Jörg Kukies in conversation: Berlin pushes financial market union

State Secretary for Finance aims at a common EU policy on digital finance strategy by the end of the year

The Federal Government is moving ahead with the digital financial market union. During its EU Council Presidency, it hopes to achieve a political consensus among member states on the EU Commission’s digital finance strategy by the end of the year. This could mean that legislation could already start in Brussels.

“The regulation of stablecoins, the demarcation between tech companies and financial service providers and the financial industry’s access to clouds are the most important issues for our EU Presidency in the area of digitisation and financial markets.” In an interview with the Börsen-Zeitung, State Secretary for Finance Jörg Kukies outlined the working plan for the digital financial market union, which the Federal Government intends to implement during its EU Presidency by the end of the year. EU finance ministers already discussed the plan at an informal meeting in Berlin.

Berlin aims to unite the Member States on a common political line by December.

“Our aim is to achieve as clear a vision as possible of the strategic priorities for a digital financial market union during our Presidency based on the EU Commission’s proposal in Ecofin,” says Kukies.

If the group successfully reaches common conclusions, the legislative process can start. Berlin’s points belong to the EU Commission’s not yet published digital finance strategy.

Nevertheless, the Federal Ministry of Finance’s timetable is ambitious if the Commission is to present the digital finance strategy, as expected, in October. There is little time for negotiations between now and December. “In the negotiations, we will try to reach a Council position on all capital market issues during our Presidency,” said the State Secretary, describing the further process. “We are very hopeful about the Capital Market Union. Proposals have already been made,” he said. “With regard to the digital financial market union, we are waiting for the Commission’s announced legislative proposals in addition to the two strategies for payments.”

Resolving fragmentation

The EU Commission had set out a broad field for the strategy in the summer when it called for consultation. The aim is to eliminate the fragmentation of the single market for digital financial services and to support the data-driven financial sector. It is about a new regulatory framework for financial services in the digital age. It should manage risk appropriately while being innovation-friendly and technology-neutral. It also aims to enable consumers and businesses to take advantage of the single digital financial market. Finally, the Commission wants to promote a well-regulated, data-driven financial sector and improve the operational stability of digital systems in the EU financial system.

The Wirecard case in Germany shed light on a long recognised but unsolved problem of financial supervision, which is the control of companies that offer services in the financial sector but are not considered financial services providers. Kukies sees a need for EU regulation there. The term “financial holding company” is defined in the Capital Requirements Directive CRR. “We must clearly shift the demarcation between tech companies and financial companies towards a stronger inclusion of services in financial market regulation,” Kukies explains. The issue of “data cloud” is also a question of demarcation. The data company Google recently acquired banks as customers nationwide and offered its cloud services. If financial services providers transfer transactions to the area of pure service providers, questions arise about the scope of financial supervision.

Strict consumer protection

In the case of cryptocurrencies, such as Facebook’s proposed Libra, the German government, together with four other EU countries, is pushing for strict specifications.

“We want clear supervision of cryptocurrencies,” says Kukies. “With our national laws on crypto-custody and the crypto-securities register in the Electronic Securities Act, we are enabling innovation, but within a clear legal framework, thus creating legal certainty.”

Five EU states, including Germany, declared in Berlin that clear Euro-denomination, the explicit regulation of consumer rights and a legally guaranteed right to collateral are central. If the step into the digital future is to succeed, the new financial instruments must also be safe for investors. “We also want to create acceptance among our citizens,” Kukies says, underlining the further plans. “We, therefore, want to set high standards.”


Source: Börsen-Zeitung, 15 September 2020, Angela Wefers, © All rights reserved.

Image: Gerd Altmann/Pixabay

Leon Saunders Calvert: Sustainable Finance – The challenges of scoring and ranking

The challenges and pitfalls of scoring and ranking

Read more

Reading Books during Covid-19

BCG: Books to read during the COVID-19 Pandemic

BCG created a reading list that has been greatly influenced by the personal implications of the unfolding global COVID-19 pandemic and profound unrest. The reviewers are a diverse group of BCGers, you can see this undercurrent reflected in almost every suggestion:

  • Purpose & Creativity
  • Diversity and Inclusion
  • Leading in the new Reality
  • Personal Wellbeing
  • International Relations

It does not matter whether you’re a CEO or a student. You will find something to teach or inspire you, or simply to enjoy.

Purpose & Creativity

Creative BCGers have found that equally creative business leaders often write the most readable books. These books on creativity and purpose may spark your creative fire and get you moving in a new direction.

The Songs of Trees
In The Songs of Trees, BrightHouse luminary and Pulitzer-prize nominated author, David Haskell explores the roots of connection; how our biology has shaped our relationships; and the complexity of networks that shape culture, awareness, and being.”

