How would you rank the Rencontres économiques d`Aix-en-Provence on the international stage − as the Provence version of Davos?
I would describe it as an important meeting place for stimulating discussions on economic issues, similar to the forum on central banking hosted by the European Central Bank in Sintra, Portugal, every year for the last ten years, or its US equivalent in Jackson Hole. You mentioned Davos, but I think Davos is less exclusively focused on economic topics, which is hardly surprising given that this event in Aix-en-Provence is organised by the Cercle des économistes think tank.
What impact do the Rencontres have on the region?
You spoke of Davos to refer to the World Economic Forum. While the name of the Forum is well-known, it’s perhaps more often referred to by the name of the Swiss resort Davos. Locations are significant, just as Aix-en-Provence is for the Rencontres. I also think there’s a lasting bond between Aix-en-Provence and the Rencontres, offering an opportunity for the city and the region, as no-one can question the benefits it will bring to both, as indeed also to the Cercle des économistes, which has such a historic and inspiring setting for its proceedings. But I can imagine that it also presents quite a challenge as you have to live up to the success of the previous event every year anew.
You will be speaking this evening about the role of women. What are you going to tell the audience?
First and foremost that my priority is to maintain price stability. But that does not stop me from defending a cause that has been close to my heart for more than 40 years now. A cause which is in fact intricately linked to the economy – considering that it’s often women who decide on household purchases, even the biggest ones. On this all-woman panel, moderated by Emmanuelle Auriol, and including Laurence Boone and Louise Mushikiwabo, I will focus on the economic aspects, on women’s contribution to the economy. And why we should deplore the lack of progress on these issues and come up with solutions to remedy the situation.
How would you describe their contribution?
We can describe it in three ways. First, it lags behind when compared with the contribution made by men. Second, it is ignored. “Housework”, which is by and large done by women, is not factored into measures of wealth production, such as gross domestic product. Lastly, it is poorly paid. This is not just because women are still paid less than men [for doing the same job]. It is also because of the housework issue I just mentioned, and also because many women worldwide perform undeclared work.
How can we change this?
First, many countries have passed laws to fight discrimination and prevent gender pay gaps, but they are not being applied enough. Second, we need to develop the infrastructure or programmes that enable parents – not just women – to look after their children. France does comparatively well on this front. Third, we need to fundamentally change our ways. We need to stop thinking that only women can take care of having their children vaccinated or of making sure they do their homework. To take just one example [of such changes], society and employers should also encourage paternity leave.
Is inflation under control at last?
It has started to decline, falling from double-digits at the start of the autumn of 2022 to half that today, at 5.5% for the euro area as a whole in June. French figures are slightly weaker. This is due in particular to the fall in commodity and energy prices, and I think also to the initial impact of our monetary policy decisions on prices. Food prices are also rising at a slower pace. But inflation is still higher than our medium-term target of 2% and according to our staff projections, is set to remain so in 2024 and 2025. We therefore still have work to do to bring it back down and reach our target.
What about economic growth?
Growth has been flat in the last two quarters, with very slightly negative growth in the fourth quarter of 2022 (-0.1%) and zero growth in the first quarter of 2023. We estimate euro area growth to be around 0.9% in 2023, with the figure for France being very slightly lower, but we should see a return to potential growth over the period 2024-25.
Can firms increase wages as called for by their employees?
The recent period of high inflation was not accompanied by a reduction in firms’ profit margins, which even increased in some cases – particularly when demand for goods and services outstripped supply. At the same time, wages have also risen by more than expected. In the current context, it is important to know whether firms are going to reduce their margins a little to meet their employees’ expectations of higher wages and to restore some of their purchasing power, which is what has normally happened during previous high inflation episodes, or whether we are going to see a twofold increase – in margins and in wages. A simultaneous increase in both would fuel inflation risks, and we would not stand idly by in the face of such risks.
How can France reduce its debt?
All euro area countries saw their debt increase during the pandemic. Now that the health crisis is behind us and energy prices have fallen, a number of support programmes need to be withdrawn, such as the French energy tariff shield, and public finances need to be put on a path that will make it possible to reduce debt at a steady pace. And that is something that all countries can do.
Compliments of the European Central Bank.The post Interview with Christine Lagarde, President of the ECB, conducted by Geneviève Van Lède on 5 July 2023 first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

A key structural vulnerability from asset management activities is a potential mismatch between the liquidity of fund investments and the redemption frequency of fund units in open-ended funds.
In 2017, the FSB published policy recommendations to address structural vulnerabilities in asset management activities. The recommendations relating to liquidity mismatch (“FSB Recommendations”) aimed to:

strengthen regulatory reporting and public disclosure to facilitate assessment of liquidity risk in OEFs;
promote liquidity management both at the fund design phase and on an ongoing basis;
widen the availability of LMTs and use of LMTs in stressed market conditions; and
promote fund-level and system-wide stress testing.

