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RBF numérique 2023/06

  • The EU Banking Sector – Navigating Challenges

    Jeudi 22/6/2023
    José Manuel Campa

    The elevated macroeconomic uncertainty due to subdued economic growth, inflationary pressures and increasing interest rates have brought into the forefront some risks in the global banking sector. In the aftermath of the banking crisis in the US and the takeover of Credit Suisse from UBS, EU banks are now confronted with a growing number of challenges. The article examines the level of preparedness of the EU banking sector to navigate these challenges taking into account the robust starting point of the EU banks.

  • From the New Normal to New Abnormal World: Banks' Risk Profile Shifts in the New Socio-economic Landscape

    Jeudi 22/6/2023
    Georges Hübner

    After a long period of low interest rates, many European banks have let their business model evolve towards a greater diversification of revenues and lower interest rates protection. The sector has proven its resilience during the Covid-19 and the geopolitical crises. Nowadays, with the simultaneous surge of inflation and consciousness about environmental dangers, banks are confronted with an unprecedented challenge. They have to cope with re-emerging or original sources of financial risks. These include stock market risks (due to their off-balance sheet asset management activities), funding risk (due to the pass-through of the rising interest rates on liabilities), ESG risks (on the valuation of the banks’ assets), and credit risk (due to the cost of the climate transition and the tension between the ‘E’ and the ‘S’ dimensions). This will increasingly lead banks to move away from comfortable risk management tools, and develop competences and approaches to deal with uncertainty, potentially for a long period of time.

  • Coming Down to Earth: How to Tackle Soaring Public Debt

    Jeudi 22/6/2023
    Alexandre B. Sollaci

    This paper examines policy options for reducing debt ratios, including the effects of fiscal consolidation and debt restructuring. We find that adequately timed and designed fiscal consolidations have a high probability of durably reducing debt ratios. In addition, the impact of restructuring on debt ratios is sizable and long lasting but can be affected by operational details and institutional features.

  • Hoe houdbaar zijn de de financiën van de federale overheid en de gewesten en gemeenschappen in België?

    Jeudi 22/6/2023
    Stefan Van Parys / David Cornille / Marjolein Deroose / Hervé Godefroid / Wim Melyn / Patrick Stiglhamber

    The debt ratios of the federal government and the various regions and communities in Belgium have risen substantially in recent years and, in general, they are set to increase further. This raises the question of how sustainable public finances truly are. The article investigates this by way of a regional debt sustainability analysis covering medium-, short- and long-term risks. It also assesses to what extent debt levels and dynamics will be impacted by negative growth shocks, rising interest rates and higher public investment. Finally, it explores how a national debt ceiling could be distributed across the various government entities and what fiscal efforts would be required at each level.