– Ashley Grice
CEO, Brighthouse

A Business and Its Beliefs: The Ideas That Helped Build IBM
“Written in the early 1960s—well before purpose was a business topic—the former CEO of IBM tells the story of IBM’s values and how its refusal to compromise those values became IBM’s primary strength. It is also one of the first books by a major CEO to discuss a corporation’s responsibilities in society, and how firms can meet expanding social expectations while still turning a profit.”

– Brad White
Managing Director & President, Europe & Middle East, BrightHouse

Diversity and Inclusion

BCGers, like many others, are thinking a lot about diversity and inclusion in the workplace, and beyond. These books on diversity and inclusion run the gamut from history to parenting to real advice on how to make a difference professionally and personally.

Jayber Crow
“Berry depicts the benefits and challenges of small-town America beautifully through a series of books centered on the fictional town of Port Meadow, of which Jayber Crow is my favorite. Far from naively idealistic, it is a raw and real portrayal of a vastly different life from the fast-paced, extravagant one in which we consultants live, which I find a compelling challenge.”

– Anna Gibson

97 Things White People Can Do for Racial Justice
“I can’t even begin to imagine how the Black community is feeling after the continued murder and violence against Black people in America these past few weeks: Breonna Taylor, Ahmaud Arbery, George Floyd, and Chris Cooper. This resource has given me actionable steps I can take to be a more compassionate citizen and ally.”

– Beth Viner
New York Center Lead, Managing Director & Partner, BCGDV

More books to read during the Covid-19 pandemic can be found here.

Text by Boston Consulting Group
Photo by Engin Akyurt / Pixabay

Now read

Never waste a good crisis

AFME Market Update: Impact of COVID-19 on European Capital Markets


DVFA Statement on the EU Renewed Sustainable Finance Strategy

The DVFA Sustainable Investing Commission participated in the recent consultation on the EU Renewed Sustainable Finance Strategy. Additional incremental measures in targeted areas are necessary to implement the Action Plan successfully, but the DVFA Sustainable Investing Commission believes that many significant developments have already been made. The DVFA Commission has identified a number of priority areas.

  • In order to achieve the objectives of the EU Sustainable Finance Strategy rapidly, the DVFA Commission believes that a two-handed approach is needed. First, rewarding the shift of private capital to more sustainable investments and/or at the same time discouraging it from benefiting from potentially damaging activities. Next, providing the proper regulatory framework for pricing (i.e. the carbon price) and the appropriate taxation mechanisms will be essential prerequisites.
  • The DVFA Commission believes that a data room for corporate ESG data could ease the implementation of the EU Action Plan, by improving access to data by financial market participants. The data presented should not suggest a qualitative or forward-looking assessment. A data interface should not replace ESG research houses but should increase the level of integrity and comparability of the required and standardised ESG data.

The DVFA Commission believes that ESG data is now more comparable and standardised than its reputation. The Commission took a position on this matter in the consultation and elsewhere (Take a look at: Guest distribution of Henrik Pontzen and Gunnar Friede). However, the expert, critical handling of multiple ESG ratings and the qualitative, conclusive overall assessment by the analyst remain indispensable for sustainable investing and underline the strength of the asset manager.

Ambiguities and occasional low data quality do not call into question the concept of sustainable investing, but rather are a mandate to investors to support the diversity of rating agencies. At the same time, investors should demand better measurement methods and, through dialogue with companies, sufficiently reliable and up-to-date data. It can also be a mandate to policymakers to better standardise data on key ESG indicators.

Nevertheless, the DVFA Commission is in favour of stronger regulation of sustainability reporting. As long as the disclosure of ESG data remains voluntary, the data disclosed by companies can potentially be positively biased. To date, hardly any jurisdiction holds companies and executives liable for false or misleading extra-financial data disclosed outside of regulated traditional financial reporting. As a result, most investors and analysts tend to discount reported ESG data and have less confidence in the quality of the ESG information provided. In addition, the infrequent and delayed disclosure of ESG reports compared to a company’s traditional financial reporting reduces usability. These issues need to be addressed.


The full statement can be found on the website of the DVFA Sustainable Investing Commision or here as PDF-file.

Annual bwf and ICMA Capital Markets Conference

The Annual Federal Association of Securities Trading Firms (bwf) and International Capital Market Association (ICMA) Capital Markets Conference will take place on 23 September 2020 as a virtual panel discussing MiFID II/R: the “Quick-Fix“ and beyond.