IOSCO operationalised most of the FSB Recommendations through its Recommendations for Liquidity Risk Management for Collective Investment Schemes in 2018 and a set of related good practices.
In 2022, as part of its work programme to enhance the resilience of non-bank financial intermediation, the FSB assessed the effectiveness of the FSB Recommendations. This consultation report responds to the findings of the assessment report by proposing revisions to relevant parts of the FSB Recommendations.
The proposed revisions incorporate lessons learnt since 2017 and aim to enhance clarity and specificity on the intended policy outcomes to make the Recommendations more effective from a financial stability perspective.
The revised FSB Recommendations should be read in conjunction with the proposed International Organization of Securities Commissions (IOSCO) guidance on anti-dilution liquidity management tools (LMTs).
The goal of the revised FSB Recommendations, combined with the new IOSCO guidance on anti-dilution LMTs, is a significant strengthening of liquidity management by OEF managers compared to current practices.
The FSB invites comments on this consultation report, including supporting evidence where available. The FSB and IOSCO are holding a public outreach event on Wednesday 12 July from 11:00-16:00 (CEST), where they will provide an overview of the main proposals in their respective consultations and participants can provide their early feedback. Further details can be found on the right-hand side of the page.
Written responses should be sent to fsb@fsb.org by 4 September 2023 with the title “Revised OEF Recommendations”. Responses will be published on the FSB’s website unless respondents expressly request otherwise.
The final report, which will incorporate feedback from the consultation, will be published in late 2023.
Main Amendments to the 2017 FSB Recommendations:
Recommendation 3 – to provide greater clarity on the redemption terms that OEFs could offer to investors, based on the liquidity of their asset holdings. This would be achieved through a proposed bucketing approach, where OEFs would be grouped into different categories depending on the liquidity of their assets. OEFs in each category would be subject to specific expectations in terms of redemption terms and conditions.
Recommendation 4 – to ensure availability of a broad set of anti-dilution and quantity-based LMTs for use by OEF managers in normal and stressed market conditions.
Recommendation 5 – to achieve (i) greater inclusion of anti-dilution LMTs in OEF constitutional documents and (ii) greater use, and greater consistency in the use, of these tools in both normal and stressed market conditions. The objective is to mitigate potential first-mover advantage from structural liquidity mismatch in OEFs by imposing on investors the costs of liquidity associated with fund redemptions and subscriptions.
Recommendation 2 – to require clearer public disclosures from OEF managers on the availability and use of LMTs in normal and stressed market conditions. This aims to enhance investor awareness on the objectives and operation of anti-dilution LMTs.
Compliments of the Financial Stability Board.The post FSB | Addressing Structural Vulnerabilities from Liquidity Mismatch in Open-Ended Funds – Revisions to the FSB’s 2017 Policy Recommendations: Consultation report first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Today, the Commission is proposing rules to make producers responsible for the full lifecycle of textile products and to support the sustainable management of textile waste across the EU. This initiative will accelerate the development of the separate collection, sorting, reuse and recycling sector for textiles in the EU, in line with the EU Strategy for Sustainable and Circular Textiles. Increasing the availability of used textiles is expected to create local jobs and save money for consumers in the EU and beyond, while alleviating the impacts of textile production on natural resources.
The Commission is proposing to introduce mandatory and harmonised Extended Producer Responsibility (EPR) schemes for textiles in all EU Member States. EPR schemes have been successful in improving the management of waste from several products, such as packaging, batteries and electric and electronic equipment. Producers will cover the costs of management of textile waste, which will also give them incentives to reduce waste and increase the circularity of textile products – designing better products from the start. How much producers will pay to the EPR scheme will be adjusted based on the environmental performance of textiles, a principle known as ‘eco-modulation‘.
Common EU extended producer responsibility rules will also make it easier for Member States to implement the requirement to collect textiles separately from 2025, in line with current legislation. The producers’ contributions will finance investments into separate collection, sorting, re-use and recycling capacities. The proposed rules on waste management aim to ensure that used textiles are sorted for reuse, and what cannot be reused is directed to recycling as a priority. Social enterprises active in the collection and treatment of textiles will benefit from increased business opportunities and a bigger market for second-hand textiles.
Today’s proposal will also promote research and development into innovative technologies for the circularity of the textiles sector, such as fibre-to-fibre recycling.
The proposal also addresses the issue of illegal exports of textile waste to countries ill-equipped to manage it. The new law would clarify what constitutes waste and what is considered reusable textiles, to stop the practice of exports of waste disguised as being done for reuse. This will complement measures under the proposal for a new Regulation on waste shipments that will ensure that shipments of textile waste only take place when there are guarantees that the waste is managed in an environmentally sound manner.
Today’s proposal for a targeted revision of the Waste Framework Directive also includes measures concerning food waste, detailed in a separate Q&A.
Next steps
The Commission proposal on a targeted amendment of the Waste Framework Directive will now be considered by the European Parliament and the Council in the ordinary legislative procedure.
Background
The EU generates 12.6 million tonnes of textile waste per year. Clothing and footwear alone accounts for 5.2 million tonnes of waste, equivalent to 12 kg of waste per person every year. Currently, only 22% of post-consumer textile waste is collected separately for re-use or recycling, while the remainder is often incinerated or landfilled.
The Waste Framework Directive is the EU’s legal framework for waste management in the EU. It sets the definitions related to waste management, including definitions of waste, recycling and recovery, the waste hierarchy and basic concepts.
Today’s initiative delivers on the Commission’s commitment made in the EU Strategy for Sustainable and Circular Textiles to propose measures to harmonise Extended Producer Responsibility rules for textiles, and to develop economic incentives to make textile products more sustainable and circular.
Compliments of the European Commission.The post Circular economy for textiles: taking responsibility to reduce, reuse and recycle textile waste and boosting markets for used textiles first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

