In questo numero, aggiornamenti sulla proposta di Basilea IV di Leaseurope, la risposta di Leaseurope alla consultazione dell'EBA sulle grandi esposizioni e la recente serie di interviste online Leaseurope Industry Leaders Live. Il programma completo sui lavori della Commissione per il 2022, la consultazione sulla cartolarizzazione, la revisione della governance economica dell'UE, il primo vertice europeo sugli investimenti sostenibili e le nuove regole per la divulgazione dei prodotti legati alla tassonomia. Infine aggiornamenti sul pacchetto Fit for 55, AI, energia e camion a noleggio.
Di seguito la Newsletter completa (in inglese)
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LEASEUROPE PROPOSALS INCLUDED IN THE EUROPEAN COMMISSION'S LEGISLATIVE PACKAGE ON BASEL IV
The European Commission has published a review of EU banking rules (the Capital Requirements Regulation (CRR III) and the Capital Requirements Directive (CRD V). The legislative package is the implementation of the Basel IV agreement in the EU. The proposed CRR III includes some of the key Leaseurope proposals to mitigate the impact of Basel IV on leasing companies and to adequately adjust the EU prudential framework to the low risk profile of leasing. The text includes a specific paragraph for leasing, which recognises the high level of expertise and the strong risk management developed over the years by our industry. The EBA has been mandated to produce their own research report by 30 June 2026 on the appropriateness of the Basel risk parameters applicable to leasing exposures, in particular new collateral haircuts and regulatory values for secured LGD. This research should also include default and loss statistics for leasing by asset type and business model. Following this report, the Commission may revise the calibration for leasing via a delegated act, if appropriate. In the interim, leasing has been granted a five-year phasing in period for applying the new risk parameters under the A-IRB approach. In addition to this leasing specific initiative, some of our main proposals in various other areas of the regulation are also taken into account. These proposals, if approved at the end of the EU legislative process, will save our industry a significant amount of regulatory capital compared to the Basel text, which will allow our companies to lease more and at better rates. The proposal which is a significant achievement for the leasing industry positions us in an advantaging starting point in the negotiations with the European Parliament and the Council of the EU, which we expect to last until end 2022/ early 2023. You can find all the full regulatory proposals here.
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LEASEUROPE INDIUSTRY LEADERS LIVE: DIGITALISATION IN ASSET FINANCE AND RENTAL
On Thursday 7th October Leaseurope hosted a webinar to discuss digitalisation with industry leaders Peter Hupfeld, CEO at Nordea Finance, and Ylva Oertengren, COO at Simply Finance, including how to build an effective digitalisation strategy, the impact and lessons learned during COVID-19, legacy system challenges versus newly built infrastructure, and the potential of new technologies for leasing and rental. Per Högberg, Director of Asset Finance at Banqsoft, also gave an interesting intervention. Speakers agreed that the digital strategy is both customer driven and cost reduction driven. The customer experience differs in different markets (some demand e-signing solutions, some do not), therefore it is important to give options as there is no “one size fits all”. Data analytics is key to drive decisions but also insights from the data are an opportunity to be creative on what more can be offered to clients. It is also important that the full value chain goes digital and continuously changes, as well as working with likeminded suppliers. Threats to digitalization may come from regulations: for example, it could be challenging to onboard clients fully digitally in line with the new Consumer Credit Directive requirements. You can rewatch the webinar here. |
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LEASEUROPE INDUSTRY LEADERS LIVE: OPPORTUNITIES AND CHALLENGES FOR LEASING AND RENTING GREENER ASSETS
The second webinar of the series, hosted online on 14 October, dealt with leasing greener assets. Marije Rhebergen, Head of Sustainability at DLL, considered customer needs and regulations to be key drivers of sustainability and that the EU green deal and its targets can be seen as a huge business opportunity. ESG (Environmental, Societal, Governance) reporting is also a top priority and has been upgraded due to the new EU Taxonomy regulation, checking customer compliance, risk management, risk mitigation and publishing results in an annual report. DLL also reports on the circularity of their business (e.g., second-hand and refurbished equipment). Beat Mungenast, COO at Raiffeisen Leasing, mentioned new business opportunities for equipment finance in energy, heating and photovoltaic. For the construction sector an example is electric excavators. In this regard, government subsidies can help but the industry should not rely on them. Finally, panelists agreed that clients can raise their ESG rating by making use of leasing and that sustainability and profitability can go hand in hand. You can rewatch the webinar here. |
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LEASEUROPE INDUSTRY LEADERS LIVE: THE PATH TO CO2 NEUTRALITY FOR AUTOMOTIVE FLEETS
On Thursday 21st October Leaseurope discussed carbon neutral fleets with industry leaders Tim Albertsen, CEO at ALD Automotive, and Giacomo Carelli, Chairman of Leasys and CEO at FCA Bank, including their strategic vision, the operational realities, specific challenges, the shifting roles of partners and electric LCVs. Edward Kulperger, Senior VP for Geotab Europe, also gave an interesting intervention regarding data. They discussed regulation and how this does not provide clarity in terms of strategy and execution (lack of infrastructure, incentives are ending for plug-in hybrids, money from taxes on fuels will not be there anymore). Leasing companies are trying to promote subscription models as a flexible way to test electric vehicles although this presents challenges in terms of distribution channels, asset management etc. Speakers also mentioned pilot projects for hydrogen, e-bikes and the importance of intermodality. GEOTAB allows data to be retrieved from 2.5 million connected vehicles (e.g. fuel level, EV battery level, odometer) and is helping cities in monitoring their air quality via their air quality programme in partnership with the city of Aachen. You can rewatch the webinar here. |
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LEASEUROPE DISCUSSES BASEL IV AND SUSTAINABLE MOBILITY AT ASSILEA'S ANNUAL CONFERENCE
Leaseurope took part in the ASSILEA Annual Convention LEASE2021, which this year took place as a hybrid edition. Rafael Alarcón Abeti, Leaseurope’s Chief Adviser for Prudential & Capital Markets, presented on the impact of Basel IV for leasing companies and how to mitigate it. He explained in detail Leaseurope’s proposals to recognise the low risk profile of leasing within the European prudential regulatory framework. Elisa Falliti, Leaseurope’s Senior Adviser for Automotive Affairs, was part of the panel discussion on sustainable mobility, updating attendees on the relevant initiatives from the European Commission’s Fit for 55 Package. She underlined that sustainable mobility goes hand in hand with connectivity as the need for data is crucial to deliver multimodal mobility and manage electric vehicles, which will both help to deliver the European Commission Smart and Sustainable Mobility Strategy.
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EBA CONSULTATION ON LARGE EXPOSURES SHOULD NOT TREAT LESSORS AS SHADOW BANKS
Leaseurope responded to an EBA consultation setting out criteria for the identification of shadow banking entities for the purposes of reporting large exposures. We highlighted that the technical standard should clearly state that exposures to leasing companies that are regulated and supervised should not be treated for the purpose of identification as exposures to shadow banks. You can find our full response here. |
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IASB CONSIDERS DEFERRING LEASE ACCOUNTING CHANGES FOR SMEs
At its November Board meeting, the International Accounting Standards Board (IASB) tentatively decided to consider amending its IFRS for SMEs standard to align with IFRS 16 for leases in a future review rather than as part of the current review. If this is eventually confirmed by the IASB Board next year, it would mean that the leasing part of IFRS for SMEs will be unlikely to change for several more years. IFRS for SMEs is not approved for use in the European Union but national accounting standard setters often refer to changes in IFRS for SMEs when thinking about new versions of their own SME accounting rules. Last year, Leaseurope issued a joint response to the IASB, together with the Equipment Leasing and Finance Association (ELFA) in the United States and the Canadian Finance and Leasing Association (CFLA), calling for independent cost-benefit analysis before any decisions are taken on extending IFRS 16 rules to smaller businesses. We pointed out that the costs to smaller businesses would be proportionally higher than those for larger companies, and the benefits lower as users of SME accounts have different primary objectives compared to those of listed companies. Read the 2020 press release here. |
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EU UPDATES & INDUSTRY TRENDS
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EUROPEAN COMMISSION WORK PROGRAMME 2022
The Commission adopted its 2022 Work Programme, setting out the next steps in its transformative agenda towards a post-COVID-19 Europe that is greener, fairer, more digital and more resilient. This programme contains 42 new policy initiatives across six headline ambitions including; European Green Deal, Europe fit for the digital age, economy that works for people, stronger Europe in the world, promoting our European way of life and a new push for European democracy. Better regulation will also continue to support sustainability and the digital transformation, by focusing on the ‘do no significant harm' and ‘digital-by-default' principles. New topics of relevance to Leaseurope being introduced in the work programme include the extension of carbon trading to transport and housing, CO2 emission standards for heavy-duty vehicles, transport and logistics emissions, the right to repair, AI, supply chain initiatives, cyber resiliency, multimodal digital mobility services, insolvency and SME finance. The Commission has also introduced a “one in one out” approach to new legislation to ensure that regulatory burdens do not continuously increase. Read the full programme here.
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CALL FOR EVIDENCE ON SECURITISATION
The European Commission have prepared a Call for Advice to the Joint Committee of the European Supervisory Authorities (ESAs) to help with the assessment of the current prudential treatment of securitisations. In particular, the Commission seeks the Joint Committee’s assistance to assess the recent performance of the rules on capital requirements (for banks, and insurance and reinsurance undertakings) and liquidity requirements (for banks) relative to the framework’s original objective of contributing to the sound revival of the EU securitisation market on a prudent basis. The purpose of this exercise is to gather sufficient evidence and data to help the Commission assess whether the current securitisation framework, including its prudential aspects, is functioning in an optimal manner and single out potential areas for improvement. The paper covers all the areas highlighted by Leaseurope in our response to their consultation on the review of the European securitisation regulatory framework. The report is expected to be finalised by 1 September 2022. In parallel, by 1 January 2022, the Commission shall report to the European Parliament and the Council on the application of the provisions in Chapter 5 of Title II of Part Three in light of developments in securitisation markets, including from a macroprudential and economic perspective. That report may be accompanied by a legislative proposal. We will keep you informed.
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REVIEW OF EU ECONOMIC GOVERNANCE
The European Commission has adopted a Communication that takes stock of the changed circumstances for economic governance in the aftermath of the COVID-19 crisis and relaunches the public debate on the review of the EU's economic governance framework. The Commission is therefore inviting stakeholders to engage in the debate and provide their views on how the economic governance framework has worked so far and on possible solutions to enhance its effectiveness. These stakeholders include other European institutions, national authorities, social partners and academia. The debate will take place through various fora, including dedicated meetings, workshops and an online survey which is open for submission until 31 December 2021.
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EU ENVIRONMENT MINISTERS DEBATE FIT FOR 55 PACKAGE
The Fit for 55 package aims to bring EU climate policies in line with the EU’s objective of reaching climate neutrality by 2050 and its target to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. On 6 October, EU environment ministers exchanged their views with EU Commissioner Timmermans on five climate-related initiatives: the EU Emission Trading Scheme (ETS), Effort Sharing Regulation (ESR), Regulation on Land use, land-use change and forestry (LULUCF), proposal on CO2 standards for cars and vans and the proposed new Social Climate Fund (SCF). They also debated the distribution of efforts between and within both Member States and different economic sectors involved, and on the impact of the proposals on citizens. The debate addressed in particular the extension of emissions trading to buildings and road transport (Portugal, Hungary, France, Cyprus, Poland and Malta were explicitly against this proposal).
Sweden and the Netherlands called for a more ambitious target than 55% by 2030 and stricter CO2 standards for cars and vans (Denmark and the Netherlands asked for the internal combustion engine to be banned already in 2030). On the other hand, Hungary, Romania, Slovenia, Malta and Bulgaria called for technology neutrality and underlined the average age of their car park is 15-year-old so most citizens would need to renew their cars. Many Member States were critical on the Social Funds (no added value compared to the Multiannual Financial Framework), including Sweden and Lithuania. Slovenia and Poland called for natural gas to be considered in the transition despite having been excluded in the current proposal. The debate on the Fit for 55 Package is foreseen to be long over the following months. Due to its cross-cutting nature, different configurations of the Council of the EU will be involved. You can read more background info here.
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FIRST EUROPEAN SUSTAINABLE INVESTMENT SUMMIT DISCUSSES TAXONOMY AND GREEN BONDSPresident von der Leyen recently gave a speech at the first EU Sustainable Investment Summit. She reminded attendees that with the EU taxonomy investors will know exactly whether an investment is truly green, or how it is contributing to a better planet. Based on this classification, the Commission has also proposed an EU green bond standard which labels investments with a clear positive environmental impact. It will be a quality trademark, not just for European markets, but for everyone who wants to join. And finally, the EU is setting new rules on transparency and disclosures for the corporate sector. On the European side, the EU has committed to mobilising at least €1 trillion in sustainable investment inside Europe by 2030, and on the international side, to joining forces with everyone who shares EU goals. You can read the full speech here.
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NEW RULES FOR TAXONOMY-RELATED PRODUCT DISCOSURESThe three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have delivered to the European Commission (EC) their draft Regulatory Technical Standards (RTS) regarding disclosures under the Sustainable Finance Disclosure Regulation (SFDR) as part of the Taxonomy regulations. The draft RTS aim to provide comparable information to end investors regarding the investments of financial products in environmentally sustainable economic activities, as well as establishing a single rulebook for sustainability disclosures under the SFDR and the Taxonomy Regulation. The Commission will incorporate all the SFDR technical standards in one instrument, including those submitted to the Commission in February 2021 as well as the ones covered in this report. You can read more here.
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EUROPEAN PARLIAMENT AND COUNCIL ADVANCE ON DIGITAL MARKETS ACT On 22 November, the European Parliament reached a provisional agreement on the Digital Markets Act (DMA) proposal. The quantitative thresholds for a company to fall under the scope of the DMA was increased to €8 billion in annual turnover in the European Economic Area (EEA) and a market capitalisation of €80 billion. To qualify as a gatekeeper, companies would also need to provide a core platform service in at least three EU countries and have at least 45 million monthly end users, as well as more than 10 000 business users (MEPs clarified in an annex how these indicators should be measured). These thresholds do not prevent the Commission itself from designating other companies as gatekeepers when they meet certain conditions. The Parliament proposed the creation of a “European High-Level Group of Digital Regulators” to facilitate cooperation and coordination between the Commission and member states in their enforcement decisions. If a gatekeeper does not comply with the rules, the Commission can impose fines of “not less than 4% and not exceeding 20%” of its total worldwide turnover in the preceding financial year. The role of national competition authorities is clarified while keeping the enforcement of the DMA in the hands of the Commission. The Digital Markets Act file is due to be voted on in plenary in December 2021. In the meantime, a general approach was reached in the Council on 26 November.
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PARLIAMENT AND COMMISSION DEBATE AI REPORT On 9 November, AIDA Rapporteur Axel Voss (EPP, Germany) presented his draft report on "Artificial Intelligence in a Digital Age" to AIDA Committee Members. The report deals with six case studies identified by the AIDA Committee. GDPR was a controversial topic of discussion among MEPs and a decision was needed whether to tackle this in the report. Mr. Gross, from the European Commission AI unit, welcomed the report and recognize the urgency, however he reminded the Committee that they should build on the European Commission proposal on the AI Act and a coordinated plan published in April (70 actions, starting from enabling conditions and strategic areas). It includes general measures but also specific areas (e.g. climate, environment, health, robotics, sustainable, mobility, sustainable agriculture), a risk-based approach and the indication to regulate where needed. The Parliament report makes a distinction between B2B and B2C, however the Commission looks at risk categories instead. According to Mr Gross, legislators need to be the ones deciding risk qualification (not the operators). Mr. Gross stressed the need for standards to be developed by CEN and CENELEC. Horizon Europe and the Recovery Plan should also show how we can use AI. Rapporteur Voss reminded the Committee that an ambitious approach is needed and that the report should have consequences (e.g., standard setting). National strategies create fragmentation while we have to focus on priorities and where EU investment is needed. Massive quality data is needed and anonymisation techniques are needed for personal data if the EU does not want to be left behind compared to other continents. The deadline for amendments is 6 December and the final report is expected to be approved in spring. You can access the full report here.
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PARLIAMENT AND COUNCIL REACH PROVISIONAL AGREEMENT ON USE OF HIRED LORRIESNegotiators from the Council and the European Parliament reached a provisional agreement on revised rules for the use of hired vehicles for goods transport. It will ease existing restrictions when hiring these vehicles from other EU countries, in order to allow transport operators, rental and leasing companies to meet short-term, seasonal or temporary demand peaks or to replace defective or damaged vehicles. Moreover, the agreement reached by Parliament and Council will contribute to the EU’s climate objectives, as hired vehicles tend to be newer, safer and less polluting than the fleet average. Under the agreement, member states will not be allowed to restrict the use on their territory of a vehicle hired by a haulage company established in another member state, provided that the relevant rules in the member state of establishment are followed. As the level of road transport tax varies considerably within the EU, member states will still be able to restrict, within certain limits, the use of vehicles hired in another member state by their own companies. These restrictions mainly concern the proportion of hired vehicles registered in another member state in the fleet of a haulage company, as well as the length of the lease period for a vehicle hired from abroad. The provisional agreement will now be submitted to the Council's Permanent Representatives Committee (Coreper) for endorsement. EU countries will have to incorporate the new provisions into their legislation 14 months after the entry into force of the directive. You can read more here and here.
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DATA PROTECTION AND PRIVACY CONFERENCEOn 2 December, ForumEurope is hosting a hybrid conference online and in Brussels which will focus on data protection in Europe, covering topics like consumer trust, improving GDPR, online platforms, artificial intelligence and data access for the public good. You can find more info and register here.
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FINANCE INDUSTRY EXPERT UNLEASHING ESG POTENTIAL On 8 December, the International Asset Finance Network (IAFN) will host an online interview with Jochen Jehmlich, CEO at Société Generale Equipment Finance, on how the asset finance industry can respond to the global climate crisis, driving a circular economy in asset finance, proactive steps for anticipating market changes and safeguarding investments, and how to optimise advances in technology to derive key insights from data. You can register here.
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ESG OUTLOOK CONFERENCE From 8-9 December, Fitch Ratings is hosting the second conference under their “Sustainable Fitch” banner, an in-person and virtual hybrid event, which will explore how ESG data is leveraged, including keynotes, workshops, case studies and sector specific breakout sessions. You can find out more and register here.
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