CFS survey: German financial industry now clearly expecting a “no-deal” Brexit

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The new UK government under Prime Minister Boris Johnson is preparing to leave the EU on 31 October, with no agreement in place. Now the majority of the German financial industry is also expecting a “no-deal” Brexit. This was shown in a recent survey by the Center for Financial Studies. Of those surveyed, 55% consider a disorderly Brexit to be probable, and 31% even see it as very probable. Only 11% are more optimistic in this regard.

The majority of respondents (63%) believe the German financial sector is sufficiently prepared for a “no-deal” Brexit, while 36% see a need for further measures.

“Considering how likely a ‘no deal’ Brexit has become, the survey results are rather worrying, as there is little time left for market participants to make adjustments,” Professor Volker Brühl, Managing Director of the Center for Financial Studies, interprets the survey results.

The EU has ruled out any renegotiation of the Brexit deal and should not offer any further compromises in the hope of avoiding a “no-deal” Brexit. This opinion is held by the majority (70%) of the German financial sector. Nonetheless, the respondents also agree (61%) that the financial markets have not yet fully anticipated a “no-deal” Brexit scenario and that market distortions may therefore occur.

“The survey indicates that the financial industry is prepared to accept the potential drawbacks of a ‘no deal’ Brexit if it means finally obtaining clarity about future framework conditions,” Professor Brühl adds.

There is also a broad consensus among respondents (88%) that if the UK leaves the EU in a disorderly fashion, more business activities and employees will be relocated to continental Europe.

Hubertus Väth, Managing Director of Frankfurt Main Finance e.V., highlights: “Should there be a Hard Brexit, which the majority of respondents assumes is the most likely scenario, it will be important for the Financial Centres in continental Europe to demonstrate their efficiency. If we succeed in cooperating across borders, Europe could emerge from the crisis even stronger.”

 

 

CFS Index remains on downward trend

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Financial industry records a significant decline in investment volume growth / Financial institutions report rising earnings growth accompanied by weaker revenue growth and fewer job cuts

The CFS Index, which measures the business climate of the German financial sector on a quarterly basis, falls by 2.5 points to 109.9 points. The index thus remains on a downward trend that began a year ago. The current decline can be attributed in particular to significantly lower growth in the investment volume of the financial industry. In addition, the financial institutions report lower revenue growth, though this is offset by higher earnings growth and fewer job cuts. The service providers also indicate a low level of revenue growth. This is coupled with a decline in earnings growth, which is at a very low level compared to the previous year. The service providers are optimistic about the current quarter.

“The declines in the core indicators of revenue, earnings and investment, with overall employment remaining unchanged, underscore the difficult situation faced by the sector, where the deteriorated outlook is now affecting the service providers as well as the banks,” Professor Jan Pieter Krahnen, Director of the Center for Financial Studies, interprets the results.

The future international importance of the Financial Centre Germany continues to consolidate, repeating its decline of 3.6 points from the previous quarter, yet remains at a positive level of 119.7 points. The latest decrease reflects the assessment of the service providers. Their index value falls by 11.8 points to 121.8 points. After dropping sharply in the first quarter, the assessment of the financial institutions has been revised upwards again. Their sub-index rises by 4.4 points to 117.6 points. This means the assessments of the financial institutions and the service providers have largely converged.

Dr. Lutz Raettig, President of Frankfurt Main Finance e.V., emphasises: “The differing trends of financial institutions and service providers appear to reflect a wait-and-see attitude. We will probably not know which direction we are heading until after 31 October – the next possible Brexit day.”

Revenue growth of financial institutions declines

The growth of revenues/business volume among the financial institutions declined in the second quarter. The corresponding sub-index falls by 3.0 points to 112.0 points. A further slight decline is expected in the current quarter. The revenues of the service providers, at 110.9 points, remain almost unchanged at the low level of the previous quarter (-0.3 points), though they remain optimistic regarding the current quarter.

Considerable earnings growth among financial institutions / Falling earnings growth among service providers accompanied by a positive outlook for the current quarter

Earnings growth among the financial institutions was positive in the second quarter, as anticipated. The sub-index rises by 3.4 points to 104.4 points. By contrast, the sub-index for the service providers falls by 3.7 points to 103.5 points, which is very low compared to one year ago (-24.2 points). As with their revenues, the service providers remain optimistic about their earnings growth in the current quarter. The financial institutions are anticipating a decline in earnings growth.

