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08 September 2011

This week in "Brussels"
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Articles from 21 July 2011 - 08 September 2011

Banking

ECB published results of the July 2011 bank lending survey for the euro area
The bank lending survey, which is conducted four times a year, usually at the beginning of each quarter, was developed by the Eurosystem in order to enhance the understanding of bank lending behaviour in the euro area.   View Article
SEPA from the perspective of ECB Executive Board Member, Peter Praet
Mr Praet stressed that despite the controversy, it is necessary to determine a clear deadline for migration to the SEPA credit transfer and the SEPA direct debit, in order to bring SEPA to a successful conclusion.   View Article
EBA published two consultations outlining guidelines for data collection on bank remuneration practices
The first consultation outlines definitions and information to be submitted, and offers a template to submit information to appropriate regulators on the remuneration benchmarking exercise. The second focuses on a remuneration data collection exercise regarding high earners.  View Article
BBA statement regarding CRD IV
The BBA issued a statement saying that CRD IV broadly reflects the Basel decisions, which the BBA welcomes as essential for creating a more stable international banking system. However, the big unanswered question is how these changes will impact on the supply of credit into the economy.   View Article
Joint trade associations' consultative document on effective resolution of SIFIs
Major players in the global financial services industry expressed their strong support that authorities in all relevant jurisdictions should have the capacity to resolve systemically important financial institutions without systemic disruption and without exposing the taxpayer to the risk of loss.  View Article
OECD published report on bank competition and financial stability
The report examines the interplay between banking competition and financial stability, taking into account the experiences in the recent global crisis and the policy response to it.   View Article
FN: Bank regulations set to hit European private equity
Europe's private equity industry risks missing out on up to $7.5 billion a year due to bank solvency regulations, new figures reveal.  View Article
IMF published working paper on cross-border banking linkages
The paper finds that the relationship between the likelihood of a banking crisis in a country and the degree of integration of that country's banking sector into the global banking network is “far from trivial”.  View Article
IMF published paper on Capital Regulation and Tail Risk
The IMF published a paper that studies risk mitigation associated with capital regulation, in a context where banks may choose tail risk assets. The paper finds that this approach undermines the traditional result that high capital reduces excess risk-taking driven by limited liability.   View Article
BIS: Preliminary international banking statistics, Q1 2011
Between end-December 2010 and end-March 2011, the cross-border claims of BIS reporting banks rebounded by 1.5 per cent ($466 bn) after a drop of similar magnitude in the previous quarter. The increase was driven mainly by US dollar lending, to both banks and non-banks, which rose by 3.9 per cent.   View Article
CEPS: The second EU bank stress test - further work in progress
In his evaluation of the results from the 2nd EU bank stress test published 15 July 2011, CEPS CEO, Karel Lannoo, finds clear improvement compared to the first test, thanks in part to the new institutional set-up. He notes, however, that much works remains to be done on the substantive side to calibrate the results further and extend it to a broader sample of the EU banking sector.  View Article
FT: Global banks scored on capital requirements
The Basel Committee on Banking Regulation announced on Tuesday it had scored 73 of the world's largest banks on their size, complexity, cross border presence and the extent to which they are irreplaceable. 28 of them would face additional capital requirements if the new rules were applied today.  View Article
IMF published working paper on possible unintended consequences of Basel III and Solvency II
The IMF published a staff level working paper that seeks to present similarities and differences among Pillar 1 requirements of the two accords, and discusses possible unintended consequences of their implementation.  View Article
CPSS: Payment, clearing and settlement systems in the CPSS countries - Volume 1
The Committee on Payment and Settlement Systems (CPSS) has released a new edition of its reference work on payment and other financial market infrastructures in the CPSS countries, widely known as the "Red Book".  View Article
Mortgage credit reform: Time to serve the real economy
Spanish Socialist, Antolín Sánchez Presedo, looks at how better to protect borrowers and put Europe's credit industry on a more solid foundation.  View Article
WSBI-ESBG response to the FSB consultation towards stakeholders on deposit insurance systems
