@techreport{Mack, type = {Working Paper}, author = {Mack, Sebastian}, title = {Get your priorities right - Europe must not underestimate the role of banks for the green transition}, pages = {13}, abstract = {EU policymakers and the financial sector have placed high hopes in forging a green capital markets union. However, the idea that capital markets could swiftly close the green investment gap ignores underlying financing structures. In Europe, the areas with the biggest funding needs rely on bank loans rather than financial markets and the recent banking turmoil is unlikely to change this. The reliance on banks will not abate any time soon as EU governments are dragging their heels on completing the capital markets union despite repeated promises. Since banks will largely finance the European green deal, the EU should step up its efforts to green the banking system and systematically make climate risks a core element of banking supervision, prudential regulation, and monetary policy.}, language = {en} } @techreport{MackFindeisen, type = {Working Paper}, author = {Mack, Sebastian and Findeisen, Francesco}, title = {Do more with more - How the EU can improve funding for the European Green Deal}, pages = {9}, abstract = {Funding remains the Achilles heel of the EU Green Deal. Europe needs to spend an additional €350 billion on climate action every year until the end of this decade. The bulk of sustainable investment is expected to come from the private sector and the InvestEU programme has been established to leverage private investment through the European Investment Bank (EIB) Group and other public financial institutions. However, overly ambitious target volumes backed by only limited public financial support, and the resultant high levels of leverage, prevent InvestEU from delivering its full potential for achieving the green transition. To plug the green investment gap, InvestEU needs to reduce its leverage, increase its transparency on intermediated operations and be complemented by fresh public spending at EU level to finance transformative investments that fall outside the scope of what public de-risking of private investments can achieve.}, language = {en} } @techreport{Mack, type = {Working Paper}, author = {Mack, Sebastian}, title = {Show greenwashing the red card. How Europe can make sustainable finance work}, pages = {16}, abstract = {What Europe needs is not a regulatory pause, but better legislation. In record time, the EU has rolled out a comprehensive disclosure regime for sustainable finance. But the nascent regulatory framework is challenging to implement, remains vulnerable to abuse by those seeking to game the system and fails to provide meaningful guidance to investors. Despite detailed legislation, financial market participants differ significantly in their expectations of sustainable investment products and face the risk of greenwashing, where issuers - intentionally or unintentionally - make misleading sustainability claims. To enable private investment to finance Europe's transition to net zero, this policy brief proposes short-term measures to combat greenwashing plus reforms that should be adopted once the next European Commission has assumed office. For the EU to uphold its status as a global benchmark for sustainable finance, lawmakers and regulators must urgently improve the rules in place and ensure that they are applied consistently across member states.}, language = {en} } @techreport{LindnerMack, type = {Working Paper}, author = {Lindner, Johannes and Mack, Sebastian}, title = {Europe must improve the quality of its regulation}, pages = {3}, abstract = {The EU is discussing better regulation. The issue is urgent. Nothing less than the competitiveness of European companies and the acceptance of the EU are at stake. But beware - neither symbolic politics nor broad deregulation will help. Instead: here are four concrete measures that could substantially improve the quality of EU regulation.}, language = {en} } @techreport{Mack, type = {Working Paper}, author = {Mack, Sebastian}, title = {Get your act together - The EU must push ahead with banking union to boost confidence in its banking system}, abstract = {EU banks have so far weathered the storm caused by the pandemic, the war in Ukraine and sharp interest rate hikes. However, the failure of Credit Suisse and three US tech banks underlines how quickly investor and creditor trust can erode, prompting regulators to intervene and governments to provide public support. While swift and decisive action in the US and Switzerland prevented a systemic bank crisis, the EU will struggle to preserve financial stability if things go badly wrong. To boost confidence in its banking system, it is therefore high time for the EU to push ahead with banking union. To get its act together, the EU should 1) improve banks' resilience by adopting strict prudential regulation instead of creating new vulnerabilities, 2) make the crisis management framework more credible to ensure that banks can fail without using taxpayers' money, and 3) put in place European backstops to bank resolution and deposit insurance to withstand a systemic crisis.}, language = {en} }