Paris EUROPLACE held its 16th annual International Financial Forum with its theme "Fostering Economic Growth in Europe" in partnership with Banque de France on Monday, April 20, at the French Institute Alliance Française (FIAF). The event was hosted by Mr. Arnaud de BRESSON, Chief Executive Officer, Paris EUROPLACE.
Governor Christian NOYER, Banque de France, spoke of the active role of Central Banks worldwide to bolster financial stability: "Since 2007, the aggregate size of central banks' balance sheets over the world has tripled, reaching the amount of US$22 trillion at the end of 2014" mentioning "In advanced countries, Central Banks have acquired domestic assets. On average, their balance sheets have grown from 10% to 20% of GDP over the last seven years." He stated, "The Eurosystem has now embarked into a major purchase program, the PSPP [Public Sector Purchase Program], that follows other programs of smaller sizes for asset-backed securities (ABSPP) and covered bonds (CBPP3)."
Governor NOYER addressed three concerns in European macrofinance: fears of inflation brought on by in-flow of money, the independence of Central Banks from governments, and technical insolvency of Central Banks - all of which safeguards are in place. "It is very important to understand that the Eurosystem is fully protected against such a contingency," he said. "It has been created with a solid capital base and has kept strengthening it through retained profits and occasional recapitalizations. The Eurosystem is unique, in this regard, amongst advanced economies."
Margrethe VESTAGER, the European Commission for Competition, spoke of convergence of policy and markets across Europe - and cited the Banking Union in Europe as a prime example of success: "The national governments and our common EU institutions have set forth a process of reforms that would have been unthinkable only a few years ago," she said. "We now have a new framework for Europe's financial markets that will make them sounder, safer, and more transparent. The new regulation introduced for banks - a single rulebook that applies to all EU countries - has laid the foundation of a genuine Banking Union."
To enable more growth and employment, Commissioner VESTAGER said such efforts should be repeated in European sectors such areas as energy and the digital economy. On the latter she stated: "In May, I will propose to the Commission the launch of a thorough analysis of e-commerce, where we have indications that companies erect artificial barriers to competition. Our analysis will help us understand where these barriers are and what they are like." She added "Making online markets more open, level and competitive will take us closer to reaching the goals of the Digital Single Market."
In opening remarks, Mr. Arnaud de BRESSON, Chief Executive Officer, Paris EUROPLACE, stressed the accumulative positive trends for investors both in France and Europe. "First, the European Central Bank's QE program provides major support for European economic growth. A month ago today, the ECB officially started buying government bonds following its decision in January to expand the asset purchase program to €60bn per month until at least September 2016… Second, the Investment Plan for Europe, presented in late 2014, is likely to be operational around September. The objective is to ‘mobilize' at least €315bn over the next three years into investment projects… Third, the implementation of the Capital Market Union: the EU Commission published a green paper on ways to leverage EU capital market competitive drivers to improve means for capital to finance corporates, including SMEs, in line with financial disintermediation."
Mr. de BRESSON also identified strong investment opportunities in France markets. The CAC 40 has posted more than 20% growth since the start of 2015, with 50 initial public offerings last year on the Euronext exchange, and Paris is the largest issuer of corporate bonds (35% market share) with a 20%-share of the booming high-yield market. "Nearly US$37 billion has flowed into European equity funds during the first quarter of 2015, surpassing the previous record of $32 billon during the same period of 2014. Investors are betting on Europe," he said.
Addressing the issue of climate finance ahead of this December's COP21 Conference in Paris, were Ambassador François DELATTRE, Permanent Representative of France to the United Nations, and Brice LALONDE, special advisor to the U.N. Global Compact. Paris is a leading financial center for socially responsible investing and environmental finance. "COP21 will be a major milestone as we seek to achieve two key goals," Ambassador DELATTRE said. "First, to contain global warming to 2 degrees Celsius, and second, to help societies adapt to impacts already being felt." He outlined four objectives toward achieving these aims at the Paris COP21 Conference: universal, binding agreements that treat all players equally, "a level playing field"; nations declaring their commitments to carbon reductions, many of which have been already announced; financial markets enabling carbon and climate finance, and a better ability to assess risk; and a "solutions agenda" incorporating citizens, business and civil society - all engaged to shift perceptions that global warming is not simply a cost to business, but an imperative for all, and one where there are many opportunities. "Public finance is critically important but will never match the huge systemic change in business markets," he said. "Weneed to change the incentives - carbon prici ng, carbon taxation, carbon markets - these will provide the right kind of long-term incentives needed for a low-carbon path."
Brice LALONDE of the U.N. Global Compact, who is helping to set the agenda for the COP21 event, pointed to momentum already underway away from carbon, particularly in the private sector where he sees effectiveness and efficiencies. "Everybody must be on board, both developing and developed. The meeting in Paris will be a signal - a start of real action. Will there be legal, binding agreements, or potentially non-binding agreements that are even more ambitious?" He pointed to hundreds of coalitions already underway to effect carbon reductions - some public, some private - and efforts are underway to measure their effects so that comparisons are possible, and a transparent, predictable price on carbon can be set. "We must have the mainstream economy working against climate change. And it must move efficiently."
In addition, a showcase of "disruptive" France-based financial technology, digital and high-tech companies were featured.
Selected presentations as well as the final agenda are available on paris-europlace.com
Comprendre l'économie durable pour s'y investir