Banking regulation and supervision

1. What deposit insurers do today

Speaking in Berlin to the international association of deposit insurers, Pablo Hernández de Cos recalls that the purpose of insurance is to protect less sophisticated savers and sustain public confidence, though a state backstop or central bank liquidity could also do part of that job. Industry funding remains central because it spreads failure costs among banks, and the old worry that insured banks take more risk has been answered by capital rules and resolution regimes that put losses on owners and creditors. Mandates have widened: over 80% of members now play some role in resolution that keeps deposits accessible rather than only paying out.

2. Funding failures

Banks' own loss-absorbing resources should be the first line, as international standards require for the largest banks. But resolution costs are unpredictable, loss-absorbing buffers can be depleted before failure and they do not suit every business model, notably smaller banks. Industry-funded schemes therefore stay vital, as the recent European reform widening their use in resolving small banks illustrates.

3. Three sources of new risk

Crisis tools were built around bank solvency and liquidity stress, so he sketches three areas to review. Risks can arise outside the regulated perimeter, as shown by the Archegos collapse and the 2022 UK gilt disruption, which calls for understanding how stress spreads and possibly access to central bank liquidity for some non-banks under proper oversight. Technology makes runs faster, as the Silicon Valley Bank failure showed, and raises the odds of severe cyber or third-party outages for which authorities need a joined-up plan. Finally, new forms of money could matter if adopted widely.

4. Stablecoins and tokenised deposits

Protection exists because deposits fund credit and carry run risk, and because they are redeemable at par and dominate payments. Asset-backed stablecoins lack stable value and the credit link, so the core rationale is missing; yet a run could force fire sales and bank withdrawals, so safeguards on reserves, capital and holders' legal claims matter, and a 2025 review found major implementation gaps. Tokenised deposits stay tied to a bank and credit provision, so logically they should receive the same protection. Whatever is decided must be explained clearly to avoid public confusion, a task where deposit insurers have proven skills in raising awareness.

5. Conclusion

Over a quarter century deposit insurance has become a core part of the safety net and is moving closer to failure management. Because technology is advancing fast, crisis frameworks must change to handle new risks. Yet proven success against contagion does not mean every product with deposit-like features deserves cover; extension should depend on whether the product delivers a comparable benefit to society. The association has already updated its core principles and published work on digital products, business models and players, which should feed the day's discussions.

1. Why integration matters now

Joachim Nagel looks back on forty years of European integration and notes that financial markets remain only partly joined. Europe must fund large investment in artificial intelligence, energy and decarbonisation, put at 750 to 800 billion euros a year to 2030, plus defence. Public money cannot cover it, so the financial system must mobilise private funds more effectively.

2. Strong but structurally handicapped banks

European banks are robust, with solid capital and liquidity that limited the 2023 turmoil, and this should not be put at risk by reforms. Yet US lenders do better on margins and valuations. He rejects overcapitalisation as the cause, citing ECB and Bundesbank research that higher capital lowers funding costs and earnings swings. Direct rivalry between German and American banks in lending is actually rare; it is mostly in investment banking and trading. The real handicap is fragmented banking and capital markets and a patchwork of complex, sometimes contradictory national rules, which block efficient capital allocation and economies of scale.

3. The Savings and Investments Union

The goal is to link savings to productive investment through many building blocks: securitisation, less fragmented trading and settlement, tokenisation, venture capital, harmonised supervision, simpler banking supervision, pensions and financial literacy. Proposals are advancing: a securitisation overhaul, a market integration package agreed by ministers last week, an EU-wide company regime for start-ups, and a roadmap with dates. Banks gain too, since securitisation lets them shift risk to investors and free capital for lending; markets and banks are partners, not rivals. A true banking market also needs safer cross-border liquidity management with parent support for subsidiaries in crises, common deposit insurance and lower sovereign debt concentration.

4. Simpler rules

Diversity among big, savings and cooperative banks calls for proportionate rules, as fixed compliance costs weigh on small lenders. A task force set up by the ECB in 2025 proposes fewer risk-weighted elements and a lighter regime for small, low-risk banks paired with a higher leverage ratio, an idea German supervisors have sketched. The Eurosystem fed this into the Commission consultation, and the Commission is expected to table banking legislation in early 2027. Simplification, he stresses, must not weaken the stability already achieved.