In the World Savings Banks Institute's and European Savings Banks Group's view, with regard to the functioning of deposit insurance within the safety net, two central aspects (interdependence between the individual parts of system and double-edged nature of components) seem worth being explicated.   View Article
BBA: Financial Stability Board must be 'clear and consistent'
The British Bankers' Association has urged the Financial Stability Board to be clear and consistent in setting out the requirements for recovery plans for the systemically important financial institutions in all countries (response to the consultation paper from the FSB and the BCBS).  View Article
BDO: Basel Committee should follow FSA blueprint
The FSA approach was to introduce liquid assets over an extended period of time to ensure it did not add additional stress to the already financially-weakened banking sector.   View Article
GFMA comments on Basel Committee’s capital surcharge proposal
The Global Financial Markets Association (GFMA) announced it has submitted comments to the Basel Committee on Banking Supervision in response to the Consultative Document: 'Global systemically important banks: Assessment methodology and the additional loss absorbency requirement'.  View Article
Final EBF response to BCBS consultation on assessment methodology and additional loss absorbency of G-SIBs
The European Banking Fedaration comes forward with a number of suggestions with a view to the presentation of a more elaborate proposal at the forthcoming G20 Summit in November 2011.   View Article
Bloomberg: Global bank capital regime at risk as regulators spar over rules
Basel III capital standards may be eroding as the US faces formidable problems with the rules because of conflicts with the Dodd-Frank Act, and European officials rewriting regulations.   View Article

Securities

Commission published info-letter on Post-Trading
The letter offers an update on the ongoing work streams, including on trade repositories and access to data, the harmonisation of Central Securities Depositories (CSD) legislation, and progress on the European Market Infrastructure Regulation (EMIR).   View Article
IOSCO-CPSS releases report on requirements for OTC derivatives data reporting and aggregation
IOSCO and CPSS have set out guidelines for standardising the reporting of derivatives trades as part of a continued drive to increase transparency and prevent the build-up of systemic risk between dealers of over-the-counter products.  View Article
Polish Presidency published new compromise text on EMIR
The Polish Presidency has now included the word OTC (no longer in brackets throughout the entire text). This means that they want EMIR only to cover OTC derivatives contracts.   View Article
European Commission extends review of planned business combination
Deutsche Börse AG and NYSE Euronext confirm that the European Commission has initiated a Phase II review of their proposed business combination. The Commission's decision to open an in-depth investigation was fully anticipated and does not in any way prejudge or prejudice the ultimate outcome.  View Article
FT: LSE backs BATS merger with Chi-X
The London Stock Exchange, UBS and the Investment Management Association (IMA) are among parties that have told UK antitrust authorities they do not object to the merger of BATS Europe and Chi-X Europe, a deal which could create the largest pan-European share trading platform.  View Article
FN: Is settlement the panacea for the LSE?
The London Stock Exchange, which is under pressure to redefine its long-term strategy after its failed attempt to merge with Canadian counterpart TMX Group, is eyeing opportunities in settlement, its chief executive said this week. And it could be just the right time.  View Article
WSJ: LSE in talks with LCH.Clearnet
The London Stock Exchange Group PLC said Friday it is in talks with LCH.Clearnet, Europe's only independent clearinghouse, just over two months after the UK exchange operator failed in obtaining enough approval to merge with Canadian exchange company, TMX Group Inc.  View Article
CFIUS completes review of NYSE Euronext and Deutsche Börse combination
NYSE Euronext today announced that it has been notified that the Committee on Foreign Investment in the United States (CFIUS) has completed its review of the combination transaction with Deutsche Börse AG without objection to the transaction going forward.  View Article
FN: LCH.Clearnet goes exclusive with Markit
LCH.Clearnet, an Anglo-French clearinghouse, has entered into exclusive negotiations with Markit, the credit information and market infrastructure provider, regarding a potential takeover of the clearinghouse, according to two sources familiar with the situation.  View Article
FN: Deutsche Börse rebuffs merger critics
Deutsche Börse has rebuffed growing criticism of its landmark merger with NYSE Euronext, claiming that the controversial deal, which is currently being investigated by Europe's antitrust authorities, will benefit Europe by increasing liquidity and lowering the cost of raising debt and equity.  View Article
FT: Deutsche Börse and NYSE Euronext tie-up faces probe
Plans to create the world's largest exchanges group by combining Deutsche Börse with NYSE Euronext are to be submitted to an in-depth probe after European antitrust authorities raised “significant concerns” over its dominance in derivatives trading.  View Article
