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The number of monetary financial institutions in the euro area and in the EU decreased further in 2011

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On 1 January 2012 the total number of monetary financial institutions (MFIs) [1] in the euro area stood at 7,533. This is a net decrease of 332 units (4%) in comparison with the situation a year ago. With a few minor exceptions, the decline was spread across the whole of the euro area. There were 9,587 MFIs in the European Union (EU) as a whole, a net decrease of 334 units.
Number of MFIs

  • On 1 January 2012 there were 7,533 MFIs resident in the euro area, compared with 7,865 on 1 January 2011. In relative terms, the decrease was particularly pronounced in Ireland (-15%), Luxembourg (-8%), Cyprus (-6%), France (-5%) and Greece (-5%). In absolute terms, Ireland (-106), France (-59), Luxembourg (-48) and Germany (-43) were the main contributors to the net decrease of 332 units in the euro area.
  • 2011 saw a substantial decrease in the number of money market funds, as an MFI sub-sector, owing in part to their new definition, under Guideline ECB/2011/13, which is more closely in line with that used for supervisory purposes. The contraction in this sub-sector was most prominent in Ireland (-97), Luxembourg (-46) and France (-29).
  • Despite the enlargement of the euro area through the accession of Greece (2001), Slovenia (2007), Cyprus and Malta (both 2008), Slovakia (2009) and Estonia (2011), the number of MFIs in the euro area has decreased by 24% or 2,323 institutions since 1 January 1999. On 1 January 2012 Germany and France accounted for 41% of all euro area MFIs, a share slightly greater than that recorded on 1 January 2011.
  • On 1 January 2012 there were 9,587 MFIs resident in the EU, a net decrease of 334 units (-3%) since 1 January 2011. Compared with the situation on 1 January 1999 (10,909 MFIs in the EU), there has been a net decrease of 1,322 units (-12%), despite the addition of 1,608 MFIs on 1 May 2004, when ten new Member States acceded, and of a further 72 MFIs on 1 January 2007, when Bulgaria and Romania joined the EU.

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Note: The reduction in the number of MFIs during 2011 largely resulted from the introduction of a common definition for European money market funds (Guideline ECB/2011/13), which led to the reclassification of certain funds formerly recognised as money market funds.
Structure of the MFI population

  • The vast majority of euro area MFIs are credit institutions (i.e. commercial banks, savings banks, post office banks, credit unions, etc.), which accounted for 82.4% of MFIs (6,210 units) on 1 January 2012, while money market funds represented 16.9% (1,275 units). Central banks (18 units including the ECB) and other institutions (30 units) together accounted for only 0.4% of the total number of euro area MFIs.
  • In the EU as a whole, credit institutions accounted for 84% of MFIs on 1 January 2012, while money market funds represented 15% (see Chart 2 below).

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Country breakdown on 1 January 2012

  • In the euro area, Germany and France accounted for 41.2% of all MFIs. Italy, Austria, Ireland and Luxembourg accounted for a further 36%. Over the past 13 years (1999-2012) noteworthy developments in national MFI sectors included a significant increase of 494 units in Ireland over the period as a whole. [2] At the same time there were relatively large falls of 55%, 41% and 40% respectively in the number of monetary financial institutions in the Netherlands, France and Germany and lesser declines of 32%, 30%, 22% and 20% in Spain, Portugal, Greece and Belgium (see Table 1 below).
  • Among the non-euro area EU Member States, Poland had the largest number of MFIs (703), representing 7% of the MFI sector in the EU, or 34% of MFIs in the non-euro area EU Member States. The United Kingdom (20%), Hungary (12%), Sweden (10%) and Denmark (8%) follow as main contributors to the number of MFIs in the non-euro area EU Member States. Between the beginning of 1999 and 1 January 2012, there was a considerable reduction in the number of MFIs in the United Kingdom and Denmark, by 27% and 24% respectively.

