Oliver Wyman study on the effects of the corona pandemic

Source: www.oliverwymanforum.com

“The coronavirus pandemic strikes at some of the central features of urban living. The disease has taken a heavy toll on major cities like New York City, Madrid, and Sao Paulo, and efforts to stop its spread with lockdowns and social distancing raise questions about the density of human activity and interaction that have long drawn people to cities. Now growing numbers of people in the United States and United Kingdom are looking to move or have already done so, and many have changed their criteria for deciding where to live, according to new research from the Oliver Wyman Forum.

A survey of 1,100 Americans found that two percent of respondents have permanently or temporarily relocated because of COVID-19, while another 14 percent are planning to relocate or leaning toward doing so. Affluent respondents were the most mobile, as three percent of respondents with incomes of more than $120,000 have already relocated. Urban residents, renters, and younger respondents were the most likely to be planning or considering a move.”

A detailed overview and discussion of the study results can be found on the Oliver Wyman Forum website.

Football still underestimated as a location factor – Guest article by Dr. Lutz Raettig and Hubertus Väth in Börsenzeitung

The ball’s rolling again. After the coronavirus has kept players off the pitch for more than two months, the Bundesliga’s reopening a few matchdays ago sparked controversy and emotionally charged discourse. Videos quickly spread showing players disregarding all rules for “social distancing” and minted once revered stars as negative role models.

Read more

First Virtual Food for Thought Event with Bryan Stirewalt

To what extent does the Covid19 crisis influence the development of new technologies? What impact does the home office have on the work of a regulatory authority? These and other questions were the focus of our first Virtual Food for Thought webinar this morning with Bryan Stirewalt, CEO of the Dubai Financial Services Authority (DFSA). The Virtual Food for Thought event series is the digital version of the established Financial Centre Breakfast series.

This morning Andreas Glänzel, Managing Director of Frankfurt Main Finance, welcomed the participants of the first Virtual Food for Thought webinar. He himself was connected live from the FMF office in Frankfurt. Speaker Bryan Stirewalt was connected live from his office in Dubai. His speech titled „Today’s disruptions, tomorrows opportunities. How disruption will shape the future of finance“ focused on the the development of new technologies and their implementation in the context of the Covid19 crisis but also on the question how does a regulatory authority works from home?

https://twitter.com/FMFdigital/status/1268443445145874433

https://twitter.com/FMFdigital/status/1268448819882143745

Upcoming Virtual Food for Thought with Philip R. Lane, Member of the ECB’s Executive Board

No sooner has the first Virtual Food for Thought webinar been successfully completed than the next webinar is already being planned. We are pleased to welcome Philip R. Lane, Member of the Executive Board of the ECB, as our speaker at the upcoming Virtual Food for Thought webinar on 24 June 2020! In his speech he will talk about the monetary policy of the ECB. We will distribute a free registration link via our social media channels within the next days – stay tuned!

About DFSA

The DFSA is the independent regulator of financial services conducted in or from the Dubai International Financial Center (DIFC), a purpose-built financial free zone in dubai, uae.

The DFSA’s regulatory mandate includes asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, an international equities exchange, and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for supervising and enforcing anti-money laundering (AML) and counter-terrorist financing (CTF) requirements applicable in the DIFC.

Good advice in the pandemic: The hour of the economists (Comment by Gerald Braunberger)

With conspiracy murmurs, verbal witch hunts, muffled roars and other forms of escapism, neither crises nor their aftermath can be meaningfully combated. Progress is more likely to be found through expertise and the willingness to discuss old and new findings in a meaningful and open-ended manner.

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Refinitiv Webinar

Compliance and Sustainability – Value creating third-party risk programmes

Webinar description: “Following a survey of 1,800 global third-party risk professionals, we are hosting a two-part webinar series to review the findings – focusing on the relationship between compliance and sustainability, and the impact on third-party risk programmes.

In the first webinar we explored the reasons to review third-party risk programmes, and in the upcoming webinar on Tuesday 26th May we will discuss practical aspects of how to turn third-party risk programmes into centres of value creation.

  • What are the expectations of investors in terms of the supply chain and third party risk networks?
  • How can we efficiently incorporate ESG concerns into third-party risk programmes?
  • How can we introduce automation in workflows and research given the growing complexity of supply chain networks?”