https://ogletree.com/seminars/2023-10-12/immigration-insights-symposium-4/

Today marks the conclusion of Sweden’s Presidency of the Council of the European Union. One of the top priorities in the domain of justice has been to contribute to international efforts to ensure accountability for the crimes committed in Ukraine. Eurojust and the Swedish authorities have worked closely together over the past six months and taken important steps towards this common goal.
Intensifying efforts to work against impunity for core international crimes was also the theme of this year’s EU Day Against Impunity, which was organised by the Swedish Presidency together with the European Commission, Eurojust and the Genocide Network Secretariat, hosted at the Agency.
The focus has also been on the fight against organised crime. At the end of January, Eurojust was invited by the Swedish Presidency to present its work and operations at the informal meeting of EU Justice and Home Affairs Ministers in Stockholm.
In May, for the first time, Eurojust hosted an informal meeting of the Coordinating Committee in the area of police and judicial cooperation in criminal matters (CATS). The focus was on the fight against impunity regarding crimes committed in connection with Russia’s aggression against Ukraine and cooperation with third countries.
During the Presidency, particular progress was made on the following matters:

EU Member States agreed on new legislation that will make it easier to identify and track the proceeds of crime. This will also provide greater scope for confiscating criminal proceeds,
EU Member States also agreed to give law enforcement authorities access to bank account details throughout the EU,
Negotiations between the Council of the European Union, the European Parliament and the European Commission on a Regulation to expand and strengthen the role of the EU Drugs Agency (EMCDDA) were initiated and concluded.