Financial industry investment volume is down

The financial industry reports lower growth in investment volume in product and process innovations in the second quarter. The corresponding sub-index for the financial institutions falls by 5.8 points to 106.1 points. The service providers register a decline of 4.9 points to 109.9 points. For the current quarter, the financial institutions are expecting another slight decline; the service providers are more optimistic.

Fewer job cuts at financial institutions / Employee growth among service providers remains constant

Job cuts at the financial institutions have eased slightly. The employee numbers sub-index therefore rises by 2.5 points to 98.7 points. An almost unchanged level of job cuts is expected in the current quarter. The service providers report stable employee growth, with the corresponding sub-index remaining unchanged from the previous quarter at 112.4 points. Employee numbers among the service providers are expected to increase slightly in the current quarter.

 

Frankfurt Finance Summit 2019: Navigating in Uncertain Waters

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Since 2011, the Frankfurt Finance Summit has been held annually in the Financial Centre Frankfurt. Under this year’s motto Navigating in Uncertain Waters, more than 200 high-calibre personalities from the domestic and international financial world came together on 18 June 2019 to discuss the topics:

  • Financial Centre Germany: Strategies for Succeeding in Rough Times
  • Artificial Intelligence (AI) in Finance: Superpower or Super Risk, Revolution or Buzzword
  • Connecting values: a digital finance hub for Europe
  • Post-election Europe facing Brexit: Securing stability for functioning markets

The participants represented a broad spectrum of the financial services industry – mainly decision-makers from central banks, stock exchanges, supervisory authorities, banks, insurance companies, politics, companies and academia.

Dr. Lutz Raettig, President of Frankfurt Main Finance, opened the Frankfurt Finance Summit with a warm welcome to all participants and speakers. After the welcoming speech by Dr. Philipp Nimmermann, State Secretary in the Hessian Ministry of Economics, Energy, Transport and Housing, Dr. Jörg Kukies, State Secretary in the Federal Ministry of Finance, took the floor. Dr. Kukies referred to the need to prepare as best as possible for all Brexit scenarios. Although great success had already been achieved in the implementation of important measures, Europe had so far failed to reach a European agreement on a Sustainable Finance taxonomy. A European agreement, however, remains extremely important for a sustainable financial system.

Financial Centre Germany: Strategies for Succeeding in Rough Times

During the first panel discussion, a survey of the audience revealed that the majority of Summit participants believe that the future of the German banking sector lies in Europe. This view was also shared by the German head of BNP Paribas Paribas Lutz Diederichs. In his opinion, the German banking sector is not dependent on the domestic market, but strongly internationalised. Prof. Dr. Isabel Schnabel, Professor of Financial Market Economics at the Rheinische Friedrich-Wilhelms-Universität in Bonn, also confirmed this trend. She highlighted the weaknesses of the euro structure and confirmed that Germany needed more reforms in this respect. Cornelius Riese, co-chairman of DZ Bank, spoke in favour of a more comprehensive strategy. In addition to market capitalisation, factors such as culture and stakeholder interests are essential metrics for assessing the financial system or a financial institution.

Artificial Intelligence (AI) in the Financial Industry: Superpower vs. Super Risk, Revolution or Phrase

The discussion continued with a discussion on the use of artificial intelligence in the financial industry in which Prof. Dr. Martin Hellmich, Partner at Deloitte, Carsten Mürl, Director Product Management at Mastercard, Dr. Holger Rommel, Head Research and Digital Transformation at ti&m, Vahe Andonians, Senior Lecturer at the Frankfurt School of Finance & Management, and Chris Boos, founder of Arago, participated. First and foremost, Chris Boos, an AI pioneer from Germany, cleared up prejudices about the topic. The general fear of AI is completely unfounded. Although AI has developed even more rapidly in the last five years than the last 50 years combined, man would not be dominated by the machine in the future. Accordingly, understanding and trust are the decisive keys to the use of AI in the financial industry.

Connecting values: a digital financial hub for Europe

During the subsequent power talk between Prof. Dr. Joachim Wuermeling, Member of the Board of Deutsche Bundesbank, and Hubertus Väth, Managing Director of Frankfurt Main Finance, the Financial Centre Frankfurt was closely examined. Prof. Wuermeling stated that after the Brexit referendum a competition was triggered between European financial centres in advertising for business, jobs and employees from London. It wasn’t just about who got a piece of the cake, but how big it was. The Financial Centre Frankfurt had to decide whether it wanted to take over a cooperative or a competition-oriented approach. His advice would be to follow the cooperative approach, since cooperation could win a bigger piece of the cake. Wuermeling also expressed confidence that Frankfurt would assume leadership in the European finance sector five years after Brexit.

