. The interview was originally published on Portafolio website in Spanish

What is the contribution of savings banks and retail banks to society?

The concept of savings banks have its ideological roots in the Age of Enlightenment, in the 18th century. On the one hand it is based in the principle of giving everybody a platform for self-help and on the other hand on the idea of investing the money of a region within the region to strengthen it for the well-being of all people living there. Savings banks were created with that idea in mind and aimed at the poorer classes who had until then no access to financial services – to empower them to prepare for the future. Savings banks were born at the heart of working communities and helped develop the habit of putting a little bit of money aside to build up resources to face difficult times. To this day, the role of savings banks continues to be essential to build strong individuals, families and communities who are ready to face adversities and can create prosperity by using their savings to create new sources of income.

What are the lessons learned from the pandemic?

During the pandemic, savings banks all over the world proved that in difficult times they back their single clients in problems as well as the local economies. But the pandemic showed also very clearly how important savings can be. Resilient people have savings, and resilient people make resilient societies. I can say that millions of people around the word were able to face the reduction or even complete lack of income during the steep economic slowdown created by the lockdowns thanks to their savings. I believe that the important role of savings and retail banks was very clear because they provide a safe way to keep and grow savings, and open the doors to people, including low-income people, to other financial products. I believe that the main lesson was that financial education is essential to build resilient societies and we should continue building financial education because it leads to people who are financially savvy and included. Most savings bank constantly conduct financial education programmes and these should continue and grow, and the role of the private and public sectors is very important to ensure that even the most vulnerable people are financially educated.

What are the main factors involved in the development of the sector?

There are many but I would like to highlight one that was boosted precisely by the pandemic: digitalization. Savings and retail banks are institutions rooted in a long tradition but also flexible institutions that are able to evolve with the times and one of the most current ways to serve customers of all sizes is digitalization. It is a trend that started a decade ago but was accelerated by the lockdowns imposed during the pandemic. Now, it is very important to continue in the path of digitalization hand-in-hand with financial education to ensure that no one is left behind in this new era, with particular focus on vulnerable groups and senior people should be included.
Another very important factor for our sector to thrive are proportional regulations at all levels. Savings and retail banks include institutions of all sizes and we believe that the regulations should be proportional to the size and capacity of each institution so that they can continue to thrive and are not burdened by unnecessary procedures that could jeopardize their resources needed to ensure excellent service to their customers.

Why has financial education only been discussed in the recent past?

No, financial education efforts have always been at the heart of savings banks and, as mentioned before, these date back to the 18th century. I am honoured to be the Managing Director of an institution founded almost 100 years ago. Indeed, the World Savings and Retail Banking Institute was created in 1924 in Milan at the first “International thrift day”. Already this first meeting dealt a lot with all questions around financial education and since then financial inclusion and financial education is a key element of the common DNA of our members.
To give you an example of he recent past: We have seen worldwide a trend towards a special focus on the financial education of women because there is still a dramatic gender gap and lots of room for improvement. For example, at the international level women have about 30-40% less pension funds than men when they retire while at the same time they tend to leave longer. This puts senior women in a vulnerable position and that is something that can be corrected with financial education and awareness about the importance for both men and women to take the lead of their own financial future.

What is missing to advance in a greater degree of financial inclusion that allows real access and use?
Customer-centric products and services are at the centre of successful financial inclusion. To achieve this, banks should really know their customers, including especially low-income customers, and truly respond to their needs. Last year the WSBI closed a six-year programme on financial inclusion called Scale2Save, a partnership with the Mastercard Foundation. In the framework of this programme we included 1.4 million people into the formal financial system for the first time in six African countries. One of the main takeaways of this programme was that banks can develop products for low-income people that work and that are sustainable and one of the keys is that these respond to people’s needs by having a customer-centric approach behind them.

What will be the main messages of the Cartagena meeting?

WSBI International Retail Banking Leaders Conference in Cartagena will focus on topics such as but not limited to cybersecurity and digitalization, sustainable finance and financial education and inclusion.
High level executives from four continents, including some of the WSBI members, will immerse in this academic event to reflect on how to move forward to continue serving in this changing world. How can we contribute to the sustainable future this planet needs? How can digital and cybersecurity measure help us thrive? How to continue building financial education and inclusion in the most effective way? These are all topics that we will discuss during the day. Some of our members will present their success stories and lessons learned on these topics, external experts and academics will also present their views. This will be a truly remarkable opportunity for leaders of our sector and we are thrilled to hold this, our first in-person event in the region since the pandemic hit. We are particularly grateful to our host, Mr. Diego Prieto, President of Banco Caja Social and regional president of the WSBI; and to Mr. Isidro Fainé, the WSBI President, President of the “la Caixa” Foundation, and a truly remarkable unique personality in the business and philanthropic sectors.