Foreign branches

  • On 1 January 2012 638 branches of non-domestic credit institutions were resident in the euro area. These branches accounted for 10% of all euro area credit institutions. 109 of these branches (17%) were located in Germany. Estonia, Belgium, Slovakia and Greece had the largest proportion of foreign branches in relation to the total number of credit institutions, at 59%, 56%, 55% and 41% respectively. The head offices of the majority of the foreign branches in euro area countries were located either in another euro area country (64%) or in the United Kingdom (15%).
  • On 1 January 2012 there were 260 branches of foreign credit institutions resident in non-euro area EU Member States. Of these, by far the largest proportion (51%) was located in the United Kingdom. The head offices of the majority of the foreign branches in non-euro area EU Member States were located either in euro area countries (53%) or in other EU Member States (19%).

 

Table 1 – Number of MFIs, by country, and percentage changes in recent periods

Country

Number
of MFIs

Percentage
changes

1 Jan. 1999

1 Jan. 2001

1 May 2004

1 Jan. 2010

1 Jan. 2011

1 Jan. 2012

1 Jan. 1999 to 1 Jan. 2012

1 May 2004 to 1 Jan. 2012

1 Jan.
2011 to 1 Jan.
2012

ECB

1

1

1

1

1

1

EIB*

1

1

1

BE

153

142

126

121

123

122

-20.3

-3.2

0.8

DE

3,280

2,782

2,268

2,018

1,999

1,956

-40.4

-13.8

-2.2

EE

25

38

37

37

48.0

GR

102

105

100

89

83

79

-22.5

-21.0

-4.8

IE

96

211

294

727

696

590

514.6

100.7

-15.2

ES

608

571

512

427

413

415

-31.7

-18.9

0.5

FR

1,938

1,764

1,577

1,298

1,206

1,147

-40.8

-27.3

-4.9

IT

944

884

854

833

808

785

-16.8

-8.1

-2.8

CY

409

156

153

143

-65.0

-6.5

LU

676

662

586

630

602

554

-18.0

-5.5

-8.0

MT

17

29

32

33

94.1

3.1

NL

668

620

484

305

300

297

-55.5

-38.6

-1.0

AT

910

866

827

821

806

783

-14.0

-5.3

-2.9

PT

228

223

205

169

164

159

-30.3

-22.4

-3.0

SI

27

28

28

29

7.4

3.6

SK

28

40

43

44

57.1

2.3

FI

354

362

396

383

370

358

1.1

-9.6

-3.2

Euro area**

9,856

9,193

8,230

8,076

7,865

7,533

-23.6

-8.5

-4.2

BG

36

36

37

2.8

CZ

79

68

67

67

-15.2

DK

216

213

206

167

164

164

-24.1

-20.4

LV

52

74

76

72

38.5

-5.3

LT

74

88

90

95

28.4

5.6

HU

238

246

246

251

5.5

2.0

PL

659

714

710

703

6.7

-1.0

RO

51

55

55

SE

179

177

255

212

205

205

14.5

-19.6

UK

556

541

457

422

407

405

-27.2

-11.4

-0.5

EU**

10,909

10,124

10,756

10,192

9,921

9,587

-12.1

-10.9

-3.4

* For the purposes of the ECB’s monetary and other euro area statistics, the European Investment Bank (EIB) continues to be treated as an institution that is resident outside the euro area.

** Changing composition

Notes:
The number of MFIs has been derived from the ECB’s “List of monetary financial institutions”, which is updated daily on the ECB’s website and is compiled in such a way as to ensure its completeness, accuracy and homogeneity across countries. Its objectives are twofold, namely (i) to serve as the reference reporting population for the compilation of comprehensive and consistent monetary statistics for the euro area and (ii) to serve as a register and a reliable sampling frame for other data collections and for statistical and economic analyses.
Information on MFIs and other financial institutions, including the list of monetary financial institutions and institutions subject to minimum reserves, can be found on the ECB’s website.