Post-election Europe facing Brexit: Securing stability for functioning markets

In the concluding panel discussion, John Berrigan, Deputy Director General of the EU Commission, similarly advocated a banking union. This could increase the EU’s weight at the global level. With regard to Brexit, Mr Berrigan said that all those involved should do everything in their power to minimise the risks as far as possible. Matthias Graulich, member of the Executive Board of Eurex Clearing AG, cited the indispensability of incentives so that each individual would be motivated to contribute to stability. Felix Hufeld, President of the Federal Financial Supervisory Authority (BaFin), drew attention to the general fatigue surrounding the issue of Brexit. Although Brexit is complex and unpredictable, he also warned against viewing the world only through the lens of Brexit. After all, it was not about London against the rest of the world. Looking back on the developments of the past years, according to Felix Hufeld it should not be forgotten that in the financial sector at the European level many important improvements were made in a very short time.

The 9th Frankfurt Finance Summit ended with a summary of the day’s keynote speeches and a closing remarks by Michael Speth, Member of the Board of DZ Bank.

  • Dr. Lutz R. Raettig, Chairman of the Executive Committee, Frankfurt Main Finance e.V

  • Dr. PhilippNimmermann, State Secretary, Hessen Ministry of Economics, Energy, Transport and Housing

  • Dr. Jörg Kukies, State Secretary, Federal Ministry of Finance

  • Prof. Dr. Uwe StegemannSenior Partner, McKinsey & Company, Lutz Diederichs, CEO, BNP Paribas Germany

  • Prof. Dr. Isabel Schnabel, Member of the German Council of Economic Experts, Professor of Financial Economics, University of Bonn

  • Frank Strauß, Member of the Management Board, Head of Private & Commercial Bank, Deutsche Bank

  • Dr. Cornelius Riese, Co-Chief Executive Officer, DZ BANK AG

  • Inken Schönauer, Editor-in-Chief, EURO FINANCE magazin, Chris Boos, CEO & Founder, arago

  • Vahe Andonians, Senior Lecturer, Frankfurt School of Finance & Management, Chris Boos, CEO & Founder, arago, Prof. Dr. Martin Hellmich, Partner, Deloitte, Carsten Mürl, Director Product Management, Mastercard, Dr. Holger Rommel, Head Research & Digital Transformation, ti&m

  • Prof. Dr. Joachim Wuermeling, Member of the Executive Board, Deutsche Bundesbank, Hubertus Väth, Managing Director, Frankfurt Main Finance e.V.

  • Stephan Lutz, Partner, Capital Markets Leader, PwC Germany, John Berrigan, Deputy Director General Directorates B, C, D and E, DG Financial Stability, Financial Services and Capital Markets Union, European Commission, Maria Demertzis, PhD, Deputy Director, Bruegel, Matthias Graulich Member of the Executive Board, Eurex Clearing; Global Head of Fixed Income, Funding and Financing Strategy and Development, Deutsche Börse Group, Felix Hufeld, President, Federal Financial Supervisory Authority (BaFin), Boštjan Jazbec, PhD, Member of the Board and Director of Resolution Planning and Decisions, Single Resolution Board

  • Ram Shoham, Founder of Accelerator Frankfurt and Andreas Glänzel, Managing Director of Frankfurt Main Finance

  • Michael Speth, Member of the Executive Board, FIRM; Member of the Executive Board, DZ BANK

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“Navigating in uncertain waters”

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Speech by Dr. Philipp Nimmermann, Frankfurt Finance Summit, 18 June 2019

“Navigating in uncertain waters” was the title of this year’s Frankfurt Finance Summit. In his opening speech, Dr. Philipp Nimmermann, State Secretary at the Ministry of Economics, Energy, Transport and Housing of the State of Hesse, addressed four challenges arising from this topic: Artificial Intelligence, Climate Change and Sustainability and Brexit. Read the opening speech of the Frankfurt Finance Summit 2019 below:

Dr. Philipp Nimmermann, State Secretary at the Ministry of Economics, Energy, Transport and Housing of the State of Hesse

“The title of today’s summit, „Navigating in uncertain waters“, leaves us plenty of room for discussions. Please allow me to concentrate on three topics: Artificial Intelligence, Climate Change and Sustainability, as well as BREXIT.

