WEDNESDAY, 28/02/2024 - Scope SE & Co. KGaA

The Wide Angle: banks need to prepare more and worry less about a digital euro

The likely establishment of a digital euro (dEUR) has triggered some anxiety at European banks around the stability of their deposits, high implementation costs, and curtailment of innovation capacity and competitiveness.

Banks have been warning policymakers that they might be less able to lend if deposit flight means funding becomes more difficult. The ECB has gone some way to alleviating banks' concerns.

In his latest The Wide Angle report, Sam Theodore argues that fears of material deposit flight toward a dEUR are unwarranted. He believes the project in its current shape should be reassuring for banks regarding funding stability.

Banks should be focusing instead more on profitability and business model-related challenges because an ECB/Eurosystem-run dEUR infrastructure will add to the payments-disintermediation hurdles they are already facing, brought about by digitalisation and new regulations.

Read the latest The Wide Angle.

Webinar

And join us for a webinar at 3.30 pm CET on Tuesday March 12^th when Sam Theodore will outline his thoughts about the impact of dEUR developments on European banks and answer your questions.

Register here