Despite strengthening of regulatory environment, EUF accomplish their mission

During the 5th EUF Summit that took place in Lisbon 21-22nd of March, BCR Publishing spoke to Francoise Palle-Guillabert, Chair of EUF, about the EUF’s achievements of last year and their future plans for the next 12 months.

BCR: What was the most challenging achievement of EUF in 2018 and why?

FPG: In a context where factoring has to face crucial prudential and legal issues (Anacredit, NPL, Basel III, Rome 1, SMEs definition...), we have accomplished our missions. Four major objectives have been achieved:

  • We have lobbied the European institutions on all these issues and the most remarkable result is that we have obtained a better calibration of NSFR for factoring with assimilation to trade finance for the needs of liquidity calculation. This is real success that will allow EU factoring companies and their mother banks to save a lot of money.
  • Secondly, we published antitrust Compliance Guidelines.
  • Thirdly, we have modified the EUF Rules of membership in the perspective of a possible Brexit in a way that maintains close relationships with our UK members and in the same time preserves the European Union field of action of EUF and the governance of the Association. The new status of partner introduced in the Rules of membership will allow European countries which are not EU members to join the Association. We already have candidates.
  • Fourthly, we have had an active communication approach to promote factoring and its benefits for the economy. EUF is now active on social networks, with a dedicated LinkedIn page. The EUF White Paper, which is a masterpiece in our communication, has been updated. It demonstrates that the European Factoring and Commercial Finance is a real success story, with very low loss levels. From a regulator’s perspective this implies that this form of funding should be associated with a lower risk weighting and a lower cost of capital.

BCR: What are the most important objectives to be achieved for the next 12 months?

FPG: Great challenges still await us for 2019. An example is the EU political agenda. We are on the eve of the European elections. The EUF Board decided to put in place a contact plan, by this summer, with the newly elected MEPs. We must take the opportunity of the EU elections to raise awareness about factoring. During 2018, factoring total turnover increased by 8% in Europe, reaching 1.7 trillion € and financing more than 200,000 businesses, mostly SMEs. The EU is the first market for factoring in the world. Also, we have many files to work on: upcoming report on supply chain finance, law applicable to the third-party effects on assignments of claims, finalisation of Basel III, digitisation of the economy, assessment of the late payment directive, etc. I also have my strategic plan, that has been adopted by the Board to enlarge the membership of EUF.

BCR: How do you see the EU factoring development in the next 12 months and how do you think that Brexit will impact it?

FPG: It is very difficult to make forecasts in this uncertain context. As you know I had the honour to moderate a round table about this issue during the EUF/FCI European Summit in Lisbon in March. What I can tell you is that it seems that the factors are prepared for all eventualities.

The EUF Council during the EUF/FCI Summit in Lisbon – March 2019