Let me start with my personal political guiding principle, which helps me navigate in uncertain waters. It is an adaptation of the ethical imperative, the Austrian born Cybernetician and Physicist, Heinz von Foerster, once formulated. It goes like this: “I shall try to act always so as to increase society’s total number of choices”. But how do we keep our options open or even increase our choices? By remaining open minded and flexible, by not putting all our eggs in one basket, and by thinking in non-linear rather than linear terms.

If uncertainty is high or even increasing, if the world appears to be getting more and more complex, it probably helps to leave beaten tracks and to broaden ones mind, by using a new type of intelligence one has not used before.

So let’s talk about artificial intelligence: In my opinion, artificial intelligence is both a source of uncertainty as well as a method to navigate through uncertain waters. Yes it is true, that we cannot precisely predict how deeply machine learning and self-improving algorithms will actually change the world as we know it. But I do not think that one has to fear this development, at least as long as we share a common consensus that all technology, old or new, should always serve the people. That’s why I actually prefer the term “Augmented Intelligence” over “Artificial Intelligence”.

Machine intelligence can help us better understand big data and complex systems, e.g. by structuring previously unstructured data. By allowing so called “unsupervised machine learning” to help us identify clusters or anomalies we have not identified or thought of before, we can definitely broaden our choices.

So what is the State of Hessen, in this case, the Ministry for Economic Affairs, doing in this respect?

We initiated the foundation of the so called TechQuarter more than two years ago, as a start-up hub, especially for fintechs. This is the corner stone of our startup ecosystem-strategy. The current coalition treaty has also put a special focus on artificial intelligence and technological innovation.

Additional to expanding the TechQuarter, we want to establish a TechCampus with around 20 Professorships. With this lighthouse project, we want to help transforming the already excellent research successes in Hessen into applied technologies and startups.

Together with the TechQuarter and other interested partners, we want to establish an AI- and Big- Data-Lab, where researchers, supervisory bodies and fintech-start-ups can use big-data from various sources to develop and verify machine-learning tools. I am convinced, that this data-lab will significantly strengthen the Frankfurt financial centre.

Let me come to another source of uncertainty: climate change and sustainable development. There might be different views on whether climate change is man-made, or, on which measures are the right ones to slow down this development.

There might even be the question, whether the state should play an active role. But to all the doubters out there: Do you really want to take the responsibility for not having acted in a timely manner? What is your plan B, in case you have been wrong?

As long as we do not discover a Planet B, we should keep our options open or even increase future choices for subsequent generations. Hence, we should do everything possible to keep this planet alive and to foster an environmentally and socially sustainable development throughout the world.

Again, what are we doing in this respect?

With the Ministry for Economic Affairs being responsible, both, for implementing the so-called “Energiewende” in the State of Hessen and for Frankfurt’s role as a leading financial centre, we took an active role in the formation of the Green and Sustainable Finance Cluster Germany.

This cluster is a very important element of our strategy to transform this region in a truly green and sustainable financial centre, by helping to develop a common taxonomy and by defining common standards.

And we have already seen some success:

On a European level, two members of the cluster were selected to be part of the Technical Expert Group on Sustainable Finance, which supports the EU Commission in the implementation of the Action Plan.

On a national level, as recently as two weeks ago, the inaugural meeting of the advisory council on sustainable finance to the German federal government took place, chaired by Karsten Löffler, who is one of our cluster‘s executive directors.

And a few weeks ago, the majority of the state secretaries of the Länder Ministries of Economic Affaires voted in favour of a resolution, introduced by Hessen, which asked the federal government to develop general guiding principles for a sustainable finance sector in Germany.

We are looking forward to further developments in this direction and perhaps Jörg Kukies can elaborate on that subject later on.

Last but not least, there is the BREXIT. Or is it? We are all eagerly awaiting who will lead the UK out of the European Union. But we are prepared: Right after the BREXIT vote, we started an intensive exchange with the financial institutions and the non-financial corporates in Hessen. We traveled abroad to promote Hessen as an excellent business location, supportet by local stake holders and federal representatives such as Jörg Kukies, Sabine Mauderer and Joachim Nagel. Thank you very much again, for your support. I do not think we can do much more on that front. Life after BREXIT is difficult to predict.

