The EU Economic and Financial Committee’s (Ecofin) decision to suspend the Stability and Growth Pact’s (SGP) sanctioning mechanism, could place Europe’s entire fiscal framework in jeopardy, according to a report by Standard & Poor’s. ‘To all intents and purposes, the rules-based fiscal framework in Europe has virtually disappeared,’ said credit analyst Moritz Kraemer. ‘After [this] decision, it is hard to imagine how any future violations could possibly lead to a full application of the rules. Doing so would demonstrate such double standards that corrosive effects for the wider European agenda would be likely,’ he added. Ecofin’s decision could, in the long term, have negative consequences for sovereign ratings in the Eurozone, if reduced peer pressure to consolidate public finances leads to laxer fiscal policies, according to the ratings agency. The ‘AAA’ sovereign credit ratings on the Republic of France and the Federal Republic of Germany are unlikely to be affected because, despite current fiscal pressures in both countries, the trend in their public debt profiles is sustainable. However, in the longer term, the Ecofin decision may affect the ratings on other Eurozone sovereigns that depend more on external peer pressure for fiscal consolidation. The decision may prove to be the biggest blow yet against the architecture of fiscal coordination in Europe, as it seems to be at odds not only with the spirit, but also the letter, of the Maastricht Treaty. As a result, the convergence of fiscal performance and, indeed, sovereign credit ratings, in the Eurozone could come to a halt, and eventually even be reversed.
The annual BNP Paribas Cash Management University kicked off on Thursday morning with treasury professionals congregating in Paris from across Europe.
APIs may be a solution to MT940 challenges, says Karen Fagan, treasury operation manager, for British television company, ITV.
Kicking off the first day of the Singapore Fintech Festival, issues with cryptocurrencies were addressed by MIT media labs director, Joi Ito, and panels of technology leaders discussed how they’re using data analytics.
Sibos 2017 day two highlights: Brexit and banking, and why ‘data is the new oil’ in financial services
How nation first politics can impact global financial organisations It’s clear that data and regulation are the two key topics that are ... read more