Graham Bishop Consultancy
Graham Bishop Consultancy is delighted to be a member of Realworld Capital's advisory group - providing advice at the crucial meeting place of EU politics, finance and economics - the vital pivot as the EU reacts to Covid-19
Graham Bishop’s consultancy practice covers several, related fields that are critical for investors and issuers - as well as risk managers and government affairs specialists. In the next few years, your business in the EU will face significant risks, but the well-informed can turn many of these into business opportunities.
His consultancy practice can help you tackle these risks as his services are designed to maximise your firm’s ability to tap into his overview of progress in fitting together the jigsaw of many disparate developments. That overview is essential as the risks and opportunities span such diverse subjects that many firms are not structured to deal with the implications for their business. That breadth of view will be even more essential as financial regulation responds to the Covid-19 pandemic in the years ahead.
Two themes dominate his work:
1. Developments in financial/economic integration that will deepen EMU and create a Capital Market Union that is also `green’
The 2019 European Parliament elections may have broken the duopoly of the two centrist political families but it also sent a strong message from electors about their concern over climate change. So the Parliament elected the Commission President on a platform to `green’ the financial system as a key mechanism to push the private sector to support sustainable development. There can be no mistaking the continued drive to deepen EMU and now to enhance the international role of the euro as part of the Covid-19 "green recovery" agenda.
Financial integration: Banking Union is now fully operational (though incomplete), and represents a massive pooling of sovereignty amongst the participating states. The 2019/24 term of the European Parliament and Commission may see a step change in the recognition of the implications of the financial measures already agreed - especially as the EU develops its recovery programme from Cocid-19
Capital Market Union may have a profound effect on many aspects of securities markets: The economic policies that drive the shape of the yield curve; credit spreads of governments; the nature and scale of market finance that must replace much bank funding of the economy; the regulatory response to these economic forces – especially on sovereign debt; the size, structure and riskiness of Europe’s banks and insurers. A key step forward may be the introduction of a "safe asset" for banks and citizens more generally. Graham Bishop is playing a leading role by proposing a Temporary Eurobill Fund (TEF) that is now gaining traction.
Economic Integration: The economic governance arrangements of the euro area have undergone a revolutionary change since the crisis broke in 2010. The next challenge is to check that agreed policies are actually operated by the Member States.
Euro area political integration: The euro area now has a QMV - in theory but not yet tested in practice. After Brexit, the euro area's QMV will be decisive with 75% of the population. Closer political union of the euro area seems to be underway but disintegration is still possible, given the economic stresses and political strains from populism. Interestingly, the shock of the UK's Brexit decision has generated a significant rise in pro-EU feelings around the rest of the EU - pushing belief that EU membership has been a "good thing" to 35-year highs.
`Brexit’: If you do business in (and with) Britain, you must also work through the evolving implications of the UK decision to leave the EU. The erosion of the UK’s influence in Europe has put at risk parts of the City and is already pushing many to re-locate into the euro area. But this remains a fast-changing landscape and some permanent damage to the UK's financial services industry is now inevitable.
How we do it
Graham Bishop’s personal consulting services can be delivered via the following:
Projects to research specific topics: These can be private research such as his partnership with Realworld Capital. This is a major, on-going project to promote Realworld Capital's next-generation Additional Tier 1 (AT1) hybrid capital funding instrument for European banks. It is designed to attract more investors to this category by making it more equitable to investors, issuers and society. We are working with the main European bank regulator and SSM (the EU's main banking supervisor) to tackle the current challenges faced by the banking industry in developing new funding solutions whilst still complying with CRD/CRR.
Another example is his recently completed European Commission contract to study "Factors driving investor demand for European sovereign bonds". This dovetails with his proposal for a Temporary Eurobill Fund. The work may be published such as that with London Economics on behalf of the European Commission "Non-bank financial institutions: assessment of their impact on the stability of the financial system".
Specialist Briefings: As an example, Graham has joined with CSFI at Chartered Institute of Securities and Investment (CISI) to host a monthly roundtable discussion on the developments in Financial Services regulation in the EU. With 150 such meetings already held, this event in the City of London is well attended and thought by many to be an unmissable opportunity to gain Graham's personal insight into the key developments. Such briefings can be organised for an individual firm, or its clients.
Articles can be written for an individual firm, or its clients. Graham Bishop also writes articles to stimulate polticial debate on technical financial points - such as the forthcoming paper for the European Liberal Forum "Two partial solutions to the imminent banking crisis".
Speeches: His approach is set out here, together with a listing of recent speeches and some video clips. Speeches can be delivered to an individual firm, or its clients
Graham Bishop’s credentials
Graham Bishop has steeped himself in the political, market and regulatory processes since the early 1990’s, when he played a key role in designing the changeover to the euro, both of national currencies and of Europe’s capital markets. His influence has built up since then when he pointed out to the Maastricht Treaty negotiators that government debt would have a fundamentally different quality in a common currency.
He is renowned for his vision and courage to propose radical ideas, yet ground them in a mastery of the technical details of the financial system… developed over four decades of studying the interaction of financial markets, economics and politics at major investment firms based in the City of London. His biography (link) sets out the breadth of his experience, underlining that his unique strength lies in the integration of his understanding of each of the four driving forces in this process (see graphic).
His influence at the meeting point of politics, economics and finance was recognised again when Commission President Barroso appointed him as a member of the Commission's "Expert Group on debt redemption fund and eurobills" (link). He is ever-closer to the cutting edge of financial policy-making. (Link to video of his evidence to ECON following the publication of the Expert Group’s Report in March 2014). The recent European Commission assignment to study "Factors driving investor demand for European sovereign bonds" underlines the continuing interest of policymakers in his proposal for some form of “eurobills”.
As a dedicated Europhile, Graham offers his experience and insights on a pro bono basis in key fields to EU policy-makers. Specifically, he has proposed and crafted the ‘Temporary Eurobill Fund’ (link) and held detailed conversations in Berlin, Brussels, Frankfurt, London and Paris. A Temporary Eurobill Fund would change the euro area government debt market dramatically, as well as having much broader implications for the EU's financial system.