Leaseurope: Digital Finance Package
EU UPDATES & INDUSTRY TRENDS
DIGITAL FINANCE PACKAGE ISSUED
The European Commission has recently issued their highly anticipated Digital Finance Package, which includes a digital finance strategy, as well as legislative proposals on digital resilience, crypto-assets, and a retail payments strategy. The package aims to improve the competitiveness of the EU financial sector, as well as addressing concerns related to consumer protection and financial stability. The strategy also sets out the principles the Commission will be promoting to achieve these goals, including removing the fragmentation of the digital single market and promoting data driven finance. Additionally, the Commission will aim to clarify how the legislative framework will apply to AI, as well as the upcoming review of the AML/CFT framework.
COMMISSIONER BRETON DISCUSSES THE DIGITAL ERA WITH THE EUROPEAN PARLIAMENT
On 1 October, the European Parliament Internal Market Committee held an exchange of views with Commissioner Thierry Breton on ICT state-of-play and upcoming legislative initiatives in the digital area. Breton underlined how the current recovery plan is an historic moment in which, for the first time, all Member States needs are taken into account. He announced that at least 20% of EU funds will go to the digital sector, to invest in new technologies and close the digital divide. He also spoke on the need for a clear regulatory framework for data, especially industrial data where, for example, integrating AI has the potential to strengthen the manufacturing process. He announced that as of next year, new initiatives will assess risk areas for AI and the implications of machine learning algorithms.
EBA REPORT SHOWS NPL STABILITY FOR BANKS IN Q2, ALTHOUGH DETERIORATION IS STARTING TO APPEAR
The European Banking Authority (EBA) published its quarterly Risk Dashboard covering Q2 2020 data and summarising the main risks and vulnerabilities in the EU banking sector. Whereas capital ratios held up well, there are indications that the crisis is beginning to have an impact on asset quality. With increasing cost of risk, profitability continued its declining trend. The results of the Leaseurope Index for Q2 show that this impact on provisions and profitability is also mirrored in the leasing industry.
EBA PUBLISHES WORK PROGRAMME FOR 2021
The European Banking Authority (EBA) has published its annual work programme for 2021, describing their activities and tasks for the coming year and highlighting key strategic areas of work. Their focus will be on six strategic areas: (i) supporting the deployment of the risk reduction package and the implementation of effective resolution tools; (ii) reviewing and upgrading the EU-wide EBA stress testing framework; (iii) becoming an integrated EU data hub by leveraging on the enhanced technical capability for performing flexible and comprehensive analyses; (iv) contributing to the sound development of financial innovation and operational resilience in the financial sector; (v) building the infrastructure in the EU to lead, coordinate and monitor AML/CFT supervision; and (vi) providing the policies for factoring in and managing Environmental, Social and Governance (ESG) risks. Regarding its horizontal workstreams, the EBA will continue working towards establishing a culture of sound and effective governance and good conduct in financial institutions, and in particular focus on addressing the aftermath of COVID-19.
See the full work programme here.
COMMISSION ISSUES CMU ACTION PLAN
The European Commission has recently issued their new Capital Markets Union (CMU) Action Plan, which follows on from the measures implemented as part of the 2015 CMU Action Plan. It emphasises that the CMU can speed up the EU’s recovery from the COVID-19 pandemic, while also providing the funding needed to ensure the EU’s recovery is green, digital, and more accessible for SMEs. The new plan includes sixteen targeted measures aimed at achieving these aims, including harmonising insolvency law in targeted areas (such as non-bank insolvency law) and the possibility of introducing a requirement for Member States to support measures aimed at improving financial education. The report also states that the Commission will review the current regulatory framework for securitisation to enhance banks' credit provision to EU companies, in particular SMEs. In addition, the European Parliament recently voted to adopt a resolution on the CMU, which ultimately aims to further develop the CMU.
You can find the full action plan here.
STAKEHOLDERS DISCUSS AI IN URBAN MOBILITY
On 30 September the Forum for Mobility and Society hosted a webinar on “The smart and safe road to AI in urban mobility” which included participants from the European Parliament, industry representatives and other stakeholders. MEP Henna Virkunnen (EPP) highlighted the need for a step-by-step and neutral risk approach (in opposition to those who want a risk-based approach for high risk sectors like transport and health). The European Parliament also discussed their recent study.“Artificial intelligence: How does it work, why does it matter, and what can we do about it?” analysing regulatory, technological and societal challenges. In terms of AI applications for smart and sustainable mobility, participants discussed better accessibility (such as on-demand options for rural areas), reduced and smoother traffic (via shared and connected cars), and reduced accidents. Necessary infrastructure remains a challenge (e.g. adapting road signs and traffic lights), as does connectivity, security, safety, privacy and sustainability. Manufacturers noted that AI applications for vehicle condition monitoring and maintenance prediction would be particularly beneficial for fleet owners and drivers, as well as need for regulation to be technology-neutral.
Read more about this event and more here.
LEASEUROPE DISCUSSES AUTOMOTIVE RENTAL AT THE EUROPEAN TOURISM CONVENTION
On 12 October, Leaseurope participated in a virtual European Tourism Convention hosted by the European Commission together with other stakeholders, where we elaborated on the importance of automotive rental in the future of a sustainable, innovative and resilient European tourism ecosystem. During the plenary session consisting of various tourism stakeholders, Leaseurope’s closing remarks underlined that this is a key time to address the remaining challenges in transport and mobility, including multimodality, cross-border operations and the sharing of data.
Read more in our full press release here.
LEASEUROPE POSITIONS LEASING AS SUSTAINABLE IN ECB CONSULTATION FOR GUIDE ON CLIMATE-RELATED AND ENVIRONMENTAL RISKS
Leaseurope responded to the ECB consultation on its Guide on climate-related and environmental risks. Our technical comments highlighted the fact that there is currently no common agreed upon standard among Member States on which activities are deemed sustainable, which would ultimately undermine the usefulness of the ECB’s Guide. We also noted that, given the significant contribution the leasing industry makes to enabling companies to meet the financial and environmental targets, leasing should be recognised as a specific key performance indicator (KPI). In addition to the technical comments provided in the guide, we took the opportunity to highlight to the ECB how the leasing and automotive rental industries are in many ways ideally placed to act as a facilitator of the green transition, and to support the Commission’s stated aims as outlined in the Green Deal and Sustainable Finance Strategy.
Read our full response here.
WORK WITH AFCAR ON MVBER AND ISO STANDARDS
In a dedicated meeting of AFCAR (Alliance for the Freedom of Car Repair in Europe), Leaseurope recently discussed the Motor Vehicle Block Exemption Regulation (MVBER). The European Commission is assessing whether the MVBER framework needs revision and the meeting participants agreed to develop an AFCAR position on this which focuses on the need to extend the regime and related benefits for the industry. This will serve as a basis to reply to the upcoming Commission consultation, which has been recently launched and is open until 25 January 2021.
AFCAR also clarified its position to the Commission on the current revision of the framework for vehicle repair and maintenance information (RMI), notably in relation to standardised access to RMI through the Vehicle Manufacturer (VM) Website (ISO 18541). This standard dates back to 2014 and therefore may not fit current industry needs. Any future update done in an international (ISO or CEN) body should be scrutinised first by the Commission before being proposed for referencing into EU legislation.
LEASEUROPE DISCUSSES DATA METRICS WITHIN THE CAR LABELLING DIRECTIVE
The European Commission is preparing a study to support the revision of the current Car Labelling Directive. To this end, Leaseurope and other stakeholders were surveyed on how this Directive can help raise consumer awareness regarding light duty vehicles' fuel economy, CO2 emissions and air pollutant emissions. In our response, we support an electronic version of the car label but stress that taking into account emissions from the entire vehicle life cycle would first require solving a political debate on how to determine calculations. A Total Cost of Ownership (TCO) indicator, in which leasing companies are experts, would be difficult to implement for a consumer label as overall costs deviate substantially per country, as well as whether a vehicle is leased or not. Additionally, we stressed that including metrics like electronic vehicle range and charging times would require manufacturers to agree on a common methodology. We also underlined various additional points regarding data privacy, used vehicles and rental cars.
You can access an overview of the study here and our survey response here.
LEASEUROPE ADDRESSES CROSS BORDER INCONSISTENCIES IN COMMISSION'S CONSULTATION ON AI
Leaseurope has recently responded to the European Commission’s consultation on e-ID, which covers the EU legal framework for digital identification and trust services such as eSignatures. In our response, we highlighted the fact that the way e-ID operates across Member States remains highly fragmented, and how this causes particular problems for consumers who wish to use e-ID across borders. On this point, we specifically noted the confusion the different means of proving your identity can cause for consumers. We also highlighted the major benefits associated with enabling consumers to use e-ID, including enhancing the consumer friendliness of online services and allowing both consumers and companies to save time and money by avoiding the administrative hurdles normally associated with traditional means of proving identity.
Read our full response here.
EU GREEN WEEK
From 20 - 22 October, the EU Green Week 2020 conference will take place online. This year’s edition will focus on biodiversity and nature, and the green recovery, examining how EU policies such as the European Green Deal can help protect and restore nature, leaving it room to recover and thrive. You can register here.
INNOVATION & CYBER THURSDAYS
From 22 October until 19 November, the European Banking Federation is hosting online events each Thursday on innovation and technology. The first topic on 22 October covers cyber security and resilience, while subsequent webinars address the data economy, open finance, fintech, payments and more. You can register to these events here.
FLEET EUROPE SUMMIT 2020
On 17 and 18 November, the Fleet Europe Summit 2020 will take place as a virtual event. It will focus on sharing best practices, learning experiences, networking, creating business opportunities and on celebrating success within the fleet industry through the Fleet Europe Awards. The details of the programme will be shared in the coming weeks. Registrations are now open here.
FLEET AND MOBILITY LIVE 2020
From 17 – 19 November, Virtual Fleet and Mobility Live 2020 will be discussing the future of fleet management, including the chance to hear from organisations of all types with fleets of all sizes. Leaseurope will be participating in the panel discussion on “How MaaS will transform business mobility”, you can read more about our participation here. Registration for the event is free of charge by clicking here.
On 1 October the General Assembly met via conference call.
On 7 October the Legal Affairs Committee met via conference call.
On 8 October the Prudential Supervision Committee met via conference call.
On 20 October the Securitisation Working Group met via conference call.