Keep calm and carry on. Two months into 2020, the financial world remains at a point of uncertainty about the immediate future, but is also seeing a number of interesting developments, both in terms of market movements and regulatory/legislative initiatives.
The current consensus about the global (and, by extension, CEE) macro-economic outlook it that, on the one hand, we find ourselves at the peak of the cycle. On the other, we are facing idiosyncratic uncertainties such as a looming pandemic, a prospect of a disorderly Brexit, and political instability in EU. Thrown into the mix are legacy business challenges facing European/CEE banks, such as the fight to sustain profits on traditional banking products and the quest to tap into new markets (where a new breed of competitors – including Big Tech and fintechs – needs to be fought). Last but not least, looming legal uncertainties are not making matters easier: should the loan syndication (and possibly even restructuring) processes be re-thought in light of DG Comp's report-and-syndicated-loans/ and market inquiry? What stance will courts and legislators ultimately take on questions regarding foreign law denominated (consumer) loans? Are banks adequately protected against risks in the wake of the transition away from the IBORs? The list goes on.
A gloomy outlook? I think the right term is "challenging". Regulators and private players alike have no alternative but to put on a brave face, take on the challenges and keep going. As you will see in this edition of Schoenherr's To the Point Finance, the CEE is doing precisely that. To give you a taste: the Czech Republic, embracing the digital era, has laid down the legislative foundation for a singular e-identity (via banks as ID gatekeepers); Montenegro, learning from recent experience, has revamped the legislative toolbox for resolution of credit institutions; Hungary is making it increasingly easier for companies to tap into capital markets for debt finance; Poland is re-vamping its pension system and the Slovenian bank regulator has stepped on the brakes for consumer/residential lending – for domestic banks only. Enjoy your reading!
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