Webinar

Date:   26th May

Time:  14:00 BST| 15:00 CEST

Please register – https://refini.tv/2TebD8W –  if you would like to attend this webinar. If you are interested but you’re unavailable, register and Refinitiv will send you the webinar recording.


 

German-British Chamber of Industry & Commerce Webinars

The German-British Chamber of Industry and Commerce invites you to a webinar series and online discussions.

It starts with the topic “UK – The Corona-crisis and the impacts on Brexit” on friday, May 15th 2020, 8.00am UK time. Read more

Deutsche Bundesbank – Learning from European cooperation in the field of financial stability

The Corona pandemic exposes the fragilities of our societies and economies. Policymakers at all levels are taking decisive action to protect firms and households. Common European action is highly desirable and feasible. We need to evoke the positive forces that give us strength. We need to find pragmatic solutions. European cooperation is indeed working better than often claimed. Financial stability is a prominent example: a lot has been achieved since the global financial crisis. We can be proud of these developments and learn from this experience.

Many people are asking themselves “what is the EU doing to tackle the crisis?” In our policy field, financial stability, a lot is being done.

A well-functioning financial system is not an end in itself. It is there to make the economy work; to foster sound investment and saving; to ensure safe and efficient payments.

Prior to the outbreak of the pandemic, the resilience of the banking sector had been strengthened, thanks to the reforms of the past decade. European and national supervisors have now been able to release buffers of capital and liquidity in order to allow banks to lend more. Supervisors also recommended to financial institutions not to finance payouts, in order to increase their resilience. All this has been done by exploiting flexibility in the rules; it does not mean reversing the reforms, which have made banks more robust ahead of the crisis.

In line with their responsibilities and mandate, the ECB and national central banks have acted promptly and decisively to avoid a downward spiral in price expectations and to ensure a smooth flow of liquidity to firms and orderly conditions on markets.

 

Read the full guest contribution at: https://www.bundesbank.de/en/press/contributions/learning-from-european-cooperation-in-the-field-of-financial-stability-832294.

 

Lockerungen der Corona Maßnahmen in Hessen: Kinder auf dem Spielplatz

Hessian state government decides to open hair salons, playgrounds and cultural facilities

Minister President Volker Bouffier: “We are easing restrictions where we can justify them.”

The state government of Hesse decided today to relax corona restrictions following a video conference with Chancellor Angela Merkel and the ministers president on Thursday, 30 April 2020. Beginning on 4 May 2020, hair salons and barbershops, museums and zoos, among others, will be permitted to open in Hesse, subject to social distance and hygiene rules. Playgrounds may also be used again.

“We are far from being over the pandemic. For this reason, protecting the health of our citizens still remains our top priority. We are staying the course and we are easing restrictions where we can justify them. Competition between the states to see who can return to normality the quickest will not help anyone. We are moving forward step by step and in a prudent manner. At the same time, we want to give people an outlook for the future,” Minister President Volker Bouffier said in Wiesbaden.

The following will be permitted to open in Hesse as of 4 May 2020, subject to social distance and hygiene rules:

    • Playgrounds
    • Museums, exhibitions, castles and memorials, under the specification, that use is of an individual nature. Group activities or tours may not be offered. As a guideline, one person should be allowed per 20 square metres.
    • Animal parks, zoos and botanical gardens
    • Dog groomers and dog schools
    • Copy shops
    • Driving schools, music schools and private lessons (for individual lessons and small groups up to five people)
    • Hairdressers and other personal care services such as cosmetic and nail salons, tattoo parlours, and massage practices. Providers must wear a mouth and nose covering for the entire duration of customer contact. Mouth and nose coverings are also mandatory for customers. These may only be removed if the services can only be rendered without said covering.
    • Previously prohibited elective medical operations and surgeries in clinics and outpatient practices, may be performed.
    • In all health care facilities, such as hospitals and doctors’ offices, mouth and nose coverings must be worn. This obligation also applies in shopping streets and covered shopping centres.
    • Classroom training will be resumed in the training of civil servants and employees in the public sector, when completion was planned for 2020. This also includes sports training and examinations.