Global retail bank leaders meet in Colombia to discuss trends on sustainable finance, cybersecurity and financial education

Global retail bank leaders meet in Colombia to discuss trends on sustainable finance, cybersecurity and financial education

The conference was hosted by WSBI President, Mr Isidro Fainé (President at ‘La Caixa’ Foundation) and the WSBI Regional President for The America and Caribbean, Mr Diego Prieto (President at Banco Caja Social, Colombia). The World Savings and Retail Banking Institute (WSBI), based in Brussels, brings together 88 worldwide saving banks associations from 67 countries.

Isidro Fainé highlighted the social responsibility of banks to make a more prosperous, sustainable and equitable society. “In recent years, we have seen unprecedented movements in interest rates, suffered a chain of financial crises and had to adapt to drastic reforms in the regulatory frameworks of the banking sector. We are immersed in a complex, uncertain and unstable scenario.” The president reassured confidence when he added: “I am optimistic about our future. We are called upon to continue to conduct banking with a profound sense of social responsibility and to make a more prosperous, sustainable and equitable society a reality. At this time of growing inequalities, our social action takes on more importance than ever”.

Peter Simon, Managing Director of WSBI-ESBG stressed “We all have the responsibility to discuss and define what is our take as socially responsible banks and as global leaders in retail banking, amid a complicated economic outlook and the advent of new technologies. While it’s true that artificial intelligence is becoming increasingly sophisticated, and one day, with AI, we will be able to make smarter investment decisions than the best Wall Street analysts, it is important to remember that technology can never fully replace the human touch in serving communities. As our members know first-hand, serving communities requires more than trust financial expertise, it requires a deep understanding of the needs of the struggles of the daily lives of the people that we all serve”.

During the conference, leading financial experts from IFC (International Finance Corporation) World Bank, the WEF, CECA, Caixa Bank, Telefonica, Al Barid Bank (Morocco) and State Bank of India, amongst others presented success stories in digitisation and cybersecurity tackling sustainable finance and financial education as a means for financial inclusion.

Priorities for the coming years

Helmut Schleweis, President of DSGV German Savings Bank Association (DSVG) and Dominique Goursoulle-Nouhaud President Chairman of the National Federation of Caisses d’Epargne (FNCE) and also the President of the European Saving and Retail Banking Institute (ESBG), as keynote speakers, showed the solid commitment of the WSBI’s members to the latest WSBI General Assembly’s priorities in Paris in 2021. Financial inclusion, the promotion of sustainable finance, innovation, leveraging digitisation to promote proximity to the customer and reinforcing solvency in the framework of Basel IV, were the priorities set for the coming years.

The Conference was kindly sponsored by CaixaBank, Banco Caja Social, CECA, DSGV, Minsait (INDRA), and Movistar Empresas.

From the Press corner

Mr Isidro Faine’s interview with El TiempoMr Peter Simon’s Interview with Portafolio
Other publications from Latin America news outlets:
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Press contact: Maria Maria Gaton Fraile
Head of Department – Communications

Tel.: +32 2 211 11 91


ESBG submits its response to the EBA consultation on the overall recovery capacity in recovery planning.


March 17, 2023

On 14 March, ESBG submitted its response to the consultation launched by the European Banking Authority (EBA) during mid-December on its draft guidelines which aim to harmonise the observed practices on the overall recovery capacity (ORC) determination and assessment, so as to improve the usability of recovery plans and make crisis preparedness more effective.

The objective of the ORC is to provide a summary of the overall capability of the institution to restore its financial position after a significant deterioration by implementing suitable recovery options.

In its response, ESBG firstly wanted the EBA to specify the requirements regarding the impact assessment of the recovery options and also to clarify the scenario severity. Scenarios are considered severe if they would lead institutions to the ‘near-default point’ in case no recovery options are implemented. Does this ‘near-default point’ refer simultaneously to Total SREP Capital Requirement (TSCR) and Total SREP Leverage Ratio (TSLRR) or alternatively either TSCR or TSLRR? ESBG wanted also to know whether breaching the near-default point corresponds to the Failing or Likely To Fail (FOLTF) point declared by the supervisor and the National Resolution Authorities (NRA) leading to resolution proceedings.

Secondly, ESBG underpinned a lack of level playing field for the determination of the ORC, although, setting a harmonized FOLTF point may appear fair. High reported capital/liquidity ratios of banks increase the starting point for the scenario calculation. Hence, the necessity to decrease from high capital/liquidity starting point to FOLTF point assumes a stronger degradation of the general economic conditions which leads to more severe haircuts on recovery options and a lower ORC. Therefore, this is a clear disadvantage for banks with high or increasing capital/liquidity ratios.