FN: NYSE profit down but deal on track
Stock exchange operator, NYSE Euronext, reported a near-20 per cent drop in net profit for the second quarter, due partly to higher costs tied to its planned merger with Germany's Deutsche Börse and the absence of a tax gain recorded in the year-earlier period.  View Article
FT: LSE chief warns of merger's threat to UK voice
London's position as a global financial centre is under threat from the proposed merger of Deutsche Börse and NYSE Euronext as key investment decisions affecting the group's UK businesses may shift abroad, the chief executive of the London Stock Exchange, Xavier Rolet, has warned.  View Article
FN: Nasdaq echoes LSE concerns on NYSE-Börse deal
Nasdaq OMX has added its voice to concerns over the merger between rival NYSE Euronext and Deutsche Börse. The transatlantic exchange said in a note, seen by Financial News, that the proposed new group would "establish a monopolistic situation" that would hinder competition.  View Article
FN: LSE intensifies its fight against NYSE-Börse deal
The London Stock Exchange has stepped up its lobbying efforts against the merger between NYSE Euronext and Deutsche Börse, claiming that the entity would eliminate competition in the European derivatives market and that the two companies have a record of acting against customers' best interests.  View Article
FT: Liberalisation push on ‘listed’ derivatives
European regulators are pushing for the removal of barriers to competition in derivatives traded on exchanges and for greater transparency in bond trading, as part of sweeping reforms to market structures in the region.  View Article
ISDA publishes analysis of counterparty credit risk management in the US OTC derivatives markets
The paper examines the extent of counterparty credit losses and notes the efficacy of credit mitigation techniques in the US banking system.  View Article
ESMA published updated list of measures adopted by competent authorities on short selling
ESMA today published an update regarding the measures taken by EU competent authorities regarding short selling. This update includes measures taken by Belgium, France, Greece, Italy and Spain.  View Article
Reuters: Hedge funds shift target after short selling bans
Hedge funds have raised their bets against financial stocks in the UK, United States and Germany as a short selling ban in four eurozone countries prompted them to focus elsewhere for ways to profit from the banking sector's difficulties.  View Article
AFME response to extension of short selling bans by Italy, France, Spain and Belgium
Sander Schol, a director of AFME, said that it was unclear whether the recent bans have had the desired effect on stabilising the markets and restoring investor confidence.  View Article
CNMV temporarily extends preventive ban on transactions which might constitute/increase net short position on Spanish financial stocks
The CNMV has agreed to extend the deadline of the decision adopted on 11 August 2011 until 30 September 2011.  View Article
Italy extends the deadline for temporary measures on short selling
Consob, acting in close cooperation with the other European regulators (Belgium, France, Spain and Greece), has decided, by Resolution no 17911, to extend the deadline of its August 12 resolution restricting the possibility of taking net short position on certain shares, until September.  View Article
Greek short selling ban extended
The Hellenic Capital Markets Commission (HCMC) is monitoring closely developments in the markets in cooperation with ESMA and the supervisory authorities of France, Italy, Spain and Belgium, which have adopted emergency measures to limit or prohibit short selling.  View Article
The Board of the Autorité des Marchés Financiers renews the ban on taking net short positions in French securities of the financial sector
Before the end of September 2011 and upon consultation with the above mentioned regulators, the AMF will assess the opportunity of lifting the temporary ban. The aim is to lift the ban as soon as market conditions allow it and, as far as possible, in a coordinated way.  View Article
FSMA publishes new FAQs on short selling
The FSMA today published a new version of the FAQs concerning the ban on short selling of financial shares.  View Article
FT: European shorting ban extended
Short selling bans on selected European bank stocks have been extended by regulators until the end of September in an unprecedented degree of regulatory coordination.  View Article
FN: CDS prices fall after short selling bans
The five-year credit default swap (CDS) price of Société Générale – the precipitous sell-off that prompted European regulators to act – has recovered sharply since the ban was imposed.  View Article
FT: France backs down on short selling loophole
French regulators have failed in an attempt to extend the short selling ban to major European stock market indices, in a climbdown that will allow investors to continue to bet on further falls in financial stocks.  View Article
AIMA responds to temporary short selling bans
The Alternative Investment Management Association (AIMA), the global hedge fund association, has responded to the temporary short selling bans introduced by France, Italy, Belgium and Spain.  View Article
FN: What has been the effect of the shorting ban?
