ECRI Newsletter Nº 54, Summer 2017

Published in: 
Monica Monaco, Lei Pan, Karl Gray, Greg Van Elsen, Paul Thomalla, Martin Schmalzried

This edition includes an editorial by Sylvain Bouyon, as well as articles by Monica Monaco and Lei Pan. Special articles featuring our last FinTech conference held in May by Karl Gray, Greg Van Elsen, Paul Thomalla and Martin Schmalzried.


On the menu: recovery, financial inclusion and digitalisation

Author: Sylvain Bouyon, Research Fellow at CEPS/ECRI

So far, 2016 has been a busy year for ECRI, as the think-tank is publishing articles, organising events and leading research projects on three core topics: economic recovery, financial inclusion and digitalisation.

In his foreword to the latest Economic Forecast of the Commission, Mr Mario Buti provided a mixed picture of the European economy. In his own words, growth is admittedly firm amid continued support from macroeconomic policies, but there is so far no sign of an acceleration. To a certain extent, household retail finance has been mirroring these developments. On the back of economic recovery and significant monetary easing, the real outstanding amounts per capita of housing loans and consumer loans both increased in 2015 for the first time in years in the euro area (and should continue to do so in 2016). However, this recovery is still fragile and a reversal of the ECB’s monetary policy stance combined with deteriorating household confidence could quickly result in new contractions of the market.

In that context, ECRI continues its series of publications on the macroeconomic and microeconomic developments of household finance. For example, the analyses conducted last May in the ECRI commentary “Recent trends and developments in European Mortgage Markets” showed contrasted developments across the EU, revealed significant downward trends in the share of adjustable-rate mortgages (ARMs) in the last decade and emphasised the ambiguous role of spreads in that dynamic. Further macroeconomic/microeconomic publications in household finance will follow and will be soon combined with the 2017 edition of the ECRI Statistical Package. As highlighted by Mrs Lei Pan from ING in that Newsletter, some focus will be notably placed on intra-household decision making.

One of the main missions of retail finance is to support the economic recovery in a balanced way. At the core of this policy agenda remains the key question of financial inclusion. In an increasingly digitalised world that produces more and more personal data, the notions of financial inclusion, scoring and pricing need to be redefined, resulting in new issues to be addressed by policymakers. In the 2017 CEPS-ECRI-ECMI annual conference organised in May on Fintech, the impact of big data and digitalisation on financial inclusion was debated with several key stakeholders. The present Newsletter provides some elements of that debate with contributions from Karl Gray (Zurich Insurance), Greg Van Elsen (BEUC) and Martin Schmalzried (COFACE). In order to continue contributing to shape that debate, ECRI, in partnership with several consumer associations, will be organising a large conference on big data and financial inclusion in October.

Finally, ECRI is placing continuous focus on all issues related to Fintech. In September, it will launch a Task Force on cybersecurity in finance to discuss clouds, GDPR, EU labelling scheme for ICT security products, PSD2, NIS Directive, etc in order to design an action plan for policymakers (for further details click here). Two articles in that Newsletter from Monica Monaco (Trust EU Affairs) and Paul Thomalla (ACI Worldwide) provide a foretaste of the issues that will be debated during that Task Force.