Finally, regarding the ORC score assessed by the competent authorities, ESBG considers that it is not realistic to fulfil all the buffers included into the recovery indicator levels after such severe crisis.

Executive SummaryFull Position Paper


Politico LIVE

Europe’s economy is heading into troubled waters. Inflationary pressure, driven by the most acute economic circumstances since 2008, has put policymakers in the hot seat to steady the course. On top of this, leaders across Europe have been tasked with running a tight ship – finishing up on key finance policy files and keeping up with a disrupting FinTech economy. What will 2023 look like once the storm has settled?

POLITICO Live’s Finance Summit on March 23 will peek into the telescope to see what’s next for the finance sector, and what role it will play in driving tomorrow’s economy. A much-needed status update of Europe’s economic situation will kick off the day, followed by in-depth discussions on banking, green finance and more, topped off by compelling discussions on crypto and payments.

Finance Summit: Mr Peter Simon, the Managing Director of WSBI-ESGB is speaking at: Spotlight discussion - Basel III and the road to the Banking Union: almost there?

Thank you for joining POLITICO Live Finance Summit! Comment your favorite moment from the day using #POLITICOFinance
Missed a session? The discussions will be uploaded to YouTube shortly!


Thursday, March 23, 2023 12:35 PM to 1:10 PM

Other panelists:

José Manuel Campa · European Banking Authority
Jonás Fernández · European Parliament
Hannah Brenton · POLITICO-Moderator

Cybersecurity Network 1st Meeting

Hybrid meeting, Deutscher Sparkassen- und Giroverband (DSGV), Berlin

WSBI-ESBG is launching a Cybersecurity Network (CSN), a new network for members focused on all matters related to today’s banking, payments, and finance security challenges. This network will be a platform of exchange where WSBI-ESBG experts in cybersecurity can exchange knowledge and best-practices with both each other and external speakers. In addition, members will have the opportunity to build an international network and stay up to date regarding recent developments in the area of cybersecurity. We foresee to organize regular network meetings, as well as stand-alone events, such as trainings and conferences. Oliver Lauer, Head of digitallabor.berlin, DSGV, will be chairing the CSN. The 1st meeting of the Cybersecurity Network is scheduled to take place the 30th and 31st of March 2023, hosted by DSGV in Berlin.

WSBI-ESBG’s Managing Director advocates for proportionate banking supervision at EBI event

On 8 March, WSBI-ESBG’s Managing Director, Mr Peter Simon, joined an online panel organised by the European Banking Institute (EBI) about ECB Banking Supervision and SSM Supervisory Priorities for 2023-25. Other panellists included Mr. Thomas Gstädtner Ph.D (ECB) and Mr. Christos Gortsos Ph.D (National and Kapodistrian University of Athens).

In his introductory statement, Mr Simon stressed the importance of striking the right balance between harmonisation and proportionality in banking supervision. Supervisory expectations and requirements should always be proportionate to the size, significance and riskiness of the supervised institutions. He also mentioned specific issues such as interaction between the Single Supervisory Mechanism (SSM) and National Competent Authorities (NCAs) as well as the transparency of the ECB decision making process.

The integration of climate risk considerations in banks’ risk management processes will continue to be one of the key ECB priorities for the next three years. Provided that prudential regulation should be risk-based, it was highlighted that the financial sector is continuing to progress in the identification, disclosure and management of these risks, and that banks’ efforts to sustain the economic transition keep on increasing.
Banks’ digital transformation is another key priority. The ECB wants to make sure that banks have a sound digital strategy in place . The role of the ECB would then be to check how adequate the risk management and governance structure of supervised institutions for a given digitisation strategy would meet minimum expectations..
Another important topic that was discussed is corporate governance including the Fit and Proper framework. Here ESBG explained the reasons why the ex-ante/ex-post assessment suitability of members of the management body should be a choice at national level.

Participants also discussed what banks should do to build resilience towards future macro-financial and geopolitical shocks. On this point ESBG stressed that today, banks – especially locally rooted savings and retail banks – are part of the solution thanks to their demonstrated solid capital and liquidity position which allows them to continue supporting companies and households even in time of stress.

In conclusion, ESBG called on EU policy makers to achieve better and more proportionate regulation and supervision, which would allow financial institutions to carry out their daily activities, such as lending to SMEs, under a non-detrimental regulatory framework.

