Finance Watch

As we close out this year, we want to express our heartfelt appreciation for your collaboration and support! Your involvement has been invaluable in helping make finance serve society. Looking ahead to 2025, Finance Watch remains committed to building a financial system that empowers people and protects our planet. We envision a system that fosters economic stability, sustainability, and social justice. A fair and sustainable future isn’t just a wish, it’s a necessity. ❄️ From everyone at Finance Watch, we wish you a very happy holiday season and a joyful new year!

Time for a reality check on Securitisation.  ‘Unlock growth!’ ‘Enhance competitiveness!’ These bold claims are increasingly used to position securitisation as a cornerstone of the Capital Markets Union (CMU). But do they hold up to scrutiny? In response to the Commission’s consultation on securitisation, Finance Watch contends that policymakers are overly optimistic about its revival. 📉 More Debt, Not the Real Solution Encouraging securitisation could make Europe even more dependent on bank debt, instead of addressing the real problem for the CMU, a lack of equity investment. What businesses need is more sustainable, long-term funding, not just more bank loans. 💡 Small Businesses Won’t Benefit Much By 2023, SME loans were just 10% of securitised assets in Europe. Why? SMEs lack collateral, their loans vary too much in size and terms, and pooling them into homogenous securitisation portfolios is costly and difficult. ⚠️ Risking Taxpayer Money Proposals for platforms with public guarantees could put taxpayers on the hook without fixing deeper market weaknesses like poor liquidity and integration. 🌐 Systemic Risks Remain Features of securitisation, like breaking loans into risk levels (tranches), result in similar exposures being spread across the financial system, in particular among less regulated non-bank entities. This can make markets more fragile during economic downturns. Securitisation is not the magic solution to Europe’s funding challenges. The CMU’s success depends on reforms that build a truly competitive and integrated capital market, not one which entrenches the European economy’s dependence on banks and debt-based financing. Read Finance Watch’s consultation response for a closer look.  #CMU #Securitisation #FinanceWatch  #SMEFinance #CapitalMarketsUnion #FinancialStability #DebtFinance #Securitisation #EUCompetitiveness #FinancialReforms #Nomorecrises #SIU https://lnkd.in/e_hrqZHb

🌍 Banks are still putting short-term profits over the wellbeing of our planet! But better regulation can help tackle harmful practices. 📢 In 2025, Finance Watch will continue to push for initiatives that #ShiftTheBalance toward a sustainable future. 🔥 Climate science warns us of widespread economic destruction yet decision makers don’t take it into account! This is because our economic models are not fit for purpose. Finance Watch is calling for realistic scenarios & sound economic models. 🛢️ Oil & gas are still largely financed by banks & insurers. It could turn into a financial crisis! That’s why Finance Watch calls to enhance capital buffers for banks & insurers. ‼️ Today, #Greenwashing remains a systemic problem. That's why at Finance Watch we don’t just want solid standards, but also the end of misleading claims. Help Finance Watch shift the balance — no gift is too small! 👉 https://lnkd.in/e9wJiT32

📢 Companies are using personal data to target consumers’ unconscious biases. Here’s how. 🔍 Through unsolicited personalised advertising, companies use AI to analyse consumer data online and deliver individualised marketing. These ads target users with tailored content -- without their knowledge or prior consent. ⚠️ For example, ads may push someone with compulsive buying tendencies toward consumer credit, leading them to overspend and fall into debt.   ❗Unsolicited personalised advertising exploits consumers' unconscious biases and manipulates behaviour, often without them even realising. 🚫 As companies gather more and more data, banning manipulative tactics like unsolicited personalised advertising would better protect EU consumers. Finance Watch is advocating an end to unsolicited personalised advertising and other deceptive tactics in the retail and financial sector. Explore how 👉 https://lnkd.in/epHgiQEX #FinancialInclusionFriday #ConsumerProtection #Data #DigitalFairness #AI

❗Debt is straining a growing number of households in Europe. ↗️ With the share of over-indebted households expected to reach 11.3% by 2032, it’s time for EU lawmakers to lay down stronger rules for creditors and credit intermediaries. 🪄 Finance Watch believes some key changes to EU legislation could provide consumers relief from over-indebtedness and the lack of affordable housing: ✅ Require creditors to offer both fixed and variable rate mortgages that aren’t bundled with unnecessary add-ons  ✅ Strengthen rules to prevent the mis-selling of mortgages to households unable to repay them, and to prevent financial exclusion based on discrimination ✅ Enforce fairer forbearance measures when consumers face financial hardship ✅ Improve oversight of non-bank mortgage lenders Discover how Finance Watch is advocating debt relief, affordability and fair access in EU housing. 👉 https://lnkd.in/euBNnstG #FinancialInclusionFriday #ConsumerProtection #AffordableHousing #DebtRelief #MortgageCreditDirective

NBFIs now manage more assets than banks, but lighter regulation increases systemic risk. Non-banking financial institutions (NBFIs), such as investment funds, pension funds and private equity firms, control a staggering 41% of total EU financial assets. 📉 Why it matters - Recent events have shown how risks in NBFIs spill over and impact everyone: 🏦 The UK pension fund crisis (2022): Rising interest rates triggered a mass sell-off of government bonds (gilts), imposing huge losses on the leveraged pension funds and bringing the gilt market to the brink of collapse. 💸 The “dash for cash” during COVID-19: Investment funds rushed to sell assets, worsening market chaos and liquidity shortages. These incidents highlight how risks in the NBFI sector can create domino effects, impacting everyone, from small businesses to individual savers. ⚠️ The lesson - Differences between bank and non-bank regulation must be levelled up where risks are the same. That’s why Finance Watch recently responded to the European Commission’s consultation on NBFIs, calling for: 🔍 Enhanced transparency on the risks of NBFIs and their interconnectedness with banks. 📑Oversight for unregulated entities like family offices and sovereign wealth funds, where they pose risks to the stability of the financial system. 💪 System-wide stress tests to uncover hidden risks. 🌍 Better climate risk rules to stop vulnerabilities from migrating to unregulated areas. Finance Watch’s recommendations aim to reduce risks and ensure a safer, fairer financial system for all. 📖 Read our full response for more insights: https://lnkd.in/ewZinVKu #NoMoreCrises  #FinanceWatch #FinancialStability #Regulation #SustainableFinance #NBFI

🔧 EU lawmakers have the tools to address skyrocketing housing costs. ↗️ With housing costs surging more than 10% since 2022 and the share of over-indebted households expected to reach 11.3% by 2032, legislators have the means to prioritise affordable housing and safeguard EU consumers. 🪄 Finance Watch is advocating a few key updates to the Mortgage Credit Directive to bring consumers relief from high housing costs. ✅ Oblige lenders to offer both variable and fixed rate mortgages that aren’t bundled with unnecessary add-ons  ✅ Strengthen protections to prevent the mis-selling of mortgages to households unable to pay them, and prevent financial exclusion based on discrimination ✅ Enforce stronger forbearance measures when consumers face financial hardship 🛡️The bottom line - it’s time to better protect EU consumers from soaring housing costs and burdensome debt! 💡 Read more from Senior Research & Advocacy Officer Peter Norwood 👉 https://lnkd.in/erPckuUm 📃 Explore Finance Watch’s full recommendations 👉 https://lnkd.in/efKtjc5c #FinancialInclusionFriday #DebtRelief #ConsumerProtection #AffordableHousing #MortgageCreditDirective

🏠 European consumers are being squeezed by high housing costs. ↗️ #Housing costs have surged more than 10% since the interest rate hike cycle began in 2022! Rising costs have driven up variable mortgage rates, meaning hardship for potential borrowers and homeowners. 🪄 Finance Watch believes a few key changes to current legislation could bring consumers relief from the #AffordableHousing crisis: ✅ Require creditors to offer both fixed and variable rate mortgages that aren’t bundled with unnecessary add-ons  ✅ Strengthen rules to prevent the mis-selling of mortgages to households unable to repay them, and to prevent financial exclusion based on discrimination ✅ Enforce fairer forbearance measures when consumers face financial hardship ✅ Enhance the supervision of non-bank mortgage lenders 🛡️ Legislators should bolster #ConsumerProtection by laying down stronger rules for creditors and credit intermediaries. To learn how Finance Watch is advocating #affordability, fair access and #DebtRelief in EU housing, explore our latest position paper. 👇 https://lnkd.in/euBNnstG #FinancialInclusionFriday

🌍 As #COP29 unfolds, let's ensure that investors are part of the solution! 🌱Empowered shareholders can ensure companies meet #ParisAgreement targets. Finance Watch is calling for an EU-wide revision to the Shareholder Rights Directive (SRD), equipping investors with the tools to champion sustainable business models and help enable the net-zero transition. Our latest policy brief proposes to protect shareholder rights, promote greater transparency in corporate governance, and enhance sustainability by: 🗳️ Allowing shareholders to have a binding say on the company’s transition plan 🌱Requiring transparency from investors regarding their engagement activities to meet their transition plan targets 💶Lowering ownership requirements for proposing resolutions and limiting board vetoes 🤝As global leaders at COP29 work towards fossil fuel phase-out, Finance Watch argues that empowered investors can be the stabilising force in the climate transition, reducing the risk of delayed and brutal divestment while fostering corporate accountability. Explore our recommendations to see how shareholder rights can drive a resilient green economy! Read our policy brief 👇 https://lnkd.in/eU3Sk2iC

European budgetary rules are a barrier to climate action that will have enormous future costs. 🚫 Outdated budget rules are holding Europe back from making essential investments in climate mitigation and adaptation. The strict rules that cap deficits at 3% of GDP and debt at 60% are costing Europe's future a fortune. 📉 If we don’t act, the bill will be staggering. Recent economic modelling from a network of 141 central banks (NGFS) shows a negative impact on GDP of at least 30% for a 3°C rise in global temperatures, with similarly devastating effects on public budgets. Where are the plans to prevent such a massive economic burden? 🌐 As global leaders gather in Baku this week, the cost-benefit ratio of action vs. inaction should guide the discussions. Do we invest now to secure our future, or delay and face catastrophic costs later? 🌍 Let’s rethink “frugality”. Fiscal responsibility means investing in resilience and climate adaptation today, not passing on an ever-mounting tab to the next generation. 📖 To learn more about the costs of inaction, read Chief Economist at Finance Watch, Thierry Philipponnat's recent op-ed in Le Monde. #ClimateAction #FiscalResponsibility #EuropeanBudget #Sustainability #FutureEconomy #ClimateCrisis #NGFS #PublicInvestment #BakuSummit #CostOfInaction https://lnkd.in/eipxYpG2