Bank of France governor François Villeroy de Galhau has criticised the push for financial deregulation in the US, calling it “dangerous”, while urging Europe to focus on simplifying the application of its rules rather than weakening oversight.
“The current wave of US deregulation is dangerous,” Villeroy said in an interview with French magazine Alternatives Économiques on Friday. “The Trump administration seems to now contest the very objective of financial stability and climate transition.”
Villeroy de Galhau warned that reducing oversight is especially risky if it leads to neglecting the crypto sector and non-bank financial firms.
However, the French central banker repeated his call for Europe to simplify some financial rules, saying they are often too complex and ineffective.
“European simplification keeps the objectives of financial stability and the climate transition; it does not aim to decrease demands but to decrease the complexity,” he said.
BBVA raises sustainable lending target to €700bn
BBVA announced on Monday that it has increased its sustainable lending target to €700bn over the next five years, up from a previous goal of €300bn set for the period of 2018 to 2025.
“Business opportunity in the second part of the decade will be driven by solid investment in infrastructure and by the maturity of certain new clean technologies, which will make them profitable,” said Javier Rodriguez Soler, BBVA’s global head of sustainability and corporate and investment banking.
Rising public and regulatory pressure to tackle climate change has prompted governments and corporations to commit to reducing emissions. Banks have similarly pledged to increase financing for clean energy while scaling back support for high-carbon industries.
However, environmental campaigners warn that shifting political dynamics, particularly under newly elected US President Donald Trump, could influence many financial institutions to pare back their sustainability commitments.
The Financial Times reported on Monday that major banks, including HSBC, Standard Chartered and Wells Fargo, have scaled back top sustainability roles and teams due to slow progress on climate action and pushback from Republican politicians in the US.
Last week, HSBC delayed its net zero emissions target across its operations by 20 years to 2050, citing the slowing pace of economic transition.
ECB’s Wunsch warns against ‘sleepwalking’ into excessive rate cuts
European Central Bank policymaker Pierre Wunsch has warned that the eurozone risks “sleepwalking” into excessive interest rate cuts and needs to be prepared to stop lowering borrowing costs soon.
“I’m not pleading for a pause in April but we must not sleepwalk to 2 per cent [interest rates] without thinking about it,” said Wunsch, who is also governor of the National Bank of Belgium, in an interview with the Financial Times published on Monday.
“Let’s keep it open: if the data justify a new cut, we’ll cut. If they don’t, we might have to pause,” he said.
Wunsch said he felt “relatively comfortable” with the market expectation of 2 per cent rates by the end of the year “give or take 50 basis points”.
The ECB trimmed its deposit rate by 25 basis points to 2.75 per cent on January 30. Policymakers signalled another cut in March as concerns about sluggish economic growth in the bloc, which is barely above zero, took precedence over persistent inflation.
US regulator OCC fires staff as federal job cuts continue
The US regulator overseeing large national banks has dismissed 76 probationary employees, making it the latest agency to implement staff cuts under the Trump administration’s push to shrink the federal workforce.
Staff at the Office of the Comptroller of the Currency were informed on Friday that the probationary employees would leave by March 8, according to an internal email seen and first reported on by Bloomberg Law.
The dismissals are the latest in a wave of federal government job cuts targeting probationary employees at top financial regulators, who typically have one to two years of service and fewer job protections than long-term staff.
Last week, the Federal Deposit Insurance Corporation also notified 170 probationary staff of lay-offs, while the Consumer Financial Protection Bureau dismissed dozens of similar workers earlier this month.