Report of the speech given by Mr. Karel De Gucht, Belgian Minister of State and former European Commissioner for Trade, at the Belgian Financial Forum in Brussels, December 21, 2017, written by Frank Lierman, chairman of the Editorial Board of Bank- en Financiewezen-Revue bancaire et financière.
Op 9 mei 2018 overleed Jean-Paul Abraham, die gedurende vele jaren de onbaatzuchtige bezieler was van het Studiecentrum voor het Financiewezen, dat in 1992 werd omgevormd tot Belgisch Financieel Forum. Herdruk van een laudatio gepubliceerd in een Liber Amicorum dat in Bank- en Financiewezen nr. 8/1995 verscheen.
The objective of this contribution is to describe the regulatory and economic environment in which banks now operate, especially the new Basel III rules and the exceptional monetary conditions, to identify which lessons banks learned (and which not) after the financial crisis, and what banks will have to do in order to restore sustainable profitability.
Report based on the panel debate “Rebuilding trust in Banks: the role of Leadership”, Belgian Financial Forum, Brussels, 18 January 2018.
This article is composed of excerpts from the 2017 annual report of the National Bank of Belgium (“Report 2017 - Economic and financial developments, NBB, March 2018), the FSAP results and recommendations published by the IMF on 8 March 2018 (“Belgium : Financial System Stability Assessment”, IMF, March 2018) and the press release issued by the NBB at the time (IMF stress tests confirm that Belgian banks and insurance companies are able to withstand severe shocks, NBB, 8 March 2018).
Report of the speech given by Jeroen Dijsselbloem, former Chairman of the Eurogroup, at the Belgian Financial Forum on the 29th of January 2018 in Brussels.
In recent years, there was a broad-based recovery in Europe’s housing markets. Since the second half of 2016, a majority of EU countries are again recording annual house price increases of above 5%. The price rally has prompted public debate as to whether EU property markets are overvalued. In general, fundamental factors, such as disposable income, interest rates and demographics, can explain much of the recent rally seen in the EU28. The upturn can, in particular, be linked to the prevailing low interest-rate environment and to the economic recovery that started early 2013. Looking forward, the sustained positive growth environment will likely provide sufficient counterweight to rising interest rates. Therefore, further house price increases, albeit at a notably more modest pace than of late, are the most likely scenario for the coming years. The main risks facing Europe’s housing markets are to emerge in circumstances where there is: (1) a severe growth slowdown combined with rising unemployment, (2) an unexpectedly strong and sudden increase in interest rates, and (3) a decline in popularity of real estate as an investment. Based on our assessment of valuation metrics and household indebtedness indicators, vulnerabilities to such shocks seem the largest in Sweden, Luxembourg and Austria.
Article based on lecture at Lecture at Aula Rector Dhanis, University of Antwerp, Belgium, December 12, 2017.
Both institutional and private investors can give priority to diversification, acquiring direct real estate on markets they know well, and operating (other) private and listed real estate vehicles in order to acquire greater exposure to those real estate markets with which they may be less familiar. Indeed, we deliberately embrace investments in REITs (or funds investing in REITs), as they provide access to the more international property markets. It is clear that listed real estate companies invest in real estate, but at the same time they operate in a market parallel to the physical real estate market, in other words the stock exchange.
Thus, property stocks can have different risks (volatility) and yield characteristics, especially in times of high inflation. Therefore, investors' attention at present needs to be focused on future dividend yields. We believe that, in the near future, investors will 'demand' a higher real total return (before leverage) to offset increased property risk. Stable or higher cap rates moderate the total return, reducing the increase in value. We assume that the total return (before financing) for most property markets will not exceed 10% this year.
Speech based on presentation at Belgian Financial Forum, Lichtervelde, November, 30, 2017.