But to keep our options open, we should keep our communication channels open and start discussing with our old and new partners in the UK, on how we all can manage the new situation for our mutual benefit.

Before that, I would like to wish you all an inspiring summit and fruitful discussions, which will certainly help us all to navigate in these uncertain waters.”

Titel photo: © HMWEVW – Oliver Rüther.

Photo of Frankfurt Finance Summit: © dfv Euro Finance Group GmbH I Photographer: Axel Gross

Eschborn for Business explores an interesting range of topics – Location Magazine 2019

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The 2019 edition of the magazine Eschborn for Business has been published. This year’s bilingual magazine, published annually by the Frankfurt Main Finance member, focuses not only on the title topic Pharmacy and Life Science as a growth industry in Eschborn, but also on the changes in the job market. Trainee marketing and the aspirations of the start-up scene play an important role here.

Pharma & Life Science: an efficient Health System for a balanced life

The importance of pharmacy and life science is growing – the healthcare sector has long been one of the main drivers of technological innovation. In this issue, you will find out why Eschborn is a key business location for pharmaceutical and life science activities in Hessen and what makes it particularly attractive for companies like Kaneka Pharma or Siemens Healthcare Diagnostics GmbH. “Hessen is one of the most efficient regions in Europe and is therefore also well ahead in international competition,” says Dr. Rainer Waldschmidt, CEO of Hessen Trade & Invest GmbH. The aim is to maintain and expand this innovative and fast-growing image of the region. Additional interesting interviews, reports and events on this title topic and the advantages of the city of Eschborn can be found on pages 6 through 9.

In addition to the ever more important health sector, marketing to junior staff and especially trainees are decisive factors for future-oriented transformations. This and the effects of economic networks are discussed in more detail in the section “Economy” (pages 20 to 37). The start-up economy is also attracting more attention. How the city of Eschborn, a Frankfurt Main Finance member, supports young companies and employers is also addressed in this section.

Diversity of the City of Eschborn

The magazine offers additional complex topics. How the compatibility of family life and career can be shaped in Eschborn and which improvements Mayor Mathias Geiger sees in the new exit off the A66, are examined more closely on pages 36 through 47.

The 2019 issue of Eschborn for Business also covers the various leisure activities. Find out more about restaurant recommendations or sports tips in the following articles.

  •  “Sports events for the whole family” – keeping the whole family on their toes
  • “Cosy Places, Ideas for Lunch Break” – Interesting Locations, Delicious Food
  • “With the job bike. Without traffic jams” – A cheap high-tech bicycle, also for leisure time
  • “Spectators from all over the world live” – The cycling classic Eschborn-Frankfurt

We hope you enjoy reading!

CFS Index shows a slight overall decline

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The CFS Index, which measures the business climate of the German financial sector on a quarterly basis, falls by 0.4 points to 112.4 points. This slight overall decline must be examined in its individual components. The revenue growth of financial institutions developed positively in the first quarter. By contrast, the service providers report a sharp decline here, although their expectations for the second quarter remain positive. The earnings growth of the financial sector declined in the first quarter, but here too there is continued optimism for the current quarter. Growth in the investment volume of financial institutions remains constant, with service providers reporting an increase. As expected, the financial institutions cut jobs in the first quarter and expect to make further reductions in the second quarter. The service providers, on the other hand, report a slight increase in employee growth.

“The combination of stable investments and employee numbers with rising revenues and earnings reveals a slight overall positive trend in productivity in the financial sector,” Professor Jan Pieter Krahnen, Director of the Center for Financial Studies, interprets the results.

The future international importance of the Financial Centre Germany is consolidating at a high level. The corresponding value falls by 3.6 points to 123.4 points. This decline is attributable to the assessment of the financial institutions. The relevant sub-index for this group is 14.8 points down on the previous quarter, at 113.2 points. Conversely, the assessment of the service providers is very positive. Their sub-index value rises by 7.7 points to 133.6 points.

Dr. Lutz Raettig, President of Frankfurt Main Finance e.V. emphasizes: “The prevailing opinion is that the Financial Centre Frankfurt will continue to grow in international importance. The slight decline of the index is just a logical reaction to the delay of Brexit.”

Revenue growth of financial institutions positive / Strong decline in revenue growth of service providers, although expectations remain positive

There are contrasting trends in the growth of revenues/business volume between the financial institutions and the service providers in the first quarter. The corresponding sub-index for the financial institutions rises by 2.3 points to 115.0 points, with further moderate growth anticipated. The revenues of the service providers are down 9.7 points on the previous quarter, at 111.2 points, although their expectations for the current quarter remain very positive.

Revenue growth declines, although optimism persists for the current quarter

Contrary to forecasts from the previous quarter, earnings growth declined in the first quarter. The financial institutions in particular find themselves in a weaker phase of growth, with the subindex falling by 7.5 points to 101.0 points, yet they expect the trend to turn positive in the current quarter. At 107.2 points, the sub-index of the service providers is 4.3 points below its level in the first quarter. As with their revenues, the service providers remain optimistic about their earnings performance in the current quarter.

Investment volume of financial institutions stable / Service providers report increase

The growth in investment volume in product and process innovations among the financial institutions is almost unchanged in the first quarter, at a moderate level of 112.0 points (-0.1 points). A slight decline in growth is expected in the second quarter. By contrast, the service providers report an increase in their investment volume in the first quarter. The sub-index rises by 2.6 points to 114.8 points. This level is expected to be maintained in the current quarter.

Increased job cuts at financial institutions / Slight upturn in employee growth among service providers

In line with expectations in previous quarters, the financial institutions are now cutting jobs. The employee numbers sub-index for the financial institutions fell accordingly by 4.3 points to 96.2 points. Further job cuts are expected in the second quarter. Growth in employee numbers among the service providers improved slightly. The corresponding sub-index rose by 0.9 points and is now at a healthy level of 112.4 points. The service providers anticipate further growth in the current quarter.

 

CFS survey on Green Finance

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In light of the growing debate over climate change and its consequences, sustainability considerations are also taking on greater importance in the financial sector. Under the headings “Sustainable Finance” or “Green Finance”, numerous initiatives have been launched to address the financial sector’s contribution to attaining climate goals. A recent survey by the Center for Financial Studies showed that the majority of the German financial industry (64%) believes that the financial sector could play a supporting role in achieving climate goals. Indeed, 17% of respondents would even attribute a major role to the financial sector. By contrast, 18% of those surveyed do not regard the financial sector as relevant to the climate goals.

“I see great opportunities for the Financial Centre Frankfurt to profit from the growing trend towards sustainable financial products as well as from trading in emission rights,” Professor Volker Brühl, Managing Director of the Center for Financial Studies, interprets the survey results.

Demand for sustainable investment products (e.g. green bonds) is on the rise. The majority of the financial industry (70%) believes that sustainability will be an important factor in how investors decide to allocate capital in the future. By contrast, 26% of respondents believe that sustainability considerations will not influence investment decisions.

On the issue of how much government influence should be exerted, the German financial industry is fairly unanimous (70%) that no government incentives such as tax relief should be offered for green bonds, nor should regulatory advantages such as lower capital requirements be granted to banks that do little or no business with companies harming the environment.

“Banking regulation should not be overloaded with climate policy goals. Firstly, the financial sector is already subject to a dense network of regulations. Secondly, looser capital requirements for environmentally friendly financing could lead to false incentives that jeopardize financial stability,” Professor Brühl adds.

Regarding the question of whether a company’s environmental impacts should be factored into banks’ corporate lending decisions (e.g. through ratings), opinions in the financial industry are rather divided. While 52% of respondents support this approach, 45% are opposed to it.

Hubertus Väth, Managing Director of Frankfurt Main Finance e.V., emphasizes: “The results clearly show that the time is ripe and sustainable products are in demand. In addition, they show that further government incentives are not necessary. This is an encouraging sign that today, sustainable products are already competitive.”

Highlighting the importance of a truly integrated financial market in Europe

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Jacqueline Mills, Managing Director and Head of the AFME office in Frankfurt

Jacqueline Mills, Managing Director and Head of the AFME office in Frankfurt

In May, AFME will be holding its first conference on the topic of supervision and financial integration – here Jacqueline Mills, Managing Director and Head of the AFME office in Frankfurt, explains why AFME decided to expand its footprint in Frankfurt and what topics will be on the agenda of the conference.

In February 2017, you opened an office in the Financial Centre Frankfurt to expand AFME’s European presence. Why did you choose Frankfurt?