Following the tradition of other Member States holding the Presidency, Sweden organised an exhibition of national art at Eurojust. Several paintings by Mr Björn Wessman, inspired by Sweden’s landscapes, were displayed at the Eurojust building. More information about the artist and his exhibition at Eurojust can be found in the video below.
Compliments of the European Union Agency for Criminal Justice Cooperation.The post Conclusion of Swedish Presidency of the Council of the European Union first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Chair Jerome H. Powell at the Banco de Espana Fourth Conference on Financial Stability, Madrid, Spain | 29 June 2023 |
Today I will briefly discuss the current economic situation and the stresses that emerged in the U.S. banking system earlier this year. I will then turn to the evolution of the financial system since the Great Recession and conclude with a few general observations. I will highlight how global efforts to boost resilience in the financial sector over the past decade have been an important success. I will also discuss how recent developments have revealed residual vulnerabilities that we are going to address, and the need to be vigilant for emerging risks.
U.S. economic growth slowed significantly last year, and recent indicators suggest that economic activity has continued to expand at a modest pace. Growth in consumer spending has picked up this year, and some indicators in the housing market have turned up recently. At the same time, activity in the housing sector remains far below its peak in early 2022, reflecting the effects of higher mortgage rates. Higher interest rates and slower output growth also appear to be weighing on business fixed investment.
The labor market remains very tight. Over the past three months, payroll job gains have been robust. The unemployment rate has moved up but remains low. There are some signs that supply and demand in the labor market are coming into better balance, including higher labor force participation, some easing in nominal wage growth, and declining vacancies. While the jobs-to-workers gap has declined, labor demand still substantially exceeds the supply of available workers.
Inflation, however, remains well above our longer-run goal of 2 percent. Over the 12 months ending in May, total personal consumption expenditures (PCE) prices are estimated to have risen 3.9 percent; excluding the volatile food and energy categories, core PCE prices likely rose 4.7 percent. Inflation has moderated somewhat since the middle of last year. Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2 percent has a long way to go.
Since early last year, we have raised our policy rate by 5 percentage points. We see the effects of our policy tightening on demand in the most interest rate–sensitive sectors of the economy, particularly housing and investment. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.
The economy is also facing headwinds from tighter credit conditions for households and businesses, which are likely to weigh on economic activity, hiring, and inflation. Tighter credit conditions are a natural result of tighter monetary policy. But the bank stresses that emerged in March may well lead to a further tightening in credit conditions. The extent of these effects remains uncertain.
At our last meeting, the Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 5 to 5-1/4 percent while continuing the process of significantly reducing our securities holdings. We made this decision in light of the distance we have come in tightening policy, the uncertain lags in monetary policy, and the potential headwinds from credit tightening. As noted in the FOMC’s Summary of Economic Projections, a strong majority of Committee participants expect that it will be appropriate to raise interest rates two or more times by the end of the year.1
When bank stress emerged in March, we acted in concert with other government agencies to address it, enabling the Federal Deposit Insurance Corporation to resolve two failed banks in a manner that protected all depositors. We also used our liquidity tools to make funding available to banks that might need it. In addition to our discount window, we established a new facility under our emergency lending authorities, the Bank Term Funding Program. Our provision of liquidity through these tools supported the stability of the financial system without restricting the use of our monetary policy tools to firm the stance of policy as part of our efforts to reduce inflation. The banking system remains sound and resilient, deposit flows have stabilized, and strains have eased.
Evolution of the System since the Great Recession
A little more than a decade ago, the Global Financial Crisis required extraordinary interventions by governments around the world. Stabilizing the U.S. financial system required coordinated efforts by all parts of the government, including $700 billion in taxpayer funds to recapitalize banks, a suite of Fed emergency liquidity facilities, as well as government guarantees on bank transaction accounts and money market mutual funds. Despite these efforts, the Great Recession brought misery to countless millions.
As the crisis slowly receded, authorities in the U.S. and around the world implemented a host of reforms. The goal was to build a system that could withstand severe shocks, including unanticipated ones that might arrive from any direction. In other words, a financial system that would be a source of strength during stressful periods.
A key pillar was building resilience in the banking system. This effort was remarkably successful. Over the course of the decade, capital and liquidity at the largest U.S. banks more than doubled. We began a program of rigorous annual stress tests to ensure the banking system was capitalized against severe recessions and financial market turmoil.
The Great Recession also underscored the critical importance of the nonbank sector. Here, too, the authorities have undertaken a number of steps to build resilience, although much remains to be done.