This year’s bwf and ICMA joint annual event will feature an expert panel of speakers who will discuss the likely impacts of the MIFID II “quick fix” as part of the EU’s coordinated response to the COVID-19 pandemic and the extent to which this will play a key role in promoting the recapitalisation of European companies as they emerge from the crisis. Under discussion will be the distribution of bonds with make-whole clauses to retail investors, changes to costs and charges disclosures, and the suspension of best execution reporting. The panel will then look ahead to the MiFID II/R review and the possible areas where either fine-tuning or a wholesale rethink could prove helpful, including the hot topics of research unbundling and  post-trade transparency.

Speakers include:

  • Frank Engels, CIO (UIP), Union Investment Privatfonds; Board Member, ICMA
  • Andy Hill, Senior Director, Market Practice and Regulatory Policy, ICMA
  • Dr. Annette Kliffmüller-Frank, Managing Director, ICF BANK AG
  • Dr. Jörg Kukies, State Secretary, Federal Ministry of Finance Germany
  • Tilman Lueder, Head, Securities Markets Unit, DG FISMA, Securities Markets, European Commission
  • Michael Sterzenbach, Secretary General, Bundesverband der Wertpapierfirmen

This ICMA event is free of charge and open to all bwf and ICMA members as well as interested financial market participants. Registration in advance is essential (Please note: registrations will close on Tuesday, 22 September at 17.00 CEST).


Image: difisher/Pixabay

Outstanding Start-ups – FinTechGermany Awards presented

Top performance in difficult times: Eight financial start-ups received the FinTechGermany Awards in Frankfurt on September 17, 2020 – the most important FinTech award in the German-speaking countries for five years. At the awards ceremony in the Tatcraft New Hardware Studios, over 200 FinTech and InsurTech enthusiasts, bankers and investors celebrated the winners. The livestream was followed by numerous interested people.

The award was presented in eight categories:

  • Category
  • Seed Stage
  • Early Stage
  • Late Stage
  • Growth Stage
  • Foreign New Entrant to Germany
  • Insurtech
  • Artificial Intelligence
  • Blockchain
  • 1. Place
  • Tangany
  • Myos
  • Penta
  • Raisin
  • Qonto
  • Getsafe
  • Hawk AI
  • Cashlink

In total, more than 220 startups and scaleups from Germany and around the world had applied or were nominated by the jury at the beginning of the year. The jury then compiled a shortlist of 43 start-ups. The prestigious FintechGermany Award has been presented since 2016 – this time, due to the corona pandemic and the resulting hygiene and distance regulations, the award ceremony was held for the first time as a hybrid event and not, as usual, in the Tech Quarter at Messe Frankfurt.

Dr. Jens Zinke, Managing Director of WM Gruppe/Börsen-Zeitung, which has been accompanying the award since 2016 as media partner and co-organizer, says: “This was the fifth time that the FinTechGermany Awards were presented and once again it showed the high performance density among young and innovative companies in the financial sector. A big praise to all participants, all applications were of high quality, which is really impressive in an international comparison”.

Michael Mellinghoff, Managing Director of TechFluence UK, co-organizer and co-head of the jury: “For the top-class, 19-member jury it was a very special challenge to track down the top FinTechs from all over Germany among so many really great applications this year. We are particularly pleased that this year, with Raisin, a company has managed to take home our award for the second time”.

Dr. Lutz Raettig, President of the Financial Center Initiative Frankfurt Main Finance: “This year’s edition of the FinTechGermany Award has once again proven that young financial companies can establish themselves alongside the top performers of the financial industry and that the source of ideas for new business models, products and services does not dry up.”

The complete list of the winners:

  • Category
  • Seed Stage
  • Early Stage
  • Late Stage
  • Growth Stage
  • Foreign
  • Insurtech
  • Artificial Intelligence
  • Blockchain
  • 1. Place
  • Tangany
  • Myos
  • Penta
  • Raisin
  • Qonto
  • Getsafe
  • Hawk AI
  • Cashlink
  • 2. Place
  • Spherity
  • Trade Republic
  • Fraugster
  • N26
  • SumUp
  • -*
  • -*
  • -*
  • 3. Place
  • Crypto Tax
  • Arabesque S-Ray
  • FinTecSystems
  • Mambu
  • Klarna
  • -*
  • -*
  • -*

*In the categories Insurtech, Artificial Intelligence and Blockchain no second and third places were awarded.

Impressions FintechGermany Award 2020


Photos: Kaleidomania / Axel Gaube

Never waste a good crisis

EU and UK are still in negotiation mode. In absence of an extension of the transition period, a no-deal Brexit has once again become a plausible scenario. The advice “hope for the best and prepare for the worst” is as valid as ever in this saga.

We advise financial institution to not plan based on equivalence. Even in the best of cases, equivalence doesn’t cover all relevant areas. What’s more, neither the very rational of the Brexit – taking back control – nor the way negotiations are going, point to equivalence as a solution.

