Building resilience in the European Financial Services sector

Saturday, 24/10/2020

While the Covid-19 pandemic has drastically reversed any sense of economic and social “normality”, governments and international institutions are increasingly focusing on easing the economic impact of the lockdown and, at the same time, defining and achieving a “new normal”. The pandemic has demonstrated the need to build a more resilient growth model and has accelerated digital transformation in many sectors. 

Within this context The Economist Events organized the  virtual event EUROPE’S LANDSCAPE IN THE SHADOW OF THE PANDEMIC- Romania: Transformation - Recovery - Resilience"  on October 22nd 2020. The event was viewed by more than 3700 people coming from 24 countries.

Dr. Kostas Tzioumis, joined the event and the panel discussion "Building resilience in the European Financial Services sector" to share his thoughts on the unique nature of this crisis , the new risks that banks could be facing if the pandemic continues and the much-needed measures to ensure the resiliency of the European banking sector going forward.

The panel, chaired by Matthew Sherwood, senior Europe economist at The Economist Intelligence Unit, consisted of Charlotte Ruhe, managing director, central and south eastern Europe, EBRD , Luca Lazzaroli, director-general, deputy head of operations, European Investment Bank, Colin Ellis, chief credit officer, EMEA, Moody’s Investors Service and Sergiu Oprescu, president, Romanian Banking Association.

Dr. Tzioumis pointed out that the current economic crisis is unique because it is global, it is exogenous to the banking sector, and it is based on non-economic factors that cannot be quantified using traditional financial risk management tools.
To this end he underlined that the  even though the European banking sector was well-capitalized at the start of the pandemic, the sector’s liquidity crisis is transitioning to a solvency crisis. 
He also noted that "Perhaps the best cost-cutting approach for the banks is to adopt new technologies" and stressed the need for a combination of policies and decisive measures to shape the post-pandemic economies. These policies will inevitably create “winners” and “losers” across industries and countries.

"Nobody knows how the pandemic will unfold or when it will end. That is why executives and policy makers must be decisive and agile, in order for the European financial services sector to be resilient while transitioning to the post-pandemic world" he concluded.


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