Local authorities in Belgium, France, Italy and Spain yesterday dipped into controversial territory, imposing a ban on short selling financial stocks due to recent volatility in financial markets. So what difference has it made?  View Article
FT: Shorting ban will not stabilise markets
Industry commentators suggest previous experience of banning short selling shows it does not bring greater stability, with some even warning that it could increase the risk of recession.  View Article
EDHEC-Risk Institute denounces short selling bans
EDHEC-Risk Institute condemns the August 11 decisions by the financial market authorities in Belgium, France, Italy and Spain to impose or extend short selling bans in the wake of renewed market volatility.   View Article
ESMA promotes harmonised regulatory action on short selling in the EU
ESMA today published a statement on the harmonised action by national competent authorities on short selling.  View Article
CNMV temporary ban of short positions on financial stocks
The Spanish regulator decided to ban, as a temporary preventative measure with immediate effect, any legal or natural person from entering into transactions which might constitute or increase a net short position on Spanish financial stocks.   View Article
Decision by the AMF Chairman: Ban on taking net short positions in French securities of the financial sector
This decision does not apply to financial intermediaries acting as market makers or liquidity providers when they are operating under a contract with the relevant market undertaking or with the issuer concerned, or when acting as counterparty for block trades in equities.  View Article
FT: European quartet bans short selling
France, Italy, Spain and Belgium have banned all short selling of financial stocks for 15 days in response to sharp share price falls this week, but they failed to convince other regulators to go along with a European Union-wide prohibition.  View Article
ESMA publishes updated list of measures adopted by competent authorities on short selling
ESMA today published an update regarding the measures taken by EU competent authorities regarding short selling. This update includes measures taken by Greece.  View Article
FN: Politics has not stopped sovereign CDS appetite
There is no doubt as to what the predominating influence on the credit default swap market is at the moment, if not indeed on the entire capital market. "It's the sovereigns that are leading the rest of the market", said a CDS broker recently.  View Article
Futures: EU looking to restrict CDSs
The proposed rules, that still need to face parliamentary vote to enact, would require traders to settle their uncovered short positions by the end of each trading day and restrict CDS purchases to owners of related government bonds that are dependent on these bonds.  View Article
Parliamentary question on CDS and the role of the ISDA
Pascal Canfin, rapporteur on the short selling and CDS dossier, submitted a written question to commissioner Barnier questioning the role of the International Swaps and Derivatives Association when determining what constitutes a sovereign credit event.  View Article
FN: EC toughens stance on MiFID
The European Commission is set to clamp down on regulatory arbitrage across the European Union by limiting the amount of discretion Member States will enjoy when implementing the next version of MiFID, according to a draft version of the rules.  View Article
FN: MiFID II timing spells two more years of doubt
The final text of the European Commission's Markets in Financial Instruments Directive II – the document that will transform trading in Europe – is set to be published on October 21, nearly four months later than planned.  View Article
ESMA provides opinions on pre-trade transparency waivers
ESMA provided its first opinions on pre-trade transparency waivers to competent authorities. These opinions contribute to a common supervisory culture and consistent supervisory practices. The decisions on ESMA opinions to competent authorities are taken by simple majority.  View Article
European Covered Bond Council publishes Fact Book 2011
The ECBC presents the sixth edition of the European Covered Bond Fact Book, which is intended to be a benchmark and comprehensive source of information on this asset class.  View Article
EDHEC-Risk published a position paper on the price volatility in the food markets
In reviewing the evidence so far regarding the impact of commodity trading, speculation, and index investment on price volatility, the report finds that the evidence for the prosecution does not seem particularly compelling at this point.  View Article
FESE publishes European Exchange Report
The European Exchange Report is compiled by the Federation of European Securities Exchanges (FESE) and represents a valuable source of integrated information on Europe's exchange industry.  View Article
