The explosion of the equity markets during the pandemic raises the question of an eco-system that exacerbates the inequalities. At the core of it lies the over-indebtedness of governments who had gradually accepted to tax consumers and workers to the advantage of corporations. The interventions of central banks , through low interest rates and massive purchases of government debts, favored issuers -primarily governments- to the detriment of savings. It drove retirees without any form of revenue on their lifetime savings. This flow of liquidity found its way to the equity markets creating a second inequality between those who benefit from the bonanza of equity values and those who live precariously. Last but not least the share buybacks and dividends continued to increase the equity prices in favor of shareholders and top management. Behind these imbalances is the ideology of the shareholder value that needs to be reviewed to integrate ethics, equality and societal considerations.
This article – which is based on a presentation given on 28 October 2021 during a webinar organised by the Belgian Financial Forum – will first explain how energy efficiency of real estate exposures may be an important risk factor for the transition risk to which the Belgian financial sector is potentially exposed. As exposures to energy-inefficient buildings are likely to be more subject to transition risk, the article also shows why financial institutions need to gather information on the energy performance of their real estate exposures and incorporate this information in their risk management.
Global heating and climate change are major issues to be tackled. Physical and transition risks could heavily change our society and economy. To provide a sustainable future for generations to come, a big challenge lies ahead: the reduction of CO2 emissions of residential real estate, which counts for 13.8 % of the CO2 emissions in Belgium. Therefore, the current residential building stock needs to undergo major renovations to achieve the 2050 targets. The credit sector is very active and committed to enable this transformation and play a key-role when people buy or renovate their house. To facilitate this, it collaborates closely with, amongst others, local governments and European institutions.
Economists regard COVID-19 as a global and exogenous shock. In response, the EU set up a recovery plan consisting of grants and favourable loans to Member States over 2021-2026. The pandemic affected countries dependent on tourism more than the other countries. The recovery plan therefore involves an aspect of solidarity by providing grants and by taking into account both the initial vulnerability and the economic damage caused by COVID-19 in the Recovery and Resilience Facility allocation criteria for the grants. Thanks to these criteria, Italy and Spain are the main beneficiaries in terms of grants. Together with loans, this will boost their economic activity over the medium term more than in Germany, France and Belgium.
In exchange for EU grants and loans, all countries must submit Recovery and Resilience Plans describing the investments and reforms that they intend to carry out with a view to strengthening their economies. Belgium was expected to receive only € 5.9 billion worth of grants. This amount might even be substantially lower once the effective GDP losses for 2020 and 2020-2021 are known in spring 2022. Nevertheless, as a small open economy, Belgian GDP might benefit more from the Recovery and Resilience Plans implemented in Germany, France, Italy and Spain than from its own plan.
Energy and rent prices are currently soaring for European households, with such housing costs representing over 40% of the disposable income among the population earning less than 60% of the median national income, with peaks of around 60% in Greece and Germany.
Energy Efficient Mortgages (EEMs) can help reduce a property’s energy running costs by up to 50% and significantly contribute to financial stability thanks to lowered credit risk, through reduced probability of default and increased property value. Against this backdrop, since 2015 the EMF-ECBC has sought to promote a solution-oriented approach – the Energy Efficient Mortgages Initiatives (EEMI) and its concrete market application, the Energy Efficient Mortgage Label. This Initiative seeks to establish a comprehensive ecosystem from the origination of labelled energy efficient mortgages to green portfolios funded through capital markets, and therein meet evolving ESG criteria, consumer and issuer needs, and facilitate investors’ due diligence.
The book ‘Humanizing Strategy’ provides you with new insights; an unconventional approach on how to humanize your strategy and make it really work. Based on leading research, real stories, case studies and practical tools, I take you into the world of often hidden underlying motivational forces that influence individual and collective behaviors in organizations. I will show how dealing consciously and effectively with these human dynamics can significantly impact the performance of organizations and the successful realization of strategies.
Report of the intervention of Maria Demertzis, Deputy Director of Bruegel, during the Belgian Financial Forum webinar on “The road towards a ‘new’ financial system?” of 12 October 2021, written by Frank Lierman, Chairman of the Editorial Board of the Revue bancaire et financière. This report is further based on two opinion articles by Maria Demertzis, published by Bruegel in the course of 2021.
For years, PMV has had a special if not unique position in the investment landscape. When it was founded in 2001, PMV was entrusted with a societal role alongside its financial task. PMV is particularly pleased to note that today, social impact is also increasingly being pursued by private financiers, thus creating a major leverage effect.
The economics and finance magazine ‘Revue bancaire et financière/Bank- en Financiewezen’ celebrates its 85th anniversary and the first lustrum of the digital version. To mark this occasion, the review’s editorial board invited Belgian academics, researchers and policy makers to write an article on “The impact of COVID-19 on the Belgian economy and finance sector”. The result is a special printed edition containing 22 contributions, divided into 5 subtopics. This article summarizes the key-findings and messages.
This article contains the speeches from the Symposium for the publication of the book “Robert Triffin: A life”, on October 11, 2021 in Brussels.