Brussels, 28 November 2023 – The European Association of Co-operative Banks (EACB) was pleased to be invited to the European Parliament’s Committee on Economic and Monetary Affairs (ECON) Public Hearing on the digital euro. Joining the EACB representative, Marieke van Berkel, Head of Department Retail Banking, Payments, Digitalisation and Financial Markets at EACB, were Ignazio Angeloni, author of the study “Digital Euro: When in doubt, abstain (but be prepared)”, Miguel Fernández Ordóñez, economist and former Governor of the Bank of Spain, as well as former Secretary of State for Finance and Economy of the Government of Spain, and Vicky Van Eyck, Executive Director at Positive Money Europe.
The hearing took place in the context of the Commission's legislative proposal for the establishment of the digital euro, a component of the comprehensive single currency package. Invited guest speakers were encouraged to assess the risks and benefits from various standpoints, including privacy, payment system resilience, financial stability, and the impact on the banking sector.
The EACB conveyed its appreciation for reflections on a digital euro with digitalisation changing every aspect of society and the economy. But it also underlined a number of fundamental questions which to date require answering. Among others, the EACB addressed the need to evaluate the potential of deposit outflows and how it might impact the diversity of the banking sector, financing of the economy and financial stability. It also elaborated on the limited value of a digital euro for end-users, the question of the ECB mandate and that of strategic autonomy.
Further pinpointing cooperative bank’s concerns, Ms van Berkel underlined “The issue of outflows is important to cooperative banks as the deposits of households and SMEs are key to their role as financiers of the real economy across Europe. Setting a low maximum holding limit of EUR 500 in the Regulation would avoid putting the diversity of the banking system and financial stability at risk”. Looking back on the hearing, she commented: “Yesterday’s hearing reaffirms the need to dedicate more time for in-depth research. We should aim to better understand the ramifications of the digital euro before taking any important decisions”.
Please refer to the EACB’s presentation slides to see their key questions and recommendations to policymakers.