FN: New ETF costs double
Exchange-traded funds launched this year cost twice as much as their existing competitors, according to research by Financial News.  View Article
Hedgeweek: EMCF says yes to interoperability and announces new fee schedule
European Multilateral Clearing Facility, Europe's largest cash equities central counterparty, is to engage in interoperability with competitors servicing European MTFs and exchanges. In addition, a competitive new fee schedule will be introduced ahead of interoperability.  View Article
FT: UK turns down ECB securities project
Britain has opted out of an ambitious European Central Bank project to streamline Europe's multiple securities settlement systems, even though the project could eventually help lower the cost of trading in the region's capital markets.  View Article
AMF publishes 2010 report on CRAs
The AMF's seventh annual report on credit rating agencies covers international regulatory developments, the European registration procedure, and credit ratings.  View Article
ESMA publishes responses to the consultation on the technical advice on possible delegated acts concerning the Prospectus Directive
The purpose of this consultation document from ESMA is to seek comments on the technical advice that ESMA proposes to give to the European Commission on a number of possible delegated acts.  View Article
FESE response to ESMA Consultation Paper on possible delegated acts concerning the Prospectus Directive
FESE fully agrees with European supervisors that there is an adequate level of flexibility in the current Prospectus regime, and feels strongly that the current distinction between a Regulated Market (RM) and an MTF should be retained.  View Article
Reuters: Regulators seek trading secrets
US securities regulators have taken the unprecedented step of asking high-frequency trading firms to hand over the details of their trading strategies, and in some cases their computer codes.  View Article
SEC seeks public comment on use of derivatives by mutual funds and other investment companies
The Securities and Exchange Commission voted to seek public comment on a wide range of issues raised by the use of derivatives by mutual funds and other investment companies regulated under the Investment Company Act.  View Article
US regulators seek public input for a joint CFTC-SEC study on international swap regulation
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that the CFTC and the SEC jointly study and then report to Congress on swap regulation and clearinghouse regulation in the United States, Asia and Europe.  View Article
SEC sets up large trader reporting system
The Securities and Exchange Commission is pressing ahead with the creation of a system to collect transaction data from large traders, such as banks and hedge funds, that will help it to investigate wild stock market swings, as with last year's May 6 flash crash.   View Article
GFS: US regs - Basel III conflicts with Dodd-Frank
Republicans and Democrats on the House Financial Services Subcommittee noted that the section of the Dodd-Frank Act relating to credit ratings agencies was one of the few sections of the law to receive bi-partisan support last year.  View Article

Insurance

Solvency II to hit insurance competition
The proposed new insurance regulatory regime could cost insurers less-profitable businesses and lead to mergers and takeovers in worst cases.  View Article
FT: Solvency II optimism breaks out
New regulations will not force European insurers to dump equities and longer-term corporate debt and buy government bonds as many have predicted, according to research from Union Bancaire Privée.   View Article
FT: Insurers face 'Herculean' task with Solvency II
The joint study between Bain & Company and Towers Watson showed few insurers were prepared for the Solvency II operating environment and may not be able to earn their cost of capital, even if the regulation is postponed until 2014.   View Article
FN: European Commission defiant over Solvency II
The European Commission has pledged to stick to its guns over new insurance regulations, despite criticism from the private equity industry that the approach is inflexible and will penalise unlisted firms.  View Article
ECON Committee published draft report on Omnibus II
The Committee of Economic and Monetary Affairs of the European Parliament has released its draft report on Omnibus II, with the proposal that the full requirements of Solvency II should not be implemented until 1 January 2014.  View Article
ECON Committee debate on draft report on Omnibus II Directive
Rapporteur Brukhard Balz (DE, EPP) stressed that two major concerns for the insurance and reinsurance industry are the issue of third country equivalence and the transition period.  View Article