On Wednesday, 6 May 2020, consultations between Chancellor Merkel and the leadership of the federal states entered the next round. The agenda included concepts for opening day-care centres, schools, sports facilities, restaurants and pubs, as well as the topic of trade. “I expect thorough and constructive discussions and hope that, wherever possible, we will be able to adopt uniform regulations and that citizens, especially families, will be given a clearer outlook for the future,” emphasised Minister President Bouffier.

 

*** Note ***

All ordinances are continuously published and updated on corona.hessen.de.

Unprecedented slump in CFS Index

The CFS Index, which measures the business climate of the German financial sector on a quarterly basis, slumps by -15.4 points to 98.8 points. This is the sharpest decline on record since the index surveys began in 2007 and the first time the index has fallen below the neutral line of 100 points since 2009. Expectations of the financial sector for the current quarter have turned especially bleak. Huge slumps in revenue, earnings and investment are expected, with service providers in particular anticipating an extreme decline in revenue and earnings, now also accompanied by job cuts. By contrast, the job cuts at financial institutions, which have been ongoing for some time now, remain almost flat, and the current quarter is not expected to bring as steep a decline as the other index values.

“There has never been such a severe deterioration in financial industry expectations of all the measured performance indicators – revenues, earnings, employee numbers, investment – since the survey began in 2007 – not even during the financial crisis of 2008. It would therefore appear crucial to pay the utmost attention to impacts on financial stability when pursuing rescue and recovery measures in reaction to the coronavirus pandemic – especially now that we have created a supervisory regime that makes a wholesale bailout difficult,” Professor Jan Pieter Krahnen, Director of the Center for Financial Studies, interprets the results.

Owing to the corona crisis, the future international importance of the Financial Centre Germany is also seen to be progressively declining. The corresponding sub-index falls by -5.8 points to 111.2 points and is now at its lowest level since 2012. The decline is increasingly driven by the assessment of the service providers. The relevant value for this group stands at 113.7 points, 7.8 points lower than in the previous quarter. The assessment of the financial institutions falls by -3.6 points to 108.8 points.

Dr. Lutz Raettig, President of Frankfurt Main Finance e.V., explains, “The slump in the rating of Germany’s future international importance as a financial centre is a result of the uncertainty surrounding, and not clearly foreseeable course of the global corona pandemic. In fact, Germany is considered to be on the cutting edge in managing the current crisis. The federal and state governments were able to rely on an efficient financial sector and get the billion-euro “corona protection shield for Germany” up-and-running in the shortest possible time without triggering negative reactions on the capital markets.”

Financial industry expects huge slumps in revenue, earnings and investment in the current quarter

The surveyed financial institutions and service providers report a significant decline in their revenues/business volume in the first quarter of 2020, with the corresponding index value dropping by
-8.2 points to 112.4 points for the financial institutions and by -13.8 points to 108.6 points for the service providers, relative to the previous quarter. With these figures for the first three months of 2020, each sector is still only 2.6 points below the previous year’s level. However, the financial industry is anticipating the sharpest drop in revenues since the surveys began in 2007 and an index value of well under 100 points for the current quarter.

The earnings of both groups developed in line with revenues in the first quarter of 2020. The corresponding sub-index for the financial institutions reached a level of 103.3 points after falling by
-8.0 points, but is still 2.3 points above the previous year’s level. The service providers report an extreme decline in revenue growth. The sub-index drops by -16.4 points to 106.4 points. Although this is still close to the previous year’s level for the first quarter, this group is anticipating an extraordinary slump to well under 100 points in the current quarter.

Growth in investment volume now below last year’s level

The growth in investment volume in product and process innovations in the financial sector also declined in the first quarter of 2020, but not to the same extent as the revenue and earnings figures. The corresponding sub-index falls by -6.9 points to 101.8 points for the financial institutions and by -4.5 points to 108.1 points for the service providers. The financial institutions are now 10.2 points below last year’s level, the service providers are 6.7 points below. With respect to the current quarter, the financial sector as a whole is expecting a strong decline in investment to a level well below 100 points. Among the service providers, however, the expected downturn in investment is less pronounced than the extreme revenue and earnings declines anticipated in this segment.