Roberto Timpano
Principal Advisor- Prudencial Policy and Supervision

e.: roberto.timpano@wsbi-esbg.org
t.: +32 2 211 11 66

Meet the Advocacy Team


ESBG submits its response to the EBA consultation on its data collection for the benchmarking exercise in 2024

On 28 February, the ESBG submitted its response to the European Banking Authority (EBA) consultation on its data collection for the benchmarking exercise in 2024. The aim of this supervisory benchmarking exercise to monitor and to assess the variability of institutions’ internal approaches used for the calculation of own funds requirements for market and credit risk as well as the usage of their IFRS 9 models, as well as on the impact of the several different supervisory and regulatory measures, which influence the capital requirements and solvency ratios in the EU.

In relation to the IFRS 9 models benchmarking, the ESBG expressed its support with the EBA approach to collect the whole set of information (“full data collection”) only for a limited number of HDPs asset classes and to use only the more relevant characteristics – i.e., “split” – for defining the homogenous portfolios in scope. Moreover, with respect to the materiality thresholds to be implemented in this case, the ESBG believes that these thresholds should not focus on exposures only, but on allocated provisions as well.
Furthermore, with respect to the EBA template on “Details on exposures to High Default Portfolios” (Template 115), the ESBG requests additional clarity on the probability of default (PD) used to compute the 12-month expected credit loss (ECL) (the ECL represents the weighted average credit loss with the PD as the weight). The ESBG ask for confirmation that if the facility expires before the year considered for a specific data point, the facility’s PD will not be included in the exposure weighted average PD.
Moreover, with respect to the EBA template on “Details on exposures in High Default Portfolios by economic scenarios” (Template 116), the ESBG notes that the guidance provided by the EBA states that the ECL amount associated with the economic scenario 0 shall be the weighted average of the ECL reported for the economic scenarios 1 to 5, while the SICR assessment is done based on weighted average PDs.
As such, the ESBG expects that there will be material differences between the booked ECL amount based on the Significant Increase in Credit Risk (SICR) assessment based on probability weighted PD, and the amount calculated as the weighted average of the ECL reported for the economic scenario 1 to 5 (SICR assessment based on scenario PD).
The ESBG will continue this important topic for its members and stands ready to become involved with regulators in this respect.


The State of Savings and Retail Banking in Africa

Scale2Save Campaign

Micro savings, maximum impact.

The WSBI has conducted two research reports tracking the progress of retail and savings banks in their financial inclusion efforts across Africa (2018, 2019). These reports found that challenges persist around driving client centricity within the institution as well as the formation of partnerships across institutions to offer more low cost effective products.

In 2020 and 2021, the research efforts are focusing on finding solutions to these challenges. The research focus has thus turned to producing a series of case studies, each of which focuses on one theme that an institution may focus on to drive its response to the challenges outlined above. The case studies are:

COVID-19 in Africa – Customer, FSP and regulator perspectives: The first case study looks at the impact of COVID-19 on institutions and the retail financial services market. Whilst it does not propose solutions similar to the other case studies, it helps frame the additional challenges that institutions faced during the upheaval that accompanied the pandemic.
Leveraging mobile for the low income market: The mobile phone is becoming ubiquitous across Africa. Its full potential to offer financial services has however not been entirely exploited. What lessons exist for FSPs that are looking at leveraging mobile engagements with their customers in Africa.
Innovative business models and partnerships: Financial services providers have many options to partner with other institutions to enhance their offering to the market and achieve cost effective scale. What have been some of the successful innovative models applied across Africa?
Serving customers effectively through digitisation: Digital is touted as more efficient, simple and effective. How have institutions gone about driving digital transformation of their own internal systems, as well as their client engagements. Are there lessons to be had for institutions embarking on a digitisation journey?
Financial services for a specific market – Agriculture: The African economy has a large agricultural sector that plays a key role in its economic development, as well as the livelihood of its people. What have FSPs been doing to target this key market
Tentative – Client centricity and new data: The final case study is tentatively scheduled to focus on designing truly customer-centric products by leveraging information that has been previously unused by FSPs.
Please join us for a discussion on the third and fourth case studies – where these studies will be presented and debated across the African membership. The agenda for the discussion is outlined below.


15.00 – Welcome

15.05 – Introduction

Overview of the State of the Industry research series

15.15 – Business models for the mass market

What options are available for an FSP operating in the low-income market?

When is which option ideally deployed?

15.30 – Digitalisation to serve low-income customers

Digitalisation in context, more than a channel

Take-aways from institutions that successfully implemented digitalisation

15.45 – Case study – ABB

Barid-Cash, a successful case of digitalisation across a business

Partnerships, how has it served ABB?

16.00 – Discussion

16.15 – Conclusions

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