1. A shared boat in rough water

Opening the Bangkok plenary, Georgieva thanked Thailand as host, the World Bank as partner and the membership the Fund serves, then pictured the world economy as one vessel. Waves of new technology and geopolitical mistrust are lashing it, and a heavy burden of public debt limits how well it can steer. She believes the long-run direction is still improving, but insists good outcomes are never automatic. So far the vessel has proved resilient; keeping it so will take sustained effort.

2. Steady growth, uneven fortunes

Global growth is projected at 3.1% this year, unchanged from a year ago, because an energy shock that drags output down is cancelled out by an AI boom that lifts it. Beneath the average, economies hit by war were marked down, while those in the AI value chain, chiefly the US, China, India and other Asian economies, were marked up. Public debt is too high nearly everywhere, worst among rich countries, rising in emerging markets, and costly in interest for low-income ones as aid shrinks. Energy disruption raises prices and slows output, while AI adds short-term inflation through debt-financed infrastructure. Bond markets are reacting: US, German and Japanese ten-year yields reached multi-decade highs, though trading stays orderly.

3. Advice to governments and central banks

Central banks should stay laser-focused on price stability; the IMF backs the recent tightening by the Fed, the ECB and the Bank of Japan, since acting early beats catching up later, even though higher rates raise public borrowing costs. Most high-debt countries need fiscal consolidation built on credible medium-term plans, sometimes with immediate measures, explained honestly to citizens, shielding the vulnerable and paired with reforms that raise potential growth. This matters most for large advanced economies, whose choices spill over to everyone. Every country should prepare for AI whatever its role, spread access to it, and guard against joblessness, an eroding tax base and above all cyber attacks.

4. What the Fund itself is doing

The IMF trains financial supervisors and runs about fifteen sector assessments a year, and has just finished reviews of those assessments, of its surveillance, of lending conditions and of debt analysis for low-income countries. It urges the biggest members to correct global imbalances: America should save more, China consume more and Europe invest more. Lending commitments stand at $240 billion, with about three times that unused. She asked members to back the plan making the concessional trust self-sustaining: 39 countries have given assurances covering nearly 48%, EU support would lift that to 74%, against a 90% goal. New capacity-development pledges topped $100 million, and she closed with a Thai king's reminder that benefits must be cultivated patiently.

1. A vital ecosystem

At the tenth ACPR-AMF Fintech Forum, his first as governor, Emmanuel Moulin says financial technology firms, now more than 1 200 with about 55 000 jobs in France, drive the sector's dynamism and have matured into a mix that includes fifteen billion-dollar companies. The aim is now to help them scale. Funding rose 51% in the first half of 2026 but remains fragile and needs more European equity, which the Savings and Investments Union should supply through pension and retirement savings, venture partnerships, accessible household products, financial education, a common 28th company regime and a proper European framework for market infrastructure and post-trade.

2. Two guiding principles for supervisors

First, balance innovation with trust through proportionality, synergy with existing processes and technology-neutral rules that keep competition fair. Second, keep a regular, demanding dialogue with the whole ecosystem, since newcomers and incumbents, whether rivals or partners, jointly strengthen Europe against big tech. Tools include a Fintech Charter and the ACPR's innovation unit, and contacts from project leaders have risen sharply in 2026.

3. Challenge one: tokenisation

Faster settlement and lower costs come with stability and sovereignty worries, notably reliance on foreign infrastructure and settlement assets denominated in other currencies. The response has three pillars: central bank money for the digital age, with the digital euro for the public, the wholesale ledger service Pontes launched on 21 September and the longer-term Appia ecosystem; homegrown tokens issued by commercial banks, including deposits and euro stablecoins, pushed by a new Paris strategic group and illustrated by a project settling short-term paper with central bank tokens by end-2026; and regulation, with a targeted revision of the crypto-asset rules and a permanent pilot regime with ceilings near 300 billion euros.

4. Challenges two and three: AI and fragmentation

Nearly eighty percent of fintechs use artificial intelligence, which brings risks for access to credit and insurance, opaque decisions and cyber threats, illustrated by the summer attack on a developer platform. The digital resilience rules and the AI Act, which the ACPR will enforce for high-risk systems from December 2027, provide a base, but frontier models will likely need stronger rules. Geopolitical fragmentation exposes reliance on largely non-European cloud, models and computing capacity, so Europe must foster competitive homegrown players, a goal supported by the Commission's technology sovereignty package. Innovation must go hand in hand with confidence, and Europe should fund and build technology rather than merely import it.

