Strong bank capital is not a drag on the economy. It is precisely what *allows banks to keep lending* through stress!
And lending to productive parts of the economy is the Commission's objective, right?
Cut the clutter, not the #safeguards! Read more 👇 3/3
As the @ec.europa.eu reviews post-2008 bank safeguards, the financial industry wants to reduce capital requirements: the rules that determine banks' capacity to absorb losses when shocks hit.
But simplifying rules shouldn't mean cutting the protections that make banks resilient! 2/3
After the financial crisis, bank rules were tightened so banks could absorb losses instead of passing them on to the public.
Now, the debate is being turned on its head...
A 🧵on where the EU is going wrong on the #CompetitivenessAgenda & our recommendations for a safer capital framework. 1/3
In a report by @carbontracker.bsky.social & @exeter.ac.uk more than 60 climate scientists say financial models don’t account for the economic shocks of climate change.
Finance Watch calls for:
🌱 Stronger capital requirements for fossil fuel exposures
🌱 Qualitative scenarios aligned with science
🧵7/7
Planning for a low carbon transition
💡 Why it mattered in practice
🔗 Read the full Annual Report 👉 www.finance-watch.org/blog/finance...
🧵6/7
Climate related risks in financial supervision
💡 Why it mattered in practice
🔗 Read the full Annual Report 👉 www.finance-watch.org/blog/finance...
🧵5/7
Artificial intelligence in finance
💡 Why it mattered in practice
🔗 Read the full Annual Report: www.finance-watch.org/blog/finance...
🧵4/7
Digital euro
💡 Why it mattered in practice
🔗 Read the full Annual Report 👉 www.finance-watch.org/blog/finance...
🧵3/7
Financial stability and efforts to ease rules on transferring loan risk
💡 Why it mattered in practice
🔗 Read the full Annual Report 👉 www.finance-watch.org/blog/finance...
🧵2/7
The greenwashing of financial products and services
💡 Why it mattered in practice
🔗 Read the full Annual Report 👉 www.finance-watch.org/blog/finance...
What do financial rules have to do with everyday life
Financial policy may seem technical, but it affects households, businesses and society as a whole. 📄 Our latest Annual Report explains why key debates in 2025 mattered in practice.
🔗Read the report 👉 www.finance-watch.org/blog/finance...
🧵1/7
The EU's exposure to energy shocks is determined by its own policy choices.
Europe can get the fiscal space it needs to invest properly by giving markets what they want: more safe EU debt! And if the money raised is committed to a credible green transition, private investment will follow. 💶 3/3
Energy shocks are wrongly treated as events to endure, rather than problems to solve. Yet we know that Europe is vulnerable because of it’s dependency on on fossil fuels.
The green transition is our path towards energy sovereignty and macroeconomic stability. 🌱 2/3
💥 Yet another energy shock has hit Europe.
From the 2021 gas squeeze to Russia’s invasion of Ukraine and now the Iran war, the path ahead is familiar: higher inflation, tighter monetary policy, and more pressure on public finances.
A 🧵 on how different choices could lead us out of this crisis. 1/3
🛡️ With risks from private credit, debt volatility, geopolitics, digital assets, and climate, this is not the time to lower defenses.
Competitiveness rests on resilience. A stable financial system is the foundation for lasting growth. 📈
🏛️ That matters in Brussels right now. The EU is reviewing banking rules put in place after the 2008 crisis. Where simplification is necessary, it should strengthen the framework, not weaken safeguards or lower capital requirements.
⚠️ But that is also the danger. When there is no crisis, people can forget why the rules protecting the financial system were introduced in the first place.
💥 At the ECON committee yesterday, Andrew Bailey said success in financial stability is when “nothing happens”. In simple terms: when the financial system is stable, people stop noticing it.
www.euractiv.com/news/economy...
Europe's fossil fuel dependence has become a critical vulnerability.
As the @ecb.europa.eu puts it: "The real question is no longer whether Europe can afford to make the energy transition. It is whether it can afford not to."
Europe’s resilience demands renewed ambition on #transition policies!
What shaped Finance Watch’s work in 2025, and why does it matter?
Our 2025 Annual Report is now out. It looks back at a year marked by economic pressures, competitiveness and simplification in European financial policy debates.
Read it here 👉 www.finance-watch.org/blog/finance...
🚨 That is why policymakers should act now: better disclosure from private funds, a clearer view of risks across the system, and stronger oversight of non bank finance.
🤔 You might think: fine, some risky loans get exposed and the market adjusts.
But private credit is not isolated.
Banks are tied to it through funding and leverage.
So stress in private credit can feed back into banks and then into the wider economy.
🏢 When a private credit fund lends to a company, there is often less visibility, less oversight, and fewer safeguards than in bank lending.
That is why investors are starting to worry about what is inside these funds, and whether those loans are really worth what they seem.
🏦 When a company borrows from a bank, the bank checks whether it can repay and has to hold capital against that risk. Those are some of the safeguards strengthened after 2008.
Why is everyone suddenly talking about private credit? 🔍
To understand why investors are getting nervous, it helps to compare private credit with bank lending.
www.wsj.com/economy/is-a...
Financial regulation matters for society and the real economy.
Finance Watch recently met European Commissioner Maria Luís Albuquerque, continuing the dialogue with a public-interest perspective on financial stability and reform.
Learn more 👉 www.finance-watch.org/policy-portal
Post-2008 reform was supposed to make the system safer.
So why are regulators now easing capital rules for the largest banks? Pia Malaney looks at the quiet return of too big to fail. www.ineteconomics.org/perspectives...
Plus de 60 climatologues alertent⚠️
La modélisation économique du climat sous-estime le risque climatique ce qui donne un prétexte à l’inaction et augmente le risque de crise financière climatique.
Lire le billet👉 www.finance-watch.org/leblog/irrea...
#ClimateSystemicRiskBuffer
Every day, digital platforms manipulate people and unfairly influence their choices online.
Finance Watch, alongside @beuc.eu and a broad civil society coalition, is calling for stronger digital consumer protection in Europe via the #DigitalFairnessAct.
Read more 👇
Isabelle Buscke, Secretary-General of Finance Watch
🚨 Is regulation really the reason behind Europe’s competitiveness challenges?
Tomorrow, join our Secretary-General @ibuscke.bsky.social at the webinar hosted by @thegoodlobby.bsky.social and @fnlab.bsky.social to explore how we can tackle deregulation narratives!
Register now 👉 bit.ly/4ru7oUa
