The European financial regulatory environment is one of the most homogenised in the world and yet it still forces corporate treasurers to stay constantly alert for local nuances, revisions and wholesale changes. With the current European Parliament’s term running from 2019 to 2024, now is a good time to cast an eye over what is and what will be in terms of financial market regulations. Tarek Tranberg, Head of Public Affairs & Policy, European Association of Corporate Treasurers (EACT) is our guide.
If 2020 was largely defined for businesses as a year spent firefighting the economic fallout of the pandemic, and figuring out how to work remotely, the European regulatory landscape was about making adjustments to ease the pressure while staying true to objectives and laying the groundwork for the coming years, says Tranberg.
Amid the communications concerning long-term issues such as sustainable finance and the EU’s retail payments strategy, the regulators stepped up to the plate with some quick fixes to existing regulations to ease the burden on banks and companies. Their efforts, for example, relieved some of the pressure on bank capital requirements, freeing up some buffers to enable cash to trickle more fluidly into the wider economy.
The policymakers and regulators have acquitted themselves reasonably well as firefighters. Existing regulations, particularly those relating to banking capital requirements, have so far enabled the financial system to largely withstand the shocks of 2020. Only the possible increase of the European stock of non-performing loans is raising any concern.