1. Sound banks

Speaking at the Saddlers' Hall in London, home of a craft guild founded in 1395, Bundesbank President Joachim Nagel used the guild's motto about riding securely to discuss how firmly European banks sit, how they fare against foreign rivals and what would help them. Unlike in 2008, they weathered the pandemic and the 2023 turmoil, which he credits to post-crisis capital rules: studies by Basel, ECB and Bundesbank experts show stronger capital improves stability, lending and growth over the cycle.

2. How they compare

Direct competition with US banks is limited to investment banking and trading; corporate lending in Germany is contested mainly among European lenders. US and UK banks still earn higher margins and trade at higher valuations, although European bad loans and cost ratios keep falling. Research finds more capital does not hurt efficiency but cuts funding costs; the real drag is Europe's fragmented banking and capital markets and divergent national rules.

3. Three remedies

He wants more integrated, deeper capital markets through venture capital, securitisation, more retail investment, cross-border services and joint supervision of market infrastructure, which would also give banks scale. He backs simpler EU rules, expected in proposals early in 2027, but insists that integration measures favouring big cross-border banks be matched by lighter, proportionate requirements for small banks. And he warns that non-banks, now holding half of financial assets, are closely tied to banks (14% of German banks' assets are claims on them), so lenders must manage private-credit exposures carefully.

1. The challenge

Opening the 24th ICBS, the worldwide gathering of bank supervisors held this year in Bali with Bank Indonesia and the Indonesian financial regulator as hosts, Basel Committee Chair Erik Thedéen asked how supervisors can stay effective amid fast change: AI, cyber threats, new forms of intermediation, geopolitical tension and political pressure on independent authorities. His answer is that supervision must be both strong and modern. Critics often treat the first as rigid and hostile to innovation and the second as a polite word for leniency; he sees the two as complementary, and draws a parallel with Indonesia's history as a trading crossroads that prospered by adapting to change while keeping its footing.

2. Rules are not enough

He recalls what the post-2008 Basel III reforms achieved: core capital ratios of large banks up by over 40% since 2011 to about 14%, the ratio of debt to loss-absorbing capital roughly halved from 30 to 17 times, and liquid assets above a fifth of balance sheets, which helped banks survive the pandemic, rapid rate rises and the 2023 turmoil. He notes in passing that the public searches far more for Basel's rules than for its supervisory principles, and urges full, consistent and timely implementation of the remaining standards. But many failed banks, from Northern Rock to Silicon Valley Bank, met their minimum ratios before collapsing. Weak governance, poor rate-risk management and unstable funding were the real problems. Those hidden weaknesses later turned into losses and runs. A ratio only shows a bank's position on one day; supervision has to follow how it got there, where it is heading and how it would react to a change in conditions. Meeting minimum requirements, he stresses, does not mean the absence of risk, which usually shows up first in incentives, behaviour and concentrations, and the Committee's mandate covers supervision and bank practices as much as rules.

3. What effective supervision means

He defines it as spotting risks early, telling banks clearly what must change, and acting if they do not, all in good time, since an unresolved finding is unfinished work. Acting is hardest: supervisors need judgment to intervene before risks materialise, anchored in mandate, evidence and due process, avoiding both arbitrariness and box-ticking inertia. Because successes are invisible while failures are spectacular, supervision is accused of laxity after crises and of overreach between them; doing the job therefore takes resolve. Past failures show that warning signs were usually visible but not connected or acted upon in time. He defends judgment as a structured, evidence-based assessment that should be challenged internally, documented and reviewed afterwards, since rules alone cannot capture the specific weaknesses of each bank.

4. Capacity and modernisation

Staff, skills, data tools, legal powers, independence, culture and time are, for him, policy matters, and international assessments keep finding shortages of independence, resources and specialists. Tomorrow's supervisors will still need classic prudential knowledge but also expertise in technology, cloud, cyber, data, AI, links with non-banks and geopolitics, combining financial, technological and behavioural expertise in multidisciplinary teams, because a cyber incident can quickly become a liquidity problem and a concentrated business model can unravel when news spreads online. Modernisation should give supervisors more time to think, not just more data to process, and make supervision more forward-looking, data-driven and fast without becoming speculative or careless. Authorities compete with industry for scarce talent, yet underinvestment costs more. AI brings new risks in data quality, models, explainability and dependence on a few providers, addressed in the Committee's new third-party risk principles; small banks, most reliant on outside AI tools, must still keep responsibility in-house.

5. Commitments and cooperation

He proposes three commitments: protect mandates, independence, resources and early-intervention powers before a crisis; give staff expertise, time and backing to challenge bank leaders; and build trust by explaining how decisions are taken and evaluated, without hiding behind confidentiality. Finally, he presents international cooperation, as at the conference first held in 1979, as a form of capacity in itself, warning that fragmented supervision would breed fragmented finance and regulatory arbitrage.

1. A farewell hearing

In her last appearance before the European Parliament's economic committee as ESMA Chair, Verena Ross reviewed the past year and her term. Amid geopolitical tension, trade disputes and fast technological change, she argued Europe needs deep and attractive capital markets to fund innovation and growth and let citizens share in it.

2. A year of integration and simplification

She cited progress on consolidated market data feeds, the single access point for company information, preparation for next-day settlement, derivatives clearing rules and the Listing Act. Responding to industry complaints, ESMA proposed lighter transaction and fund reporting, a simpler path for retail investors and risk-based supervision, while insisting investor protection and market integrity stay intact. On crypto-assets, the focus has shifted from writing rules to supervising them consistently.

3. Looking ahead

Innovation, she added, can only grow at scale where investors trust it, so good regulation and supervision enable rather than hinder it. Recalling that ESMA has grown over fifteen years through the debt crisis, Brexit and the pandemic, now supervising more firms directly and in close partnership with national authorities, she backed the market integration and supervision package now being negotiated and said ESMA is ready for any new direct-supervision tasks, urging lawmakers to keep up the pace and remove remaining barriers so that rules and supervision match an increasingly integrated market.

1. Poland as an example

At an international finance conference in Warsaw marking 20 years of Poland's financial supervisor, ESMA Chair Verena Ross traced how Polish capital markets were built from scratch three decades ago through new laws, infrastructure and supervision. The Warsaw exchange now lists over 400 companies, is the largest in Central and Eastern Europe, and foreign investors make up nearly three-quarters of trading, which she credits to bold privatisation and market policies, EU membership and its common investor-protection rules, and strong national oversight that turned those rules into local confidence.

2. Europe's weaknesses

EU reforms on listing rules, company data access, consolidated trading data and settlement in one day from October 2027 help, but she points to fewer listings, more delistings, limited investment capacity and fragmentation that some estimate has cost trillions of euros of output. Retail and institutional investment remain too small to meet Europe's long-term needs, from defence spending to the climate and digital shifts, which also means lost opportunities for savers: Polish households save about 10% of income and invest about 5%, well below EU averages of roughly 15% and 9%. Earlier reforms, however successful, are therefore not enough, and she calls for renewed ambition.

3. The integration package

She welcomes the savings and investments union and its market integration and supervision package, which could be the most important market reform since the post-crisis era. EU-level supervision would suit truly pan-European players such as large trading venues, clearing houses, securities depositories and crypto firms, provided the criteria are realistic and ESMA works closely with national authorities while having the means to act independently. Common rules must produce common outcomes, which requires convergence tools and consistent supervision, plus cooperation arrangements tailored to each sector that avoid duplication. The package would also harmonise trading rules, allow trading groups to operate under one licence, link securities depositories through a hub model with standardised connections, and make the pilot regime for distributed-ledger infrastructure more usable so that tokenised markets can grow beyond trials.

4. Simpler rules

She stresses lighter reporting for firms and funds, an easier path for retail investors and risk-based supervision, noting Poland's supervisor has also removed national add-ons. Safeguards must stay, but the system must become leaner and more agile, combining national expertise with European ambition.

1. Markets that are European need supervision that is too

Speaking at the Eurofi conference in Dublin, ESMA Chair Verena Ross argued that firms, risks and data now cross borders so quickly that oversight confined to one country no longer fits. The EU wants deeper, more liquid markets, wider investment choice for savers and easier company funding, and she links that goal to the Commission's market integration and supervision package. Moving certain large cross-border entities under EU-level supervision is, in her view, a practical step rather than centralisation for its own sake: if firms meet different expectations in each state, they simply organise themselves around the fragmentation.

2. Simpler does not mean weaker

Ross ties the reform to burden reduction. Part of the complexity firms face comes from the rules, but part comes from uneven national application, repeated requests and slow coordination. A single integrated supervisor for truly cross-border activities could cut duplication, speed up time to market, make better use of data and let scarce expertise focus on the biggest risks. She insists this is not about doing less: cyber threats, new technology and geopolitical uncertainty make the supervised world harder, so the aim is to remove low-value complexity, not vigilance.

3. A message to lawmakers

With the Council and Parliament both aiming to settle their positions by the end of the year, she urges them not to dilute the proposal. Clear responsibilities, simple governance and matching resources are needed. A text riddled with exceptions, partial transfers or boundaries drawn to shield national champions, or EU supervision merely stacked on top of existing arrangements, would keep fragmentation alive while only looking European. She recalls that ESMA was born after a crisis, has matured since, and will implement whatever is agreed.

1. Strong banks, lost ground

At the Eurofi forum in Dublin, the Governor of the Banque de France observed that fifteen years of reform have left EU banks with record capital and liquidity, yet foreign groups now handle about 60% of corporate and investment banking for European clients. Solidity alone will not finance the climate transition, digital needs, defence and Europe's financial autonomy.

2. A single banking market

Cross-border loans are under 15% of euro area lending and cross-border mergers are rare, because groups must still hold capital and liquidity country by country. He called for waivers allowing groups to manage them centrally, with guarantees that parents support subsidiaries in stress, without waiting for a common deposit insurance scheme.

3. Simpler rules, not weaker ones

Simplification must not mean deregulation: Basel III was right and must stay risk-based and uniform. He proposed aligning loss-absorbing debt requirements, removing overlaps between supervisory add-ons and minimum rules, and questioning EU-specific buffers. Delaying the trading book capital rules for 2027-30 protects competition with other regions, but a lasting answer is needed.

4. Financing Europe

Better internal models justify reviewing the output floor where it duplicates other safeguards, keeping lower capital charges for low-risk mortgages and possibly some unrated firms, and easing EU-only extras on trade and specialised finance. Revised securitisation rules should also widen market funding.

1. Simplification built on confidence

Speaking in Dubrovnik at a conference hosted by Croatia's HANFA and Luxembourg's CSSF, ESMA Chair Verena Ross, whose term is ending, echoed the Lamfalussy report's call twenty-five years ago for agile regulation. Beyond the question of courage to simplify, she asked whether policymakers have confidence that simpler rules can still work. Complexity can give a false sense of control and, in an unpredictable world, make the system clumsy and less competitive. She rejected indiscriminate deregulation that would weaken investor protection or stability; the aim is a strong supervisory framework, using quality data, convergence and enforcement, that reaches its goals without ever more detailed rules.

2. The cost of fragmentation

She warned that proportionality must not turn into fragmentation: each exemption or national flexibility may make sense locally, but the accumulated differences impose hidden costs on the whole market, making it harder for firms to expand, investors to find opportunities and Europe to compete. A stronger European dimension of supervision should be seen as an opportunity; it will not erase differences between markets but can make them less of a barrier.

3. A joint undertaking and the 2030 picture

Whatever negotiators decide on the market integration and supervision package, she says supervision stays a partnership that combines national expertise with a European view, built through peer reviews, joint actions, colleges and shared methods. For 2030 she pictures supervision more integrated yet rooted in national markets, digital and data-driven, focused on outcomes, with fewer box-ticking duties, lighter reporting, predictable expectations for cross-border firms and investors confident to take part, moving Europe nearer a genuine single market for capital.

1. What makes money trustworthy

Opening a panel at the Jackson Hole symposium, BIS General Manager Pablo Hernández de Cos framed the debate around the foundations of money: a common unit of account; singleness, meaning every instrument in that unit can be exchanged at par for central-bank money with finality; and elastic liquidity, supported by interoperability and financial integrity. Today's two-tier system delivers these through supervised intermediaries but still suffers patchy interoperability, limited competition and inefficient cross-border payments, which tokenisation and distributed ledgers could ease. The test for any innovation is whether it serves rather than erodes those foundations.

2. Stablecoins versus tokenised deposits

On singleness, a stablecoin holder paying someone who accepts a different coin must trade through markets where deviations from par are normal and larger under stress, while tokenised deposits settle in central-bank money and keep par. On interoperability, stablecoins sit on fragmented public blockchains, whereas tokenised deposits, with tokenised reserves as the settlement asset, can be fungible across banks. On integrity, most stablecoin balances sit in self-held wallets and more transfers bypass identity checks, complicating anti-money-laundering rules, whereas supervised, account-based deposits make this manageable. Hence today's stablecoins do not meet the standard of money accepted without questions.

3. Macro-financial effects

If stablecoins scale, reserve choices matter: holding wholesale deposits raises bank funding costs and tightens lending, holding short government bills drains banks' liquid assets, and holding central-bank reserves drains system liquidity, with smaller banks hit hardest. Extra demand for bills would lower short yields and ease fiscal space, so BIS scenarios show a modest net effect. Issuers remain exposed to runs, with fire sales able to strain money markets. Tokenised deposits keep deposit-taking tied to lending, but siloed adoption could favour large banks, and round-the-clock transfers could speed outflows.

4. A policy path

For stablecoins to work as money they would need enforceable par redemption backed by reserves and backstops, par exchange and finality across chains, and consistent anti-money-laundering control, including peer-to-peer transfers; some gaps are fixable by policy, others structural. Digital dollarisation also threatens monetary sovereignty. Tokenised deposits are promising but do not yet exist as interoperable multi-bank systems; challenges include avoiding walled gardens, governance, legal clarity on finality and smart contracts, resilience and migration. He proposes coexistence: tokenised deposits for most payments and settlement, stablecoins in narrow roles under strict regimes or as investment products, with central banks anchoring singleness, promoting interoperability and integrity, and watching credit effects. Project Agorá shows the approach is feasible. The BIS's annual report this year backs the same pragmatic course: fold tokenisation into the two-tier system anchored in central-bank money, and agree consistent international rules for stablecoin arrangements. He added that, in emerging economies, coins tied to foreign money bring dollarisation risks, and the strongest shield is good macroeconomic policy together with effective local payment networks.

1. From saving the world to resilience

Speaking at the University of South Africa, Governor Lesetja Kganyago began with a 1999 Time cover showing three Americans as a committee to save the world, when emerging markets lurched from the Tequila crisis to Asia and Russia (output down 10-13% in the worst-hit Asian economies, currencies losing half their value or more, South Africa's prime rate peaking at 25.5% and its reserves exhausted defending the rand). That view of emerging markets as fragile and dependent on Washington has passed its expiry date: the 2007-09 crisis began in the US, while a core group, among them Mexico, Brazil, Thailand, India, Indonesia and his own country, has gone decades without defaults, IMF bailouts or currency collapses, thanks to home-grown reform.

2. How resilience was built

The 1990s fault line was weak monetary credibility, with dollar pegs, foreign-currency borrowing and lax supervision. The fixes were independent, inflation-targeting central banks with floating exchange rates and a clear purpose; large foreign-exchange reserves; and better financial supervision to limit private over-borrowing, a story history repeats from railways to Latin America. Capital-flow measures, despite the debate, mattered little. Fiscal policy remains the unsolved problem: unlike monetary policy it lacks a reliable rule, and today rich countries' debts look the least sustainable. Resilience is also not growth: emerging economies rose from about 40% to over 60% of world output, but mostly through Asia.

3. South Africa: strength and a silent crisis

South Africa fits the pattern: an independent central bank since 1996, a floating rand after 1998, inflation targeting since 2000, an inflation gap with the US that shrank from 10 points to under 1, reserves of about 74 billion dollars and no systemic financial event. Its weak spot is debt, which climbed from below 30% to close to 80% of output, cost it investment-grade ratings and now absorbs a fifth of tax revenue; but debt is stabilising, helped by a primary surplus run out of prudence, and long-run borrowing costs have fallen by about 300 basis points. Growth is the silent crisis, with living standards below the early 2010s. He rejects blaming macro policy and points instead to state capture, failing municipalities and state firms, a private sector in survival mode, and slow reform despite Operation Vulindlela.

4. The choice

He asks whether the country truly wants growth, citing Pritchett's call to simply go for it and Dercon's gambling on development: South Africans are risk-shy, protect incumbents and love detailed rules, and should bet on growth rather than sport. The country, he concludes, is resilient but not yet flourishing.

1. Outlook after the Middle East war

Christine Lagarde told the European Parliament's economic committee that the euro area was gaining traction, with first-quarter growth of 0.3%, just before the Middle Eastern conflict erupted. The war now weighs on activity, especially services, while manufacturing has held up on stock building and defence spending. June staff projections have growth rising from 0.8% this year to 1.2% next year and 1.5% after that, with weaker domestic demand but solid household balance sheets. Inflation rose to 3.2% in May, driven by energy inflation above 10%, with core inflation at 2.6%. Short-term expectations have jumped but longer-term measures remain near 2%. Projections have inflation averaging 3.0% this year, easing to 2.3% then returning to 2.0% by 2028, with upside risks to prices and downside risks to growth, and the peace agreement remains fragile.

2. The June rate rise

The ECB raised its three key rates by 25 basis points in June, a decision that holds in every staff scenario. It will stay data-dependent and move meeting by meeting, basing choices on the inflation outlook and risks, underlying inflation and the strength of transmission, without pre-committing to a path.

3. How the strategy handles supply shocks

She explained that the 2025 strategy review rests on three principles. First, assess the shock: monetary policy cannot cut energy prices but must judge spillovers to other prices and wages; larger, more persistent shocks have non-linear effects, and strong demand or tight labour markets make pass-through easier. This shock looks smaller than the last episode, and starts from a different context, with inflation near target and policy no longer highly accommodative, though price and wage setting may now be more sensitive. Second, look at risks around the baseline, using scenarios, since big shocks can cause disproportionate deviations. Third, tailor the response: look through small, temporary shocks, make a measured adjustment for a sizeable but short-lived overshoot, and respond forcefully or persistently if inflation would deviate significantly and for long. The ECB is in the middle case, with no evidence yet of de-anchored expectations or second-round effects. She added that monetary policy cannot offset such shocks fully, so energy resilience matters, and thanked the committee for progress on the digital euro legislation.

1. Six new measures

At the Lujiazui Forum in Shanghai, in front of Vice Premier He Lifeng and city leaders, the Governor of the People's Bank of China announced a package of measures. The bank will refine its short-term rate framework: the ad hoc overnight repo window will be set within a quarter point above or below the seven-day policy rate, narrowing the band from 70 to 50 points, and overnight reverse repos may be added to open market operations. A renminbi repo facility will let foreign central banks, international institutions and sovereign funds borrow yuan against high-quality bonds such as Chinese government debt. Six large banks will pilot offshore yuan-foreign exchange trading in the Shanghai free trade zone. The bank is studying an emergency liquidity backstop for non-bank financial firms, provided through swaps only in systemic market stress and conditioned on prudential rules and top-grade collateral to limit moral hazard. An action plan for offshore finance in Shanghai, a central repository of interbank trading and settlement data, an international e-CNY operations centre and a cross-border e-CNY transfer platform complete the list.

2. From banks to markets

China's financing has long relied on bank loans, but this is changing. In 2025, bonds and shares together provided 47% of new financing to the real economy against 45% for loans, the first time markets overtook credit. In the stock of financing, the bank share has fallen from almost all in the 1990s to about two-thirds. Over ten years, property and infrastructure have dropped from over 60% of new loans to about 10%, while five priority areas now take over 70%. Lending to small technology firms grows about 20% a year, technology bonds have reached about 2.6 trillion yuan, and the value of the innovation-focused boards rose nearly 50% in 2025.

3. Why the shift is lasting

Financing to the economy exceeds 450 trillion yuan and broad money 350 trillion, so further rapid expansion is neither easy nor needed. Loans to property and local government vehicles are shrinking, and using existing credit better matters as much as adding new credit; slower but better-allocated lending may become normal. Growth used to rest on property, infrastructure and heavy industry, which borrow long against solid collateral. New sectors in technology, advanced manufacturing and green industry invest in research and intangible assets, carry higher risk and need less bank debt, so start-ups depend on venture and private equity before turning to loans, bonds and shares. China therefore needs diverse markets alongside better-targeted bank credit.

4. Markets built over three decades

China now has a full range of markets, from shares and bonds to gold, commodities and derivatives. Listed companies have grown from eight in Shanghai in the early 1990s to 5 500 worth over 110 trillion yuan, and bonds outstanding from under 500 billion in 1997 to more than 200 trillion, both second worldwide. Currency trading covers over 40 currencies and more than $42 trillion a year. Access schemes and connections with Hong Kong have brought foreign holdings of onshore yuan assets above 10 trillion, and Chinese securities are in major global indices.

5. Five priorities

During the 15th Five-Year Plan, the bank will widen the range of markets and products, including technology boards, long-term investment, asset management and green bonds; deepen market pricing, the government bond yield curve and careful development of rate and currency derivatives; strengthen the legal framework, default resolution and the integrity of underwriters, raters, auditors and lawyers; enlarge macroprudential tools for currency, stock and bond markets to contain contagion; and open further, improving connection schemes, panda bonds, cross-border payments and offshore yuan supply, while supporting Hong Kong as the offshore yuan hub and preventing systemic risk.

1. Beyond the slogan

At the convention of the Federation of European Securities Exchanges, the Chair of ESMA said that after fifteen years of hearing that European markets stand at a turning point, integration has become unavoidable. Efficient markets turn ideas and savings into innovation and jobs, which Europe needs at continental scale.

2. What the data on share trading show

ESMA's recent consultation on equity market structure, based on 2022-2025 transaction reports, finds markets working well overall: addressable liquidity is stable near 85% and order-book trading near 80%. But continuous trading on visible order books is slowly shrinking, mainly on regulated exchanges, whose share fell from about 35% to 27%. Auctions are growing, and frequent batch auctions doubled to over 6%. The combined share of visible books and closing auctions on exchanges and multilateral platforms fell from about 72% to 64%, a concern since closing prices serve as benchmarks for funds and ETFs. Dark trading stays around 4-5%, while systematic internalisers rose from about 5% to almost 9%. ESMA has no fixed view yet and invites comments before 30 June, with a feedback report due later in the year.

3. A major reform package

She called the Commission's market integration and supervision package the most significant capital markets reform in years. It would create a single EU licence for venue groups operating in several countries, ease costly post-trade links so users choose providers on merit, keep rules ready for AI, distributed ledgers, quantum computing and tokenisation, and give ESMA direct supervision of the largest cross-border infrastructures after a short transition, working with national authorities.

4. The wider savings and investments union

Political backing is strong, from the European Council, the Parliament's President and an April roadmap aiming at a single capital market by 2027. Success needs better savings products, financial education and pension reforms such as automatic enrolment; 80% of European pension funds manage under €1 billion. The Listing Act, securitisation changes, the venture fund review and consolidated tapes must all advance, because each pillar supports the others. Failure would mean weaker pensions and firms growing elsewhere. Facts, legal tools and political will are available; what is missing is shared boldness across institutions, countries and the public and private sectors. Citing Goethe's Faust, she urged exchanges to seize the moment and help build an integrated, efficient and attractive European market rather than merely adapt to one more regulatory change.

1. Resilient markets and the integration package

Speaking at the ICMA annual conference in London, ESMA Chair Verena Ross said that despite geopolitical volatility and a clouded outlook, capital markets have stayed resilient, which matters because they stabilise economies, while Europe needs deep, integrated markets to finance a competitive, low-carbon economy. ESMA fully backs the savings and investments union and the market integration and supervision package. Trading and post-trading remain fragmented along national lines; a proposed pan-European trading venue regime would let operators run several venues across member states, and the many securities depositories raise settlement costs and complicate cross-border deals, so connections between hubs, reciprocal links, T2S participation and clearing interoperability would help. For key pan-European infrastructures, centralised supervision would be more consistent and give a clearer view of risk, and ESMA, with fifteen years of experience, says it is ready, though building the capability will be a challenge.

2. Deeper markets, technology and simplification

She cited the EU consolidated tape, now taking shape, to improve transparency, and the move to one-day settlement on 11 October 2027, aligned between the EU and the UK, for which everyone should prepare. Tokenisation could streamline issuance, trading and settlement, embed compliance and give supervisors real-time tools, and the DLT pilot regime shows it working; the package should improve it without creating new fragmentation. Finally, accumulated detailed and duplicative rules create complexity, so ESMA is simplifying the policy framework, focusing supervision where risks are highest and reviewing reporting under market, derivatives and financing-transaction rules to report once and use many times.