“EU unveils changes to bank bailout rules…”

After market turmoil, the European Commission has unveiled a new set of rules for further protection.

After market turmoil, EU revamps rules for bailing out mid-size banks and protect deposits.

As markets gradually return to normalcy following weeks of turbulence, the European Commission has unveiled a new set of rules on Tuesday, to further protect deposits, prevent bank runs and ensure taxpayers do not end up footing the bill every time a financial institution falls victim to its own mismanagement.

Under the proposals, troubled medium-sized and smaller banks will be encouraged to use funds from the financial sector instead of public money, the European Commission, the EU’s executive arm, said.

The EU was under pressure to act fast after three US banks failed last month and the merger of Swiss investment banking giant Credit Suisse with its regional rival UBS.

“Recent failures of some US and Swiss banks and resulting stress in the international banking sector are just a reminder of why we need a strong functioning system to deal with all banks whatever the size when they get into trouble,” Valdis Dombrovskis, commission executive vice president, told a news conference in Strasbourg.

The rules centre on resolution, the specific process for failing banks that are too big and too important to undergo ordinary liquidation proceedings because doing so might trigger financial instability and harm the wider economy.

Resolution is considered less disruptive than liquidation and allows insolvent banks to continue their critical operations, including lending and payments, while a restructuring takes place.

Brussels wants to expand the criteria for resolution and make medium-size banks eligible for tools that are usually reserved for their larger counterparts, such as the partial sale of business or the transfer of deposits from an ailing to a healthier bank.

The reform maintains the legal protection of deposits worth up to €100,000 but opens the door for shielding higher amounts stemming from life events like inheritance and real estate transactions.

European Parliament approves mega package of EU climate measures

The European Parliament took a big step forward in the fight against climate change on Tuesday, after it approved as many as three pieces of legislation from its landmark Fit for 55 packages, which aims to reduce greenhouse gas emissions by 55% by 2030.

Among them was the Carbon Border Adjustment Mechanism (CBAM), which is designed to create a more level playing field between EU and non-EU producers by attributing a carbon price to certain imported products.

According to the lead MEP on the file, Mohammed Chahim, the CBAM will have a major impact.

“It is an absolute game changer and it’s really historic because for the first time we will start asking producers to pay for also the imported CO2 emissions,” he told Euronews.

“And it’s for the first time that the EU or any other region in the world applies a carbon tariff or a carbon price on producers outside of the EU, which that’s in itself historic.

“We hope that this will incentivise other regions in the world to join us in the EU to show the same ambition and decarbonise the economy as soon as possible and to keep the one so that we keep the 1.5 degrees within reach.”

“Our sector in the next eight years is expected to invest around €30 billion to decarbonise, but at the same time, it needs to remain competitive,” Aiello said in an interview.

“So, for instance, we have €45 billion of European steel that is exported to third countries, and these exports, with the current measures, would be fully exposed to unilateral cost and wood made would be made uncompetitive.

“So, in short term, our survival is at stake and our transition to green steel is also at stake.”

The Parliament also adopted the reform of the Emissions Trading System (ETS) and the Social Climate Fund which should ensure a fair climate transition for all EU citizens.

On the latter, Belgian MEP Sara Matthieu said that while the money will be vital in the near future, it is not enough.

“The EU has finally created a much-needed fund to directly support people in energy and mobility poverty. While this is an important achievement, it does not suffice as a social pillar for the Green Deal,” she said.

“Nearly 21.9% of the total EU population is at risk of poverty, meaning that nearly 100 million people require fundamental investments in home insulation and good public transport, and they cannot be left to shoulder this burden alone. At the negotiation table, member states slashed their contributions to the Social Climate Fund and thereby greatly reduced the pot’s size. 

“The majority of the ETS revenue will go directly to member state governments, and it is up to them to utilise it for essential social spending. At EU-level, the Social Climate Fund must act as a stepping stone towards a much more ambitious and social Green Deal,” she added.

Malta

Sustainable Finance and the Impact on the Financial Services Sector in Malta

What is ESG?

With the effects of negative environmental consequences of economic growth and globalisation, ESG has arisen to the top of the regulatory agenda. An acronym short for Environmental, Social and Governance, ESG refers to a set of standards for a company’s behaviour used by socially conscious investors to screen potential investors.

Sustainable finance refers to the process of taking ESG considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.

More than ever, Maltese companies are investing in sustainable business models. Entities are committing to commercial projects that render a positive impact on the environment, tangibly shifting the mentality of the social dynamics within the Maltese community and ensuring a robust corporate governance framework.

Company Announcements

Lombard Bank p.l.c

On 27^th April 2023, Lombard Bank plc is scheduled to meet to approve the Group’s and the Bank’s final Audited Accounts for the Financial Year ended 31 December 2022 and to consider the declaration of a final dividend.

RS2 Software p.l.c

On 28^th April, the Company is scheduled to meet to approve the Group’s and the company’s financial statements for the period ending 31 December 2022.

Mapfre Middlesea plc

The Board of Directors is recommending a final net dividend of €0.038043 per share.

The dividend will be paid on 23 May 2023 to all shareholders as at close of trading on 8 May 2023, subject to approval at the Annual General Meeting scheduled for 28 April 2023.

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