EIOPA launched technical consultation on the Solvency II XBRL Taxonomy
EIOPA is currently developing harmonised Solvency II Quantitative Reporting Templates. Within the scope of this work, EIOPA is also developing XBRL taxonomy describing the Solvency II reporting in the harmonised data format to be used for the transmission of Quantitative Reporting Templates.  View Article
Leading insurers call for greater cross-sectoral coordination in regulatory reform to strengthen global financial system
The IIF's Insurance Working Group, in collaboration with Oliver Wyman, published a new report today entitled 'The Implications of Financial Regulatory Reform for the Insurance Industry', highlighting the potential impact on the insurance industry of regulatory reforms in both banking and insurance.  View Article
IAIS comment letter on the IFRS Foundation Trustees' strategy review
IAIS, the international insurance supervisors, published a comment letter on the Report of the IFRS Foundation Trustees' Strategy Review: "IFRSs as the global standard: Setting a strategy for the Foundation's second decade ('the Report')".   View Article
WSJ: European sovereign-debt insurance costs rise to records
The cost of insuring European sovereign debt was higher than its all-time record close in late trading Friday, after cracks appeared in solutions deemed necessary to navigate out of the ongoing sovereign-debt crisis.   View Article
EIOPA launches consultation on the equivalence assessment of the Bermudan, Japanese and Swiss supervisory systems
The goal of this equivalence assessment is to ensure that the third country regulatory and supervisory regimes provide a similar level of policyholder/beneficiary protection to the one provided under the Solvency II Directive.  View Article
FEE published Briefing Paper Enhancing the Quality of Solvency II Public Reporting - Benefits of Harmonising Auditor Reporting for the User
FEE highlights the importance of addressing the users' expectations by recommending harmonisation of the requirements for independent assurance on regulatory disclosures for insurance undertakings in the European Union under the Solvency II framework.  View Article
FERMA responds to Green Paper on insurance governance
The Federation of European Risk Management Associations (FERMA) that gathers national risk management associations from 17 countries including 14 EU Member States has welcomed the European Commission's goal to ensure corporate governance rules are fit for purpose.  View Article

Asset Management

UK asset managers call for supportive regulatory and competitive environment to benefit investors
The principal risk is that firms may choose to focus future expansion plans outside the UK. To combat these risks, the industry seeks an unequivocal signal from the Government that the UK is 'open to business'.  View Article
ESMA consults on future rules for alternative investment fund managers and the treatment of third country entities
ESMA published a consultation paper setting out its proposals for the detailed rules on supervision and third country entities underlying the Alternative Investment Fund Managers Directive (AIFMD).  View Article
ALFI and LPEA reply to EU Commission consultation on venture capital (VC)
The reply claims that AIFMD is not tailored to VC funds. In particular, no lighter regime has been foreseen that could apply to small and medium VC managers, while granting them access to the passport for their funds under the AIFMD.  View Article
Speech by FSA Sheila Nicoll about AIFMD – ESMA's draft technical advice to the European Commission
Ms Nicoll focused on what she sees as the important issues in that consultation. She also talked about how ESMA is developing proposals for the important third-country aspects of the Directive.  View Article
EFAMA: UCITS enjoyed net inflows of €18 billion in the second quarter of 2011
The European Fund and Asset Management Association has published its latest Quarterly Statistical Release, which describes trends in the European investment fund industry in the second quarter of 2011.  View Article
Germany establishes a mutual-funds ombudsman
German fund managers have been obliged to set up a new national investor complaints service, as the latest funds regulations from Europe make their presence felt.  View Article
FT: Fund managers 'lagging behind' on Kiids deadline
Key investor information documents (Kiids) became compulsory for all new funds from July 1 this year, as part of the implementation of UCITS IV regulations. They are designed to replace the simplified prospectus with a more concise and accessible document.  View Article
ESMA seeks preliminary views on the potential shape of future regulation of ETFs and structured UCITS