In 2020 the financial system was again tested, facing a truly unprecedented shock as the pandemic brought the global economy to a standstill. Investors scrambled for safety and liquidity during the “dash for cash.” Financial markets came under extreme pressure. Ultimately, the authorities had to support financial markets again as part of the extremely forceful monetary and fiscal response to the public health emergency. The banking system, however, was now far more resilient than it had been before the reforms and thus well positioned to absorb the shock.
We cannot take the resilience of the financial system for granted, however. The multiple shocks we have seen over the past year or so—including the extreme volatility in commodity markets following Russia’s invasion of Ukraine and, of course, surprisingly high and persistent inflation as well as the associated increase in interest rates—stressed a range of bank and nonbank financial institutions.
Three General Observations Stemming from the Recent Banking Turmoil
Given the efforts to build resilience in the banking system over the past decade and a half, two natural questions are, why did Silicon Valley Bank (SVB) and two other sizable U.S. banks fail this spring, and why did Credit Suisse—a global systemically important bank (G-SIB)—require a government-supported rescue acquisition? We are committed to learning the lessons from the U.S. bank failures for our program of supervision and regulation. I will offer three observations about the events.
The first observation is that it is very difficult to resist the natural human tendency to fight the last war. In 2008 we saw banks come under stress from outsized credit losses and insufficient liquidity. Such losses appeared possible in the early days of the 2020 crisis, although they ultimately did not materialize. In our stress tests, we have considered severe stress scenarios that produced losses on banks’ books, including outsized credit losses. But, of course, SVB’s vulnerability came not from credit risk, but from excessive interest rate risk exposure and a business model that was vulnerable in ways its management did not fully appreciate, including a heavy reliance on uninsured deposits.
These events suggest a need to strengthen our supervision and regulation of institutions of the size of SVB. I look forward to evaluating proposals for such changes and implementing them where appropriate.2 Much will depend on getting the specifics right, and we should bear in mind that there are always tradeoffs in any financial regulation. In addition, the U.S. has benefited from its rich, multi-tiered banking ecosystem, and that diversity should be preserved.
The second observation is the value of forthrightly recognizing when a crisis is building and responding decisively. When SVB failed it was clear that a number of standard assumptions, even though they were informed by hard experience, were wrong. Notably, bank runs were no longer a matter of days or weeks—they could now be nearly instantaneous. Fortunately, in concert with other parts of the government, we were able to act decisively to meet the liquidity needs of the banking system, protect depositors, and limit contagion.
The third observation is the value of having the very largest banks be highly resilient. Our regulatory system is much stronger for the substantial additional safeguards we have built around the G-SIBs since the Great Recession. They are subject to capital surcharges, required to be highly liquid, and held to the highest supervisory standards. The events of the past couple of months would have been much more difficult to manage had the largest banks been undercapitalized or illiquid.
Conclusion
The Great Recession was a watershed moment, demonstrating the terrible consequences a fragile financial system can have on people’s lives. In response, regulators in the U.S. and around the globe set out to build a much more resilient financial system. And the ensuing experiences of the pandemic and the past few months did much to validate this approach.
The bank runs and failures in 2023, however, were painful reminders that we cannot predict all of the stresses that will inevitably come with time and chance. We therefore must not grow complacent about the financial system’s resilience. And building and maintaining that resilience requires collaboration. The system was able to withstand recent shocks because of the efforts by regulators and legislators, including our international counterparts in the globally interconnected financial system.
We will take these lessons on board, and we will keep learning, as we must, because the work of building and maintaining a resilient financial system is never done.
Footnotes:
1. The most recent Summary of Economic Projections is available on the Board’s website at https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm. Return to text
2. Of course, any rule change will go through the standard rulemaking process, including public notice and comment, and have appropriate phase-in and transition periods. Return to text
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The European Commission has today put forward two proposals to ensure that citizens and businesses can continue to access and pay with euro banknotes and coins across the euro area, and to set out a framework for a possible new digital form of the euro that the European Central Bank may issue in the future, as a complement to cash.
The euro continues to be a symbol of Europe’s unity and strength. Across the euro area and beyond, for more than two decades, people and businesses have been accustomed to paying with euro coins and banknotes. While 60% of people surveyed would like to continue to have the option to use cash, an increasing number of people are choosing to pay digitally, using cards and applications issued by banks and other digital and financial firms. This trend was accelerated by the COVID-19 pandemic.
To reflect these trends, the Commission has today proposed two mutually supportive sets of measures to ensure that people have both payment options, cash and digital when they want to pay with central bank money:

A legislative proposal on the legal tender of euro cash to safeguard the role of cash, ensure it is widely accepted as a means of payment and remains easily accessible for people and businesses across the euro area.
A legislative proposal establishing the legal framework for a possible digital euro as a complement to euro banknotes and coins. It would ensure that people and businesses have an additional choice – on top of current private options – that allows them to pay digitally with a widely accepted, cheap, secure and resilient form of public money in the euro area (complementing the private solutions that exist today). While today’s proposal – once adopted by the European Parliament and Council – would establish the legal framework for the digital euro, it will ultimately be for the European Central Bank to decide if and when to issue the digital euro.

The Package in detail
Legal tender of euro banknotes and coins
Euro cash is ‘legal tender’ in the euro area. This proposal aims to set out in legislation what that actually means, with a focus on two ‘A’s: acceptance and access. Although acceptance of cash is high on average across the euro area, issues have emerged in some Member States and sectors. Meanwhile, some people have difficulties in accessing cash, for example as a result of closures of ATMs and bank branches.
Today’s proposal aims to safeguard the continued and widespread acceptance of cash throughout the euro area and will also ensure that people have sufficient access to cash to be able to pay in cash if they so wish.
Member States will need to ensure widespread acceptance of cash payments, as well as sufficient and effective access to cash. They will need to monitor and report on the situation and take measures to address any problems identified. The Commission could step in to specify measures if needed.
The proposal will ensure that everyone in the euro area is free to choose their preferred payment method and has access to basic cash services. It will ensure the financial inclusion of vulnerable groups who tend to rely more on cash payments, such as older people.
Digital euro
To adjust to the increasing digitalisation of the economy, the European Central Bank (ECB) – like many other central banks around the world – is investigating the possibility of introducing a digital euro, as a complement to cash. The digital euro would give consumers an alternative European-wide payment solution, in addition to the options that exist today. This means more choice for consumers and a stronger international role for the euro.
Like cash today, the digital euro would be available alongside existing national and international private means of payment, such as cards or applications. It would work like a digital wallet. People and businesses could pay with the digital euro anytime and anywhere in the euro area.
Significantly, it would be available for payments both online and offline, i.e. payments could be made from device to device without an internet connection, from a remote area or underground car park. While online transactions would offer the same level of data privacy as existing digital means of payments, offline payments would ensure a high degree of privacy and data protection for users: they would allow users to make digital payments while disclosing less personal data than they do today when making card payments, just like when paying with cash, and the same as what they disclose when they take cash out of an ATM. Nobody would be able to see what people are paying for when using the digital euro offline.
Banks and other payment service providers across the EU would distribute the digital euro to people and businesses. Basic digital euro services would be provided free of charge to individuals. To foster financial inclusion, individuals who do not have a bank account would be able to open and hold an account with a post office or another public entity, such as a local authority. It would also be easy to use, including for persons with disabilities.
Merchants across the euro area would be required to accept the digital euro, except very small merchants who choose not to accept digital payments (as the cost to set up new infrastructure to accept payments in digital euro would be disproportionate).
The digital euro could also be a solid basis for further innovation, allowing banks to provide innovative solutions to their clients, for example.
The wide availability and use of digital central bank money would also be important for the EU’s monetary sovereignty – particularly if other central banks around the world start developing digital currencies. It is also important against the backdrop of the developing crypto currency market.
Today’s proposal sets out the legal framework and essential elements of the digital euro, which would enable – once adopted by the European Parliament and Council – the European Central Bank to eventually introduce a digital euro that is widely usable and available. It will be for the ECB to decide if and when to issue the digital euro. This project will require significant further technical work by the ECB.
Background
The European Commission has been working closely with the European Central Bank  over the past few years to jointly review at technical level a broad range of policy, legal and technical questions on the digital euro.
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The digital euro is a necessary step to ensure that our monetary system keeps up with digital advances. It will be widely accessible and easy to use while preserving privacy – just like cash.

Our world is changing. Digitalisation has transformed society in ways that would have been difficult to imagine only ten years ago. It is also changing how we make payments: people increasingly want to pay digitally. The COVID-19 pandemic has accelerated this shift.
Central banks around the world are now working on complementing the public money they currently make available – cash – with a digital version of it: a central bank digital currency. In the euro area, the digital euro would offer a digital payment solution that is available to everyone, everywhere, for free.
Cash remains important: it is still the preferred means of making small in-store payments and person-to-person transactions. Most people in the euro area want to keep the option to pay with banknotes and coins. This is why the European Commission and the European Central Bank (ECB) are fully committed to making sure that cash remains fully accepted and available across all 20 countries in the euro area.
But the fact is, using cash for payments is declining in many parts of the world, including Europe. As we move towards a true digital economy, adapting cash to reflect the digital age is the logical next step.
Having both options – a cash euro and a digital euro – would mean that everyone can choose how to pay and no one is left behind in the digitalisation of payments. Crucially, it would offer Europeans the option to pay digitally throughout the euro area, from Dublin to Nicosia and from Lisbon to Helsinki.
For consumers, the digital euro would bring many practical advantages. It would be simple to use and cost-free. No matter where they were in the euro area, people could pay anyone for free with their digital euro, for instance using a digital wallet on their phones. They would not even have to make payments online: they could also pay offline.
Protecting privacy is a vital feature of the digital euro. The ECB would not see users’ personal details or their payment patterns. The offline functionality would also bring a higher degree of data privacy than any other digital payment methods currently available.
A digital euro would also reduce payment-related fees for consumers by spurring competition in Europe. At present, two-thirds of Europe’s digital retail payments are processed by a handful of global companies. Thanks to greater competition, customers and merchants would benefit from cheaper services.
For banks and other payment service providers, the digital euro would act as a springboard for the development of new pan-European payment and financial services, stimulating innovation and making it easier to compete with large, non-European financial and technology firms. It would include safeguards, such as limits on the amount that people could hold, to avoid any substantial outflow of deposits from banks. But users wishing to pay more than the set limit would be able to do so by linking their digital wallet to their bank account.
There are also major strategic advantages to having a digital euro. As the world’s largest single market, Europe cannot afford to remain passive while other jurisdictions move ahead. If other central bank digital currencies were allowed to be used more widely for cross-border payments, we would risk diminishing the attractiveness of the euro – currently the world’s second most-important currency after the US dollar. And the euro could become more exposed to competition from alternatives such as global stablecoins. Ultimately, this could endanger our monetary sovereignty and the stability of the European financial sector.
A digital euro would also enhance the integrity and safety of the European payment system at a time when growing geopolitical tensions make us more vulnerable to attacks to our critical infrastructure. By relying on European infrastructure, the system would be better equipped to withstand disruptions, including cyberattacks and power outages.
We are still only at the start of this exciting new project. The European Commission presents its legal proposal today. This autumn, the ECB will complete its investigation phase on the digital euro’s design and distribution. It will then decide whether to initiate a preparation phase to look at developing and testing the new digital currency.
Central bank money underpins our trust in all forms of money as well as the stability and resilience of our payment system. It is the anchor for Europe’s financial system and monetary union. A digital euro would preserve the role of central bank money, because whatever form it takes – cash or digital – a euro will remain a euro.
Our monetary system, with our common currency at its core, needs to keep up with digital advances. We are committed to ensuring that it does.
This blog post has been published as an op-ed in several European newspapers.
Authors:

Fabio Panetta, Member of the Executive Board of the ECB
Valdis Dombrovskis, Executive Vice-President of the European Commission

Compliments of the European Central Bank.The post ECB | Why Europe needs a digital euro first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Financial institutions rely on third-party service providers for a range of services, some of which support their critical operations.

These third-party dependencies have grown in recent years as part of the digitalisation of the financial services sector and can bring multiple benefits to financial institutions including flexibility, innovation and improved operational resilience. However, if not properly managed, disruption to critical services or service providers could pose risks to financial institutions and, in some cases, financial stability.
In response to concerns over the risks related to outsourcing and third-party service relationships, the FSB has developed a toolkit for financial authorities and financial institutions as well as service providers for their third-party risk management and oversight. The toolkit aims to:

reduce fragmentation in regulatory and supervisory approaches to financial institutions’ third-party risk management across jurisdictions and different areas of the financial services sector;
strengthen financial institutions’ ability to manage third-party risks and financial authorities’ ability to monitor and strengthen the resilience of the financial system; and
facilitate coordination among relevant stakeholders (i.e. financial authorities, financial institutions and third-party service providers).

This should help mitigate compliance costs for both financial institutions and third-party service providers.
The toolkit, which looks holistically on third-party risk management, comprises:

a list of common terms and definitions to improve clarity and consistency across financial institutions and to improve communication among relevant stakeholders
tools to help financial institutions identify critical services and manage potential risks throughout the lifecycle of a third-party service relationship
tools for supervising how financial institutions manage third-party risks, and for identifying, monitoring and managing systemic third-party dependencies and potential systemic risks

The FSB is inviting comments on this consultative document and the questions set out below. The FSB is holding a virtual outreach event for stakeholders on 21 July 2023 at 13:00-15:00 CEST. Written responses should be sent to fsb@fsb.org by 22 August 2023 with the subject line “Third-Party Risk Management and Oversight”. Responses will be published on the FSB’s website unless respondents expressly request otherwise.
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The Council adopted today an eleventh package of economic and individual restrictive measures intended to strengthen existing EU sanctions and crack down on their circumvention, thereby further eroding Putin’s war machine and his revenues.

Our sanctions are already taking a heavy toll on the Russian economy and on the Kremlin’s ability to finance its aggression. Today’s package increases our pressure on Russia and Putin’s war machine. By tackling sanctions circumvention, we will maximise pressure on Russia by depriving it further of the resources it so desperately needs to allow it to pursue its illegal war against Ukraine.
Josep Borrell, High Representative for Foreign Affairs and Security Policy