AFME decided to extend its European footprint into Frankfurt two years ago by opening the local office in order to deepen its relationships with some of the key EU institutions, including the SSM, ECB, and ESRB, hosted by the city. Our focus is on ECB banking supervision since  many of our members are primarily supervised by the ECB and the ECB is also a direct supervisor for a growing number of entities belonging to our members with headquarters outside the Eurozone. As the heart of German finance, Frankfurt also provides us with a base to engage with local regulators, such as the BaFIN and Bundesbank, as well as other European organisations like EIOPA which are based here.

 What are the goals of the AFME, especially with regards to Brexit?

 As a pan-European trade association, we are dedicated to the promotion of deep and liquid European capital markets. We have well-established relationships across the EU27 and the UK. AFME aims to act as a bridge between market participants and policymakers across Europe, drawing on our strong and long-standing relationships, our technical knowledge and fact-based work. Especially our work concerning  Brexit draws on that approach. In particular, we have focussed on ensuring the decision-making community is aware of the potential cliff edge or no deal risks of Brexit.  Our work has contributed to the EU27 and individual Member States, including the UK, addressing many, if not all, of these issues. Of course, uncertainty remains, and we aim to help our members navigate this. If and when the UK’s exit becomes better defined, we will – on behalf of our members – contribute to shaping the future relationship for financial services between the EU27 and UK.

What will be the main topics covered by the conference held on May 23rd, 2019? For which target group is it suitable?

AFME members’ businesses span accross multiple global regions, thus connecting end-users with sources of capital and liquidity. Yet, the global banking industry is increasingly confronted with fragmentation along national and regional lines, which creates unnecessary rigidity and costs. At European level, the economic benefits of a truly integrated market for financial services are well understood, but progress remains slow.

The conference, which is our first one held in Frankfurt, will therefore address the interplay between the EU’s various Banking and Capital Market Union projects.   Furthermore, we discuss how moving forward with these initiatives is key to having a truly integrated financial market in Europe. The conference will also identify practical suggestions for achieving the European supervisory framework necessary to support these mutually reinforcing goals and consider how to enable greater cross-border supervisory cooperation. We hope that the event will provide food for thought for the next Commission’s mandate.

Among the highlights on the agenda are keynote addresses from Dr Jörg Kukies, State Secretary, German Ministry of Finance and ECB Vice President, Luis de Guindos. We also have a vast range of speakers, including representatives from the FSB, EBA, ECB, UK PRA and the US Federal Reserve Board in addition to industry leaders from a variety of capital market businesses around Europe.

You can register to attend the conference here.

 

”Welcome to the German Capital Market“ – new video lecture for capital market professionals from abroad

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Deutsche Börse’s Capital Markets Academy announced in a press release that it is offering a new video lecture for bankers and other capital market professionals from abroad. In 150 minutes, the participants are made familiar with the market structures and the legal framework of the German capital market.

The international markets share many similarities, nevertheless, each domestic market has its own special characteristics. The Capital Markets Academy’s new e-learning programme takes this up and is aimed at capital market professionals who are experienced in their home country but not familiar with the specific German conditions and regulations.

“Our video lecture offers a compact but precise introduction to bankers who are new to Germany and want to gain a good overview of the market structure as well as its rules and regulations,” explains Ulf Mayer, Head of Capital Markets Academy at Deutsche Börse.

The video lecture in English can be watched flexibly and independently of time and place. The content is divided into two parts: 1) market structure in Germany and 2) capital market law and regulation. The lecture lasts about two and a half hours and consists of ten chapters. The corresponding handouts can be downloaded. A certificate of attendance will be provided in the end.

Further information on the video lecture is available at www.academy.deutsche-boerse.com/e01.

The Capital Markets Academy is the training provider of Deutsche Börse Group. It offers first-hand stock market knowledge in interactive classroom events with a high practical relevance and digital learning formats. With a focus on trading, clearing and settlement, it is geared to the products and services offered by Deutsche Börse Group. Other financial market topics, such as the functioning of capital markets and new technologies such as blockchain, round off the offering.

For a future-proof financial system as a mainstay for competitiveness and employment in Germany – elements of a policy roadmap

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“Germany, Europe and the world face a fundamental transformation, posing a challenge that will need to be mastered by all spheres of policy, business and society. In view of global warming, change is inevitable in order to secure the livelihoods of some ten billion people by the mid-21st century on a sustainable basis. Designing such change will ensure a transition into a climatically compatible and sustainable social order.” Read more