In the discussion paper, ESMA examines the possible measures that could be introduced to mitigate the risk that particularly complex products, which may be difficult to understand and evaluate, are made available to retail investors.   View Article
FN: Euro VCs ask to be regulated
Europe's venture capital and growth capital communities that will not be hit by controversial regulations governing the private equity industry have called for the European Commission to implement a lighter-stance regime for them to enhance their international credibility.  View Article
IPE: Dutch economists call for capital-funded private pensions
Two leading Dutch economists have argued that the EU and its Member States should encourage capital-funded private pensions, as they can enlarge the capital market and the market for pension services, as well as improve risk sharing between the generations.  View Article
FN: UK pension funds face inflation-linked headache
The demand for safe-haven assets such as UK gilts has reached such proportions that it is creating problems for pension funds' investment strategies, according to the consultants that advise them.  View Article
IPE: Aon Hewitt claims pan-European pensions regime could be way forward
Aon Hewitt suggested considering a pan-European pensions regime instead of individual national guidelines. In its submission to EIOPA, the consultancy argued that employers should be granted more freedom to design retirement programmes to align them better with their own corporate needs.  View Article
IPE: Polish experts critical on pensions infrastructure proposal
Several experts in Poland have condemned as unrealistic a proposal to invest pension contributions in infrastructure. It was tabled by the labour minister, Jolanta Fedak.  View Article
IPE: AEIP reverses previous stance, urges against use of Solvency II for IORPs
Solvency II should not be used as a basis for the revised IORP Directive, the European Association of Paritarian Institutions of Social Protection (AEIP) has said, changing its stance following an earlier endorsement of the regulations.  View Article
EFRP warns of further Hungary-style repossession of CEE pension assets
Bringing Central and Eastern European (CEE) countries' pension systems under the IORP Directive could lead to governments following Hungary's lead and shifting all second-pillar assets back into the country's social security system, the European Federation for Retirement Provision (EFRP) has warned.  View Article
IPE: NAPF says EC fails to grasp diversity of European pension systems
The European Commission's attempt to harmonise regulation shows that it lacks a proper understanding of European pension systems' diversity, according to the UK National Association of Pension Funds (NAPF).  View Article
CEA reiterates call for pension funds to fall under Solvency II
The European Commission is currently reviewing the 2003 Institutions for Occupational Retirement Provision Directive, and the CEA submitted its response to the first consultation by the European Insurance and Occupational Pensions Authority.  View Article
NAPF steps up campaign to protect pension schemes from Solvency II
In a submission to the EU pensions regulator EIOPA, the NAPF rejects the European Commission's assumption that large sections of the insurance industry's Solvency II Directive should be adapted for pensions. The NAPF also presses for a rigorous examination of the case for a new pensions Directive.  View Article
IPE: European pension funds adopt 'wait and see' approach to market turmoil
European pension schemes are adopting a 'wait and see strategy' as the US market remains highly volatile.  View Article
NAPF comment: Public sector to pay more into its pensions
The National Association of Pension Funds (NAPF) reacted to the UK Government's announcement that many public sector workers will pay more into their pensions.  View Article
FASB: Improvement of employer disclosures for multi-employer pension plans
The FASB approved a revised accounting standard intended to provide more information about an employer's financial obligations to multi-employer pension plans.  View Article
EIOPA published three reports on occupational pensions
A new Report on Market Developments 2011 provides a general overview on the developments in cross-border arrangements of Institutions for Occupational Retirement Provision (IORPs). This is the fifth report in a series on market developments and shows the growth in the number of cross-border IORPs.  View Article

Corporate Governance/Accounting

EFRAG: European outreach on the IASB's staff draft of the ED Financial Statement Presentation – comments on EFRAG's Paper
