Writing for City AM, Natixis’ Chief Economist, Patrick Artus, explains why Frexit could cause the European Union to unravel

Ahead of the French presidential election in April, there is growing speculation around whether Marine Le Pen’s Front National could lead the country in the UK’s footsteps towards an exit from the European Union.

Writing for City A.M., Patrick Artus, Natixis’ Chief Economist, gives his views on why a French exit, or “Frexit” would be far more devastating than Brexit – and his argument, albeit straightforward, is that France is a member of the eurozone, while the UK is not.

Indeed, Artus argues that the single currency is the thrust of the European project, which is why its disintegration poses an existential threat to the union as we know it. So, while Britain will be largely the same country pre and post-Brexit, any eurozone country falling out of the bloc will face a far more serious fate.

The article was printed in City A.M.’s Forum section. To read the article online, please click here.

Deutsche Bank publishes new guide to EU Payment Services Directive 2

Banks and payment providers will need to adapt their systems and processes to comply with the requirements of the new EU Directive on Payment Services (PSD2), according to a new guide published by Deutsche Bank, in collaboration with PPI AG, that explains the directive’s most important provisions, as well as its impact on the operations of payment service providers and corporates. 

Applicable from 13 January 2018, PSD2 is a major update of the EU’s first Directive on Payment Services, published in 2007, which laid the legal foundation for the creation of an EU-wide single market for payments. PSD2 aims to bring EU regulation up-to-speed both with the step-change in technological development and the shake-up of the payments market that have occurred since the first directive came into force.

It extends the existing directive’s scope to cover transactions in all currencies where both the payer’s and payee’s payment service providers (PSP) are located in the EU/EEA (two-leg-in), as well as to transactions where only one PSP is located in the EU/EEA (one-leg-out).

It introduces stricter safety requirements for accessing payment account information and for the initiation of payment transactions via online channels, mandating 2-factor authentication; and it extends market access to   ̶   and control over   ̶   third party providers of payment initiation and account information services.

“We welcome PSD2 as a further step in the development of the European payments market that will facilitate a completely new “innovation ecosystem” in payments in Europe” says Shahrokh Moinian, contributor to the new guide, Global Head of Cash Management Corporates, and Programme Lead of the PSD2 Implementation Project at Deutsche Bank. “It widens the scope of the existing directive by covering new services and players, as well as by extending it geographically and by currency. PSD2 will strengthen consumer rights and security as well as encouraging competition in the payments space”.

Following Moorgate outreach, news of the guide’s publication was picked up in Asset Finance International, AssetMan.net , Global Custody, Institutional Asset Manager, Transaction Banker, TXF. 

You can access the guide “Payment Services Directive 2: Directive on Payment Services in the Internal Market (EU) 2015/2366” here.

 

Deutsche Bank’s Andrew Reid in The Paypers: B2B payment innovation is possible only through collaboration

Andrew Reid explains in The Paypers that collaboration is needed for banks to achieve the same level of transformation and convenience in the B2B space that they have already delivered in the retail banking space.

In an interview previously published in the B2B Fintech: Payments, Supply Chain Finance & E-invoicing Guide 2016, Reid says that banks and corporates need to invest in real-time payments. These will benefit corporates who wish to execute time-sensitive transactions – such as High-Value, critical vendor or M&A-related payments – while receiving close-to-immediate proof of execution.

“For large banks, involvement in establishing such future payment/collection platforms is a “revenue loss avoidance” tactic rather than a “profit creation” one, as they will otherwise lose market share to disruptors,” says Reid. This is why Deutsche Bank and others are helping to develop a Pan-European Instant Payment Solution.

Reid goes on to talk about the benefits   ̶  but also the challenges  ̶  of implementing pay-on-behalf-of/collect-on-behalf-of (POBO/COBO) structures. These can help corporates consolidate cash flows and rationalise account structures, as well as increase their purchasing power when negotiating cash management terms with banks.

You can read the full interview here.

 

 

Natixis’ Patrick Artus discusses whether European institutions can rescue the Italian economy in FTSE Global Markets  

 

patrickartusFollowing the Italian electorate’s resounding rejection of a constitutional reform package in December 2016’s referendum, further uncertainty beckons for the country’s fragile economy. This begs the question: can Italy’s sluggish growth be lifted by European financial institutions, including the European Central Bank?

In an article for FTSE Global Markets, Natixis’ chief economist, Patrick Artus discusses how the nature of Italy’s troubles, characterised by declining competitiveness and productivity, renders any assistance from European institutions largely redundant.

With this in mind, Artus argues the perpetual focus on the country’s banking crisis is detracting attention from addressing the country’s poorly-performing labour market – an economic challenge that can only be resolved from within. As such, Artus believes that, “As long as this neglect continues, Italy could remain the sick man of Europe.”

To read the full article, please click here.

Natixis’ Patrick Artus argues that a Frexit would cause the European Union’s collapse in Bloomberg Briefs

images (1)Following increasing political risk in 2016, characterised by both rising populist and anti-globalisation movements and, above all, the UK’s Brexit referendum, European speculators’ attention is now shifting towards the French presidential elections in 2017.

Writing for Bloomberg Briefs, Patrick Artus, chief economist, Natixis, argues that if the French public endorses a vote for Marine Le Pen’s Front National, a French exit, or “Frexit,” could spell the beginning of the end for the European Union.

Artus says, “In our view, endorsing a Frexit would represent a grave miscalculation of its consequences compared with a Brexit. Should Le Pen emerge victorious next spring and begin to set a Frexit in motion, investors must be wary of a potential end to Europe’s political and economic framework as we currently know it.”

To read the full article, please click here.

Bobsguide and GTNews’ annual Treasury Management Systems Guide features interview with Deutsche Bank’s Lisa Rossi

Lisa RossiThe 2016/2017 Treasury Management Systems Guide, a joint production by Bobsguide and GTNews, has been published. This year’s guide features a full interview with Lisa Rossi, Global Head of Liquidity and Investment
Products for Global Transaction Banking, Deutsche Bank, discussing corporate strategies for managing liquidity in the new regulatory environment.

Rossi explains that “There has been a change in how banks look at liquidity products. With the regulatory changes that were introduced as a result of the financial crisis, regulators want to see banks increase the size of their stable funding. This requires banks to create different products to support stress-compliant
funding options for clients, and requires CFOs and Treasurers to look at deposits differently as they manage their own cash positions.”

Rossi goes on to discuss the potential problems around holding excess cash in a new, polarised, landscape, and how corporates can both optimise their liquidity positions and protect such excess cash with a ‘portfolio’ management approach. Rossi also explains why corporates must be sensitive to the banks’ regulatory painpoints.

I am sitting down with treasurers and explaining to them what the regulations are and how they have affected banks – and how that directly and indirectly affects products and the way we do business with our corporate treasurers. Having this dialogue is really important because I believe, as a corporate treasurer, you’re going to get frustrated if you expect the same thing you’ve had historically, but you’re not getting that anymore.

The full guide can be downloaded here.

Natixis’ Patrick Artus analyses Brexit’s domestic and global effects for Institutional Investor

images (1)Immediately after British voters endorsed an exit from the EU on 23rd June, investors cleared $2.1 trillion from the S&P Global Broad Market Index (BMI) in just 24 hours. Now that the dust has mostly settled for post-Brexit volatility, Patrick Artus, chief economist for Natixis, has analysed the hysterical market reaction for Institutional Investor’s Unconventional Wisdom column.

For Artus, this global reaction was gratuitous as he believes Brexit will remain a British crisis. Indeed, any investment flows diverted from the UK will benefit other economies – particularly the eurozone – with minimal repercussions for global trade.

Meanwhile, fears that Brexit could trigger a domino effect similar to 2008’s sub-prime market crash negate the markedly different economic conditions that the Bank of England can exploit in 2016 in order to prevent another financial crisis. In this respect, Artus believes Brexit does not have the venom to paralyse the global economy – meaning any international investors wary of the Brexit’s implications for their non-UK assets ought to adopt a “business as usual” attitude.

To read the full article, please click here.

 

Natixis’ Patrick Artus writes for FTSE Global Markets on the UK’s post-Brexit economic potential

PatrickArtus Patrick Artus, chief economist, Natixis, has given his verdict on the UK economy’s outlook following the historic vote to leave the EU.

Writing for FTSE Global Markets, Artus notes that market uncertainty around the UK’s future trade relationships will fuel a major downgrading of the economy and the decline of foreign direct investment (FDI) – with UK GDP growth failing from 2.0% to 0.4%.

While discussing the UK’s ability to mitigate this Brexit-induced slump, Artus dismisses the UK’s potential counterstrategies including a deregulation of UK’s financial sector and replacing EU trade with global trade flows. These stimuli – widely cited by Brexiteers as the economy’s most powerful weapons – contradict two important factors: the UK’s domestic appetite for stringent regulatory control of financial markets; and the rapid decline of global trade flows.

For Artus, therefore, it remains unclear how the UK will mitigate the economic effects of a Brexit.

To read the full article, please click here.

Patrick Artus argues the UK’s Brexit loss may be the eurozone’s gain in Bloomberg Briefs

images (1)The UK finds itself at the epicentre of a unique economic and political experiment following its decision to withdraw from the EU. Yet, Patrick Artus, Natixis’ chief economist, believes the reaction to Brexit has been wildly over-exaggerated.

Writing for Bloomberg’s daily newsletter, Artus argues that the UK’s losses following a Brexit – notably forecasted falling UK investment and growth – will be the eurozone’s gain as investors flock to the nearest attractive destinations to secure good returns.

Artus says, “Though Brexit will cause a severe economic downgrading for the UK’s domestic performance, its impact to Europe’s economic health is minimal. So, it seems Brexit jitters may have been caused for political reasons instead.” With this in mind, he calls for investors outside London to remain calm.

To read the full article, please click here.

Patrick Artus writes for FTSE Global Markets on the ECB’s efforts to reactivate the sluggish eurozone economy

patrickartusSince 2014, the eurozone has received two opportunities for economic growth: the quantitative easing (QE) programme and plummeting oil prices. But, has the European Central Bank (ECB) capitalised upon these gifts to advance the eurozone economy? Patrick Artus, Natixis’ chief economist, believes the ECB’s success has been partial.

Writing for FTSE Markets, Artus explains that – when such stimuli subside – the eurozone’s structural reform has been too ineffectual in order to achieve economic resilience. For instance, continually poor productivity gains and high debt burdens threaten to exacerbate once oil prices normalise or the ECB abandons its QE programme.

That said, Artus believes the eurozone labour market’s long-term restructuring – an opportunity afforded to eurozone governments due to the ECB’s support – has bolstered total eurozone employment. Whether this consolation is enough to resuscitate the eurozone, however, is yet to be seen.

To read the full article, please click here.