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Growth, resilience and digitalisation : challenges and opportunities

By Cahen Didier - Secretary General, EUROFI


The European Union and its economies are facing many challenges and factors of instability that may significantly impact the financial sector either directly or indirectly. Some are external such as the refugee crisis, the terrorist attacks or the economic situation in other regions (China, lower commodity prices…). But many are internal to the EU, such as the high levels of unemployment and indebtedness that several Member States are experiencing as well as weak growth prospects and an ageing population in most countries.

These difficulties as well as the apparent or perceived inability of the European Union to provide credible answers for them or to preserve sufficient economic consistency across Member States is undermining the broad support that European integration had enjoyed since its inception in most parts of the Union. Euroscepticism is on the rise in many Member States and populist parties are challenging the previous political consensus on closer integration. Meanwhile the U.K. is organising a referendum on its membership of the EU. Its result, though still quite unpredictable, will impact the European debate to a certain extent, giving confidence to eurosceptical forces in the case of a vote to leave or stimulating the debate on the governance of the Union if the vote was favourable to remaining.

This environment is quite challenging but it is also a source of opportunities and progress for the EU and its financial sector, even if the final outcome and the impacts are still uncertain.

On the positive side, much has been done since the financial crisis to improve the resilience of the EU financial sector and of the entities that compose it (CRD IV, Banking Union, OTC derivatives regulation, MMF regulation…). Moreover the Eurozone has put in place several mechanisms to face up to a possible future crisis (European Stability Mechanism, Banking Union…).

Many growth oriented initiatives have also been launched. These aim at supporting and diversifying the funding of the EU economy (Capital Markets Union, Juncker Plan, recalibration of prudential requirements), further integrating EU financial markets, ensuring that there is an appropriate combination of growth and resilience objectives in EU regulations (Call for evidence), fostering lending and fighting against low inflation (ECB non-standard monetary policy measures) and improving the governance of the Eurozone (ESM, European semester, etc.).

The effect that these actions may have on the EU economies is however still difficult to predict. The tools that may have the most impact on the diversification of the funding of the EU economies, their calibration and their implementation schedule are still being discussed. Moreover, many observers are concerned lest additional regulatory requirements may trigger further deleveraging movements. The current loose monetary policy is starting to bring about unintended consequences e.g. increased volatility of asset prices and profitability issues for financial players. Economic convergence has not significantly progressed, with strong imbalances remaining to be solved across Eurozone Member States in particular.

2016 will be a crucial moment for the success of these projects.

At the same time, new waves of change are appearing very rapidly, bringing about both new opportunities and risks for the financial sector. Digitalisation and technological innovation represent probably the most striking evolution in this regard given their potential impact on current financial business models.

The Eurofi High Level Seminar organised in Amsterdam on the occasion of the Dutch EU Presidency is an opportunity for many key representatives of the public authorities and of the financial industry to discuss openly these issues, vital for the future of the Eurozone and the EU and of their financial sectors.

Most of the speakers (162) have accepted to express their views in this Eurofi magazine providing a comprehensive overview on these issues. We thank them very warmly for their thoughtful contributions and hope that you will read them with great interest.


Jean-Marie Andrès, Didier Cahen and Marc Truchet