________________________________________
[1]“Monetary financial institutions” (MFIs) are central banks, resident credit institutions as defined in Community law, and other resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than MFIs and, for their own account (at least in economic terms), to grant credits and/or make investments in securities. Money market funds are also classified as MFIs.
[2]The overall increase includes 419 units which resulted from the reclassification of Irish credit unions as credit institutions as of 1 January 2009.

Copyright © for the entire content of this webpage: European Central Bank, Frankfurt am Main, Germany.
 

Finance

KBC Bank chooses Finastra for LIBOR transition

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KBC Bank chooses Finastra for LIBOR transition 1

Fusion Loan IQ Alternative Reference Rate module and Fusion LIBOR Transition Calculator will help the bank move away from LIBOR

KBC Bank, a Belgium-based bank with operations across Europe, US and Asia Pacific, has chosen Finastra to help manage its transition through the upcoming interbank references rates changes. It has selected Fusion Loan IQ Alternate Reference Rates (ARR) module to manage new rates and to expand its lending business. The bank has also opted for the Fusion LIBOR Transition Calculator to help calculate rates ahead of the transition period.

Melinda Christens, Business Program Manager LIBOR Transition at KBC Bank said, “We’ve been using Fusion Loan IQ for a number of years, and have been impressed with the way the solution is able to continuously adapt over time, adding new functionalities in line with changing regulations. The transition away from LIBOR is daunting for most banks, but with the help of Finastra’s solutions we’re able to continue to calculate rates and embark on a smooth transition.”

Fusion Loan IQ is Finastra’s solution for commercial lending, powering 71% of all syndicated loans around the world. It alleviates the high costs of system and process redundancy within commercial lending operations, as well as increasing transparency, improving risk management and simplifying entry into new markets or business lines. The latest version of the solution, enhanced to support ARR, provides banks with core capabilities to issue new loans using the replacement rates, allowing them to begin to transition their existing LIBOR portfolio safely.

Fusion LIBOR Transition Calculator will help KBC Bank manage the transition before the ARR module is rolled out. It enables market participants to calculate their own ARR or Risk-Free Rates (RFR) and interest accruals. The calculator service independently accesses the ARR/RFR from external official sources, such as the Federal Reserve Bank of New York, for the secured overnight financing rate (SOFR). It then calculates compounded in arrears rates and daily non-cumulative compounded rates, along with corresponding interest accrual amounts for a set of inputs. Depending upon the rate method chosen, the calculator has the flexibility to calculate the daily compounding rates for the whole period or only for the end date. It follows Finastra’s Fusion Loan IQ ARR calculations, which gives market participants consistent and accurate results.

Built on FusionFabric.cloud, Finastra’s open innovation platform, the calculator’s open API facilitates the integration with systems that don’t yet have a solution in place for calculating ARR/RFR rates. This significantly reduces operational risk.

“The shift away from LIBOR is the biggest change the market has seen in lending over the last three decades. It is also a once-in-a-lifetime opportunity to innovate and serve customers better, and so the need for a flexible service that can expand over time is a must,” said Robert Downs, Global Head of Corporate and Syndicated Lending at Finastra. “Our Fusion Loan IQ ARR module and the transition calculator are designed to keep pace as ARR methodologies and conventions evolve, protecting our customers from risks associated with complex system changes and ultimately future-proofing their businesses.”

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Finance

How contactless payments helped a pizzeria survive 

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How contactless payments helped a pizzeria survive  2

By Kaushalya Somasundaram, Head of Payments Partnerships & Industry Relations at Square, UK

The Covid-19 pandemic has caused continued uncertainty for the hospitality industry. Many have been forced to pause operations or adjust the operations so they can keep trading.

Businesses are continuing to address social distancing rules by rapidly accelerating their digital capabilities. From bakeries to pubs, we have witnessed businesses shift to selling online, offering click and collect services to making their goods available for delivery.

But one of the most integral ways technology is aiding these businesses is on the payment front.

Contactless payments and cashless businesses have been around for years, gaining popularity for the ease and convenience it offers businesses and customers alike. However a new significance has been  placed on all technologies that reduce physical contact and time needed to complete a transaction.

It’s no surprise the number of cashless businesses in the food and drink sector is skyrocketing, from 8% in January 2020 pre-lockdown, to 33% in July 2020.

Contactless payment technology has played a vital role in the survival of many businesses, including a pop-up pizza business based in Cambourne, Cambridgeshire.

From hobby to hub

When Sam Corban first tried his hand at pizza-making, it was out of interest. But after moving to Cambourne, he decided to turn what had quickly become a hobby into a business.

Sam approached local council offices to seek support in getting his idea for an artisan pizza pop-up business off the ground. And in February 2017, 400° Pizzeria fired up its oven for the first time, trading every Friday night at the Cambourne Cricket Pavilion.

Prior to the pandemic, Sam’s trademark 24-hour slow proof dough – which had taken him almost nine months to perfect – had garnered him a fond reputation around the village. It wasn’t long before his popularity meant he could hire his first staff member.

However, fostering a close relationship with his local community has been equally essential to Sam’s success. He has several pizzas named after customers – from the classic Nduja to The Debbie – and often asks his regulars for feedback regarding new recipes.

The success of his pop-up has influenced other local artisan street food providers, who’ve since joined him at the Pavilion on Fridays which has helped create a local hub for Cambourne locals.

Once the pandemic hit and a new normal descended on the world, Sam knew he had to react quickly and intelligently if he was going to continue doing business and be a positive force in his community.

And that all started with how he took payments.

The unexpected virtues of contactless

Despite accepting cash, Sam has always encouraged his customers to pay with card whenever possible, even pre-pandemic. It’s simply a quicker way to complete a transaction, especially now most bank cards have contactless chips.

After trying out a few contactless terminals, Sam decided to use the Square Terminal, an all-in-one card machine for everything from managing items and taking payments to printing receipts and getting paid. Once the pandemic started it was a no brainer to become completely cashless. “As all my payments are processed seamlessly through the Square Terminal, I’m cash free,” explains Sam. “This means I can process orders faster and don’t have to deal with hygiene issues posed by taking cash.” 

And, the peace of mind this offers customers can’t be overstated. It means they can get a slice of community and normalcy (along with pizza) in a time where they’re cooped up at home and need to keep contact to a minimum.

As a result, Sam was able to keep operating safely and successfully throughout 2020.

A future-proofed pizzeria

Sam’s success is closely linked to how he connects and engages with his local community. As well as his weekly pizza pop up, he’s also started stocking his van with dry goods such as flour and pasta to deliver goods to those who can’t leave the house. He has even started offering home pizza making kits – giving local families a fun way to jump on the lockdown home baking trend.

These acts, plus the digital transformation he’s undergone over the course of the year, will resonate positively for the pizzeria long after this pandemic is past. Not only has he cemented his place in his local community, but the technology he’s adopted has helped him flex his operations.

As Sam shows us all, with a sprinkle of technology and a healthy serving of community spirit, every crisis can also be an opportunity to grow and evolve.

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Business

Ahead of expected IPO, Deliveroo recruits Next’s Wolfson to board

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Ahead of expected IPO, Deliveroo recruits Next's Wolfson to board 3

LONDON (Reuters) – Britain’s Deliveroo said on Tuesday it has beefed up its board ahead of an expected initial public offering this year with the appointment of Simon Wolfson, the veteran boss of clothing retailer Next, as a non-executive director.

The food delivery company said on Sunday it had raised a further $180 million from existing investors, including minority shareholder Amazon, in a move that values the business at more than $7 billion.

Deliveroo is set to hold an IPO in the coming months, in what would be the biggest new share issue in London for three years.

Wolfson’s appointment comes after Deliveroo named Claudia Arney as the company’s first chair in November.

Deliveroo founder and CEO Will Shu said Wolfson would bring “great knowledge and insight” to the board.

Wolfson has been Next’s CEO since 2001.

He is also a peer of Britain’s ruling Conservative Party, sitting in the upper house of parliament.

(Reporting by James Davey and Paul Sandle; editing by Sarah Young and Pravin Char)

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