The Financial Services Insider | Issue 9

Grant Thornton’s "The Financial Services Insider" is a Quarterly Newsletter designed to help you navigate the constantly changing regulatory landscape within which your business operates.

"The Financial Services Insider" covers the main regulatory developments in the Financial Services sector, published by the EU and Greek competent authorities the previous quarter, in order to help you remain up-to-date with the most significant regulatory updates affecting your organization.

The most important highlights of the 2nd quarter of 2022

With the situation at Ukraine escalating and amidst a general inability of EU members to agree on various issues regarding the imposition of more severe and effective sanctions at Russia and the overall treatment of rising inflation and energy dependency issues in Europe, great emphasis was placed at policy issues and actions to help manage the situation. The handling of Interest rates increases for a first time after a long period of low and even negative rates while winding down its quantitative easing programs presents a number of challenges for ECB as peripheral risk is back in focus given the fragmentation in the transmission of ECB policy across the eurozone.

Regarding Greece, and given the evolutions at the broader environment, relevant implications and effects in country’s economic growth have been depicted at BoG’s recent financial stability report issued last May while appropriate revisions and updates regarding key assumptions take place as the situation unfolds. Given the peculiarities of the Greek economy, the effective utilization of the RRF is expected to significantly contribute to the overcoming of the situation and Banks and their clients are increasingly focusing on relevant loan and guarantees opportunities. Furthermore, last May approval by EC of a Greek scheme of €2 billion to support investment towards a sustainable recovery is expected to further support around 250 companies.

Against this landscape, with regards to Q2 2022 other major evolutions at the regulatory – supervisory front, the most notable activities relate to the below:

• At the climate change risk front, and following the implementation of a similar exercise at Banks earlier on this year, EIOPA initiated stress tests while EBA launched the discussion on the role of environmental risks in the prudential framework and FSB launched a consultation on supervisory and regulatory approaches to climate-related risks and Basel Committee issued principles for the effective management and supervision of climate-related financial risks.
• While the discussions around temporary use of transition fuels get intensified, EC established the EU Energy Platform Task Force to secure alternative supplies (REPowerEU) and granted €1.1 billion to support clean energy projects from the EU Emissions Trading System (ETS) fund. Furthermore, to support Europe's sustainable transition with second green bond syndication it raised a further €6 billion in NextGenerationEU funds with its second NextGenerationEU green bond syndication. Late in June EC raised another €5 billion in green bonds in successful 10th transaction.
• Issuance of Annual Reports by a number of authorities and institutions with appropriately updated annual plans due to the current geopolitical crisis implications.