Market participants acted accordingly. The loss of passporting rights will lead to a shift of roughly 50 percent of EU business on UK based bank balance sheets to the continent. We have seen bookings move into Frankfurt of about €300 billion so far. We expect another €100 billion before the end of the year and we know of another €400 billion ready to move.

Will all that lead to more inefficiencies? Not necessarily. Fragmentation may, but does not necessarily, lead to higher costs. Notto forget that costs occur not only on banks profit and loss accounts, but eventually also in state-budgets. Given the impact on financial stability, standing on your own two feet is better than standing on one, especially if that one is beyond your control.

It was a key project of the G20 under the stewardship of Japan fighting global fragmentation of financial markets and rightly so. At the very same time Japan continued on its endeavour in bringing the Yen clearing back to Tokyo, at least to a sufficient degree.

Take Eurex as an example: We are nearing 20 percent of Euro denominated interest rates swaps, were clearing moved from London to Frankfurt, and growing. This was achieved with costs and spreads on par for market participants. Social risks could be reduced and at the same time costs for market participants been avoided. If it sounds like the holy grail, it probably is. Let’s remember the scaremongering numbers of up to €100 billion additional costs European banks would have to bear once clearing would have to move. So clearly there can be a good fragmentation, leading to a healthy competition and more financial stability – at no additional costs for the industry. Fragmentation can, but doesn’t have to be bad and may even be good.

The train of shifting business is in motion. In a world ever more polarized and global powers increasingly self serving, Europe can ill afford to loose control of it’s financial ecosystem, given the geopolitically relevance of the industry. Naturally the UK will always be invited to be the EU’s preferred partner.

The corona virus created a push towards digitalization and solidarity in Europe, at a spead, that was surprising even for optimists.

The corona virus created a push towards digitalization and solidarity in Europe, at a spead, that was surprising even for optimists. As a result, we need to ask ourselves: Do we witness the early days of a new European safe asset class?

And if so, could it accelerate the creation of the common EU capital market. Europe’s ability to move under stress has repeatedly been underestimated. I’m bullish on Europe living up to its challenges, not wasting this crisis.


Source: Hubertus Väth, Managing Director of Frankfurt Main Finance in Views – The EUROFI Magazine (Berlin, September 2020)

Image: Pete Linforth/Pixabay

SGC – Virtual Roundtable: Experiences of German FDI in China

The Sino-German Center of Finance and Economics (SGC) invites you to its fifth virtual roundtable in 2020 that will continue the topic of the last webinar about the EU-China Comprehensive Investment Agreement. This time, the Panel Discussion will focus on the experiences of German FDI in China with company’s representatives.


22. September 2020, 11am – 12pm (CEST) via Zoom.


Dirk Lubig, Managing Director, Deutsche Bank China, Beijing

Christian Martin, CFO, Zeiss Greater China, Shanghai

Stefan Messer, CEO, Messer Group, Bad Soden

Henry Tillman, China Investment Research, London


Prof. Horst Löchel, Co – Chairman Sino-German Center

Prof. Rüdiger von Rosen, Co – Chairman Sino-German Center


Register at: Website of Sino-German Center of Finance & Economics

The Sino-German Center of Finance and Economics (SGC) is a registered association since 2015.
It emerged from the RMB initiative of the Government of Hessen to position the financial center of Frankfurt as RMB offshore hub. The opening ceremony took place in September 2015 at the German embassy in Beijing jointly conducted by the Deutsche Bundesbank and the People’s Bank of China.


Image: Markus Winkler/Pixabay

Moody’s ESG Summit

Understand the climate challenges to embed better risk analysis

Following last year’s success, Moody’s ESG Summit is coming back in digital format. What to expect?

  • Climate Risk Insight: Examine regional trends that will shape recovery
  • HD Broadcast: Watch broadcast quality sessions live or on demand
  • Live Participation: Discover market sentiment and get your questions answered

Some of the topics in focus:

  • What are the key climate challenges facing policy makers, regulators and the market participants?
  • The $80 trillion question – integrating credit rating and climate scenarios
  • The new risk dynamics: embedding scenarios into risk analysis

Live broadcast starts 24 September 09.15 EST.

Find more information on Moody’s ESG Summit here.



Photo by Josh Riemer via Unsplash.



We want a new beginning for Europe – AFCA Think Tank Working Paper by Hubertus Väth

Germany will serve in the current Presidency of the Council of the European Union until the end of 2020. During the German Presidency, many high-profile topics are on the agenda, including a video conference of European Union leaders with President Xi Jinping scheduled for mid of September, potentially followed by a personal meeting Read more