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BFW digitaal 2022/03

  • Donderdag 10/3/2022
    Swyngedouw / Ben Hadj

    The purpose of a stress test for banks is straightforward: determine how much capital is required by a bank to navigate through a financial storm and continue to provide financing to the economy. The first EU-wide stress test was conducted in 2009 in the aftermath of the global financial crisis to restore confidence and has become since then an integral part of the supervisors’ toolbox. It helps assess financial vulnerabilities and provide market participants with comparable information. Thanks to the interaction with the supervisor, the stress test encourages banks to think about their own vulnerabilities and their exposure to tail events. The results feed directly into capital requirement given that stress tests are the main input to determine the pillar two guidance (P2G). In the future, supervisory stress tests might move towards a more extensive use of gradual data to increase efficiency and realism. The scope of the exercise should also be enlarged to cover climate risk in addition to the more traditional financial risks.

  • Donderdag 10/3/2022
    Gyntelberg / Passaro / Crnogorac / Schumacher

    In the aftermath of the 2008 Global Financial Crisis, supervisors have started performing stress testing exercises to assess the resilience of financial institutions to adverse financial and macroeconomic conditions. The EBA has so far conducted and coordinated five EU-wide stress tests. These have helped provide an assessment of banks’ vulnerabilities to periods of stress, foster transparency and make stress testing an integral element of both banking supervision and banks’ risk management. The results of the 2021 exercise confirmed the strength of banks capital positions even under a very severe scenario.  Going forward it is envisaged that the EU-wide stress will rely on a “hybrid” approach combining supervisory and banks’ own models to add operational efficiency. The incorporation of new risks such as cyber and ESG risks into stress testing is a priority but also a challenge. This will require the use of new data, modelling and risk management skills for both banks and supervisors.

  • Donderdag 10/3/2022
    Van Rijsseghem / De Wilde

    In a context which is increasingly volatile and unpredictable, with new challenges emerging on a continuous basis, it is important that both banks/financial institutions and supervisors keep a good view on possible, more or less likely outcomes so that they are prepared by building a more resilient financial sector. By being prepared for different outcomes banks can safeguard their future capital base in a way that allows them to continue their activities such as lending to the economy. Stress testing is a key tool in this respect and its importance will only grow.

  • Donderdag 10/3/2022

    So many reasons why investing in gender balance and inclusion make sense. In this short article Claire Godding, in charge of Diversity & Inclusion at Febelfin, explains those reasons, as well as some simple actions every company can implement: it starts with measuring, and making role models more visible. The Women in Finance Belgium initiative is unique, showing results 3 years after the first signing of the Charter. Finally the article summarizes simple actions that you can take to contribute to inclusion as an employee, and a few advices for every company who wants to build an action plan.

  • Donderdag 10/3/2022
    Piton / Nautet

    Despite a strong convergence in employment rate between men and women, being a mother is still associated with a penalty on the labour market. Motherhood reduces the probability of being employed (mainly for low-educated women) and raises the use of part-time (in particular for highly educated women). Chances to get a managerial position or a job with supervisory responsibilities are therefore narrowed. Conversely, fatherhood is neutral or even an advantage for men’s career. Policies aiming to facilitate work-life balance generate adverse effects on women’s career. While both men and women are eligible, the use of these schemes remained mothers’ choice. Current gender norms lead to the persistence of traditional male and female roles and therefore hinder social progress. An equally shared parental leave could contribute to a fairer picture, just as more affordable and available childcare. Raising young women's awareness about the consequences of their educational and career choices would also certainly help to increase women emancipation.