The agreed package includes the following measures:
Circumvention tool
In order to address the growing circumvention of EU sanctions, the EU decided to further strengthen bilateral and multilateral cooperation with third countries, and the provision of technical assistance.
Only in those cases where cooperation does not yield the intended results, the EU will take rapid, proportionate and targeted action, which is solely aimed at depriving Russia of the resources which allow it to pursue its war of aggression against Ukraine, in the form of appropriate individual measures addressing the involvement of third-country operators in facilitating circumvention.
The Union will re-engage in a constructive dialogue with the third country in question following the adoption of such individual measures.
In the event that, in spite of individual sanctions and further engagement, circumvention remains substantial and systemic, the EU will have the possibility to take exceptional, last resort measures. In this event the Council may unanimously decide to restrict the sale, supply, transfer or export of goods and technology whose export to Russia is already prohibited – notably battlefield products and technologies – to third countries whose jurisdiction is demonstrated to be at a continuing and particularly high risk of being used for circumvention.
Transit ban
In order to further minimise the risk of sanctions’ circumvention, today’s decision prohibits the transit via the territory of Russia of more goods and technology which may contribute to Russia’s military and technological enhancement or to the development of the defence or security sector, goods and technology suited for use in aviation or space industry and jet fuel and fuel additives, exported from the EU to third countries.
Import-export controls and restrictions
The Council added additional 87 entities to the list of entities directly supporting Russia’s military and industrial complex in its war of aggression against Ukraine. They will be subject to tighter export restrictions concerning dual use goods and technologies.
The list includes four third-country entities manufacturing unmanned aerial vehicles (drones) and providing them to Russia, other third-country entities involved in the circumvention of trade restrictions, and certain Russian entities involved in the development, production and supply of electronic components for Russia’s military and industrial complex.
Furthermore, today’s decision expands the list of restricted items that could contribute to the technological enhancement of Russia’s defence and security sector to include: electronic components, semiconductor materials, manufacturing and testing equipment for electronic integrated circuits and printed circuit boards, precursors to energetic materials and precursors to chemical weapons, optical components, navigational instruments, metals used in the defence sector and marine equipment.
Broadcasting
In order to address the Russian Federation’s systematic, international campaign of media manipulation and distortion of facts aimed at enhancing its strategy of destabilisation of its neighbouring countries – the EU and its member states -, the Council extended the suspension of broadcasting licences to five additional media outlets: RT Balkan, Oriental Review, Tsargrad, New Eastern Outlook and Katehon. These outlets are under the permanent direct or indirect control of the leadership of the Russian Federation and have been used by latter for its continuous and concerted propaganda actions targeted at the civil society in the EU and neighbouring countries, gravely distorting and manipulating facts.
In particular, the propaganda has repeatedly and consistently targeted European political parties, especially during election periods, as well as civil society, asylum seekers, Russian ethnic minorities, gender minorities, and the functioning of democratic institutions in the EU and its member states.
In line with the Charter of Fundamental Rights, these measures will not prevent those media outlets and their staff from carrying out activities in the EU other than broadcasting, e.g. research and interviews.
Roads and ports
The EU extended the prohibition to transport goods into the EU by road to trailers and semi-trailers registered in Russia, including when hauled by trucks registered outside of Russia.
Furthermore, in view of the sharp increase of deceptive practices by vessels transporting crude oil and petroleum products, the Council decided to prohibit access to EU ports and locks to any vessels that engage in ship-to-ship transfers, if the competent authorities have reasonable cause to suspect that the vessel is either in breach of the ban on importing seaborne Russian crude oil and petroleum products into the EU, or is transporting Russian crude oil or petroleum products purchased above the price cap agreed by the Price Cap Coalition.
The same prohibition will apply to vessels when competent authorities have solid reasons to suspect that they illegally interfere, switch off or otherwise disable their navigation system when transporting Russian crude oil and petroleum products in breach of international agreements, rules and standards.
Energy
The temporary derogation granted to Germany and Poland for the supply of crude oil from Russia through the northern section of the Druzhba oil pipeline will end. However, the oil which originates in Kazakhstan or another third country will be able to continue to transit through Russia and imported into the EU via the Druzhba oil pipeline.
Individual listings
In addition to economic sanctions, the Council decided to list a significant amount of additional individuals and entities.
Background
In the European Council conclusions of 23 March 2023, the EU reiterated its resolute condemnation of Russia’s war of aggression against Ukraine, which constitutes a manifest violation of the UN Charter. The EU also reiterated that it remained committed to maintaining and increasing collective pressure on Russia, including through possible further restrictive measures.
The European Council conclusions also underlined the importance and urgency of stepping up efforts to ensure the effective implementation of sanctions at European and national level and its firm commitment to effectively preventing and countering their circumvention in and by third countries.
The EU stands firmly and fully with Ukraine and will continue to provide strong political, economic, military, financial and humanitarian support to Ukraine and its people for as long as it takes.
The relevant legal acts will soon be published in the Official Journal of the EU.
Contact:

Maria Daniela Lenzu, Press Officer | maria-daniela.lenzu@consilium.europa.eu

Compliments of the EU Council, the Council of the European Union.The post Russia’s war of aggression against Ukraine: EU adopts 11th package of economic and individual sanctions first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.