Financial institutions: job cuts almost flat in the first quarter / Current quarter slump should not be as severe as other index values / Service providers: jobs expected to be shed for the first time since 2009

Job cuts at the financial institutions, which have been ongoing for some time, are less severe in the first quarter of 2020 than in the previous quarter. The employee numbers sub-index rises accordingly by 0.7 points to 95.2 points, just 1 point under the previous year’s level. Although the service providers hired fewer employees in the first quarter of 2020 than in previous quarters, their employee numbers indicator remains in positive territory, at 105.5 points, after slipping by just -0.6 points. For the current quarter, the financial institutions are expecting a larger reduction in employee numbers, albeit less drastic than the anticipated declines in other index values. By contrast, the service providers are expecting to shed jobs for the first time since 2009.

 

 

The results are based on a quarterly management survey in the German financial sector.

The Center for Financial Studies (CFS) conducts independent and internationally-oriented research in important areas of Financial and Monetary Economics, ranging from Monetary Policy and Financial Stability, Household Finance and Retail Banking to Corporate Finance and Financial Markets. CFS is also a contributor to policy debates and policy analyses, building upon relevant findings in its research areas. In providing a platform for research and policy advice, CFS relies on its international network among academics, the financial industry and central banks in Europe and beyond.

CFS survey: “Effects of the corona crisis”

German financial industry expects economic impacts to exceed those of the 2008 financial crisis – Equity capital measures broadly welcomed

A CFS survey of financial industry executives shows that around 78% of the respondents expect the economic impacts of the corona crisis to be significantly more severe than those of the 2008 financial crisis.

So far the rescue measures adopted by the German government, amounting to around €750 billion, consist largely of special loans and loan guarantees.

Over 60% of the survey participants regard the measures taken by the Federal Government as appropriate, another 24% of those surveyed would like to see even higher levels of support, while just 12% consider the current package excessive. When asked what form the assistance should take, just under 80% of respondents said they would welcome more equity measures, in addition to the loan programmes, to prevent corporate debt levels from rising further. Only 13% of those surveyed are opposed to equity measures.

“The financial industry would surely give a strong boost to the acceptance of government support in the form of equity capital – this could prove crucial to securing and regaining financial stability in Europe,” explains Professor Jan Pieter Krahnen, Director of the Center for Financial Studies.

The respondents are divided on whether financial assistance should be coordinated on a Europe-wide basis, i.e. allocated according to shared standards. This is endorsed by 54% of the financial sector respondents and opposed by 41%.

The assistance programmes in Europe vary greatly in scale – large in Germany, small in Italy. Do these differences pose a threat to the European Monetary Union/eurozone in the medium term? Respondents clearly regard the disparity in the size of assistance packages in northern and southern Europe as the main threat to the eurozone – 85% see dangers looming here.

“Since the disparity in dimensions is far more strongly identified as a problem than a lack of international coordination of support programmes, this could provide an important insight for policy-makers. It is also in the self-interest of the northern countries to counteract the asymmetry of rescue packages at European level – whether the programmes are coordinated or not,” explains Professor Krahnen.

A large majority of financial industry executives (approx. 85%) see a risk of European Monetary Union stability being jeopardized due to the extensive support programmes at EU and individual member state level. Approximately 48% of the participants oppose the introduction of joint EU debt in the form of corona bonds, while around 23% could envisage them.
A remarkably high 30% of the survey participants do not hold a firm opinion on this issue.

Hubertus Väth, Managing Director of Frankfurt Main Finance e.V., emphasises, “The current crisis demands and promotes global coordination in the fields of medicine, science and business. Although global interconnectedness eased the rapid spread of the corona pandemic, it also plays a key role in solving the crisis, which will be done much faster through cooperation. This factor still receives too little attention.“

 

 

The results are based on a quarterly management survey in the German financial sector.

The Center for Financial Studies (CFS) conducts independent and internationally-oriented research in important areas of Financial and Monetary Economics, ranging from Monetary Policy and Financial Stability, Household Finance and Retail Banking to Corporate Finance and Financial Markets. CFS is also a contributor to policy debates and policy analyses, building upon relevant findings in its research areas. In providing a platform for research and policy advice, CFS relies on its international network among academics, the financial industry and central banks in Europe and beyond.