Rubric DSTA OUTLOOK EVENT 2016 www.ecb.europa.eu
Welcome Also to our 15 Primary Dealers for 2016 ABN Amro Bank Barclays Capital* Citigroup* Commerzbank* Deutsche Bank Goldman Sachs HSBC France ING Bank* Jefferies Natixis Nomura Rabobank* Royal Bank of Scotland* Santander GB&M Société Générale * Also Commercial Paper Dealer and our 5 Single Market Specialists BBVA Crédit Agricole DZ Bank Nordea UBS* 2 DSTA Outlook Event 2016
Today s programme 15.00 hrs Welcome 15.05 hrs Introduction on Liquidity and QE by Ralph Weidenfeller (ECB) 15.20 hrs Panel discussion led by Sander Schol (JPM) 16.00 hrs Coffee break 16.30 hrs Presentation Outlook 2016 by Niek Nahuis (DSTA) and Q&A 17.10 hrs DSTA Awards 17.15 hrs Drinks & Bites 3 DSTA Outlook Event 2016
Rubric DSTA Niek Nahuis The Hague, www.ecb.europa.eu
Overview of this presentation Economic and budgetary outlook Looking back on funding 2015 Risk framework 2016-2019 Funding plan 2016 Questions & answers 5 DSTA Outlook Event 2016
Economic and budgetary outlook 6 Outlook 2010 11 december 2009
Economic projections for 2015 have improved Figures for 2015 Dec 2014 Dec 2015 GDP growth 1.50% 2.0% Private consumption 1.25% 1.7% Investment 3.25% 7.1% Exports 4.50% 4.7% Unemployment 6.25% 6.9% Source: CPB 7 DSTA Outlook Event 2016
Economic projections 2016 Sep 2015 Dec 2015 GDP growth 2.4% 2.1% Private consumption 1.9% 2.2% Investment 6.0% 6.8% Exports 5.1% 4.4% Unemployment 6.7% 6.7% Source: CPB 8 DSTA Outlook Event 2016
Cash balance improved by one-offs 2015 2016 Dec 2014 Dec 2015 Dec 2015 EMU deficit (% GDP) -1.8-2.2-1.8 EMU debt (% GDP) 69.6 66.6 65.4 Sep 2014 Nov 2015 Sep 2015 Cash deficit ( bn) 12.2 1.5 7.6 Sources: CPB (EMU deficit and debt), Ministry of Finance (cash deficit) 9 DSTA Outlook Event 2016
10 Looking back on funding 2015
Looking back on funding 2015 Capital market 48 bn = 48 ( 47.4 bn) Money market under pressure 11 DSTA Outlook Event 2016
Cash deficit and money market ( md) 14 12 10 8 6 4 2 31 29 27 25 23 21 19 17 27 25 23 21 19 17 0 Cash deficit 15 MM instruments 15 Collateral Early redemption ABN Amro / Fortis IPO ABN Amro Bank Economy and other Unwinds IRS swaps Remaining cash deficit Remaining MM instruments Remaining Cash Collateral 12 DSTA Outlook Event 2016
Money market below desired level 45 40 35 30 25 20 15 10 5 0 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015 Apr 2015 Jul 2015 Oct 2015 DTC ECP Cash 13 DSTA Outlook Event 2016
Plaatje risk framework Risk framework 2016-2019 14 Outlook 2010 11 december 2009
Interest rate risk framework 2008-2015 7-year benchmark as the core of our risk framework Interest rate risk management and funding policy fully separated Deviations from the benchmark since 2012 led to an increased average maturity Recommendations evaluation 2015: increase maturity introduce clear risk indicators and reduce dependency on swaps 15 DSTA Outlook Event 2016
Average maturity debt portfolio 2008-2019 7 6 6.4 5 4 3 2 Risk management 2008-2011 Risk management 2012-2015 Risk management 2016-2019 Tolerance margin 16 DSTA Outlook Event 2016
Consequences Introduction of maximum refixing amount Funding strategy remains unchanged Swaps become a fine tuning instrument Issuance more important in risk management Option to revise strategy 17 DSTA Outlook Event 2016
Plaatje funding plan 18 Funding plan 2016 Outlook 2010 11 december 2009
Borrowing requirement 2016 Borrowing requirement ( bn) Capital market redemptions 2016 28.2 Money market ultimo 2015 22.4 Cash collateral ultimo 2015 20.6 Cash deficit 7.6 Total funding requirement 2016 78.8 19 DSTA Outlook Event 2016
Funding need 2016 Funding ( bn) Capital market 25 30 Money market 28.2 33.2 Cash collateral ultimo 2016* 20.6 Total funding requirement 2016 78.8 * No estimation possible, cash collateral ultimo 2015 Money market remains primary buffer New in 2016: target range capital market 20 DSTA Outlook Event 2016
Redemption profile new issuance 2016 50 45 40 35 30 25 20 15 10 5 0 Current redemptions New 10-year DSL New 5-year DSL First off-the-run Other longer dated off-the-runs 21 DSTA Outlook Event 2016
Issuance in 2016 DSL Indicative amount ( bn) New 10-year DSL 15 New 5-year DSL 7.5 10* Reopening longer dated off-the-run DSLs 2.5-5 Total DSL funding 25-30 * Will be reopened again in 2017 to reach 15 bn DSL issuance every 2nd Tuesday, 4th Tuesday as reserve date DTC issuance every 1st and 3rd Monday of the month 22 DSTA Outlook Event 2016
Q & A Q & A plaatje 23
Q & A Q & A plaatje 24 DSTA Awards
DSTA Awards Quotation achievements in 2015 Best DTC quoting bank Best DSL quoting bank Commerzbank ING Bank 25 DSTA Outlook Event 2016
DSTA Awards Top 3 CP-dealers 1 Rabobank 2 ING Bank 3 Citigroup 26 DSTA Outlook Event 2016
DSTA Awards Top 3 DTCs 1 Commerzbank 2 ING Bank 3 HSBC France 27 DSTA Outlook Event 2016
DSTA Awards Top 3 DSLs 1 ABN Amro Bank 2 Royal Bank of Scotland 3 ING Bank 28 DSTA Outlook Event 2016
Highlights Outlook 2016 Capital market funding: target range 25-30 bn New 5-year DSL before the summer. DSL will reach 7.5 bn - 10 bn in 2016; the rest in 2017 New 10-year DSL March. DSL will reach 15 bn in 2016 A minimum of two reopenings of longer dated off-the-run bonds in 2016 29 DSTA Outlook Event 2016