EFRAG issued a letter to the IASB on the comments on the Paper 'Financial Statement Presentation', which complements the feedback on the meeting with European constituents published in February 2011, and completes the overall picture of the European views on the IASB's tentative decisions.  View Article
EFRAG's invitation to participate in the field-testing of the forthcoming revised proposals on revenue recognition
EFRAG, in partnership with European National Standard Setters and in close coordination with the IASB, will conduct field-testing of the revised IASB proposals on revenue recognition, which are expected to be published by the end of September 2011.  View Article
IASB's proposal of adjustment to effective date of IFRS 9
The IASB published for public comment an exposure draft of proposals to adjust the mandatory effective date of IFRS 9 'Financial Instruments'. The exposure draft proposes an effective date of 1 January 2015 (currently 1 January 2013) for IFRS 9.  View Article
Letter from IASB to ESMA regarding the accounting for Greek government bonds
The IASB has concerns with indications that some European companies are applying the accounting requirements for fair value measurement and impairment losses in a way that seems to differ from the objective of IAS 39. This is evident particularly in their accounting for Greek government bonds.  View Article
EFRAG invites to comment on its draft endorsement advice/draft effects study report on the amended version of IAS 19 'Employee Benefits'
EFRAG published an Invitation to Comment relating to the endorsement for use in the EU of the IAS 19 'Employee Benefits' (as amended in 2011). Comments are requested by 29 September 2011.  View Article
IASB Patricia McConnell: “Benefits of the IASB's recent revisions to pension accounting”
IASB member, Patricia McConnell, responds to the revisions of IAS 19 'Employee benefits' (effective from 1 January 2013), which changed the presentation and disclosure of net pension liabilities or assets and net pension cost, but did not change their measurement.   View Article
ACCA: IFRS ‘big bang' approach is preferred by preparers and investors in the US
ACCA strongly believes that IFRS are best positioned to become global standards, and in their view there should be an immediate option for some US issuers to prepare IFRS accounts.  View Article
Summary of FASB and ASBJ biannual meeting
Representatives of the ASBJ and the FASB met on August 18 and 19, 2011, in Tokyo, Japan. The ASBJ supports the efforts by the FASB and the IASB towards developing high-quality global accounting standards, and is making progress with its projects to achieve convergence between Japanese GAAP and IFRS.  View Article
IASB's proposal to exempt investment entities from consolidation requirements
The IASB published proposals to define investment entities as a separate type of entity that would be exempt from the accounting requirements in IFRS 10 'Consolidated Financial Statements'. The exposure draft 'Investment Entities' is open for public comment until 05 January 2012.  View Article
IASB: IFRS Taxonomy interim release for common-practice concepts
The IFRS Foundation, the oversight body of the IASB, completed the first part of its project to address requests by regulators and preparers for extensions to the full IFRS XBRL Taxonomy.   View Article
EFRAG commented on IASB Agenda Consultation 2011
EFRAG published its draft comment letter in response to the IASB Agenda Consultation 2011. Comments are invited by 15 November 2011.  View Article
FASB: Accounting standard to simplify testing goodwill for impairment
The FASB approved a revised accounting standard intended to simplify how an entity tests goodwill for impairment. The amendments will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption will be permitted.  View Article
EFRAG: Final comment letter on the Report of the Trustees' Strategy Review
EFRAG published its final comment letter in response to a request from the IFRS Foundation Trustees to respond to the Report of the Trustees' Strategy Review for public consultation 'IFRSs as the Global Standard: Setting a Strategy for the Foundation's Second Decade' (Strategy Review II).   View Article
IASB: Effect analysis for IFRS 11 'Joint Arrangements'
The IASB published a report that assesses the likely effect of new requirements, although the actual effects will not be known until after the new requirements have been applied.  View Article
EFRAG requests comments on its draft endorsement advice and draft effects study report on the Amendments to IAS 1
EFRAG published an Invitation to Comment relating to the endorsement for use in the EU of the Amendments to IAS 1 'Presentation of Items of Other Comprehensive Income' (the Amendments). Comments are requested by 23 September 2011.  View Article
EFRAG commented on the IASB's ED/2011/02 'Improvements to IFRSs'
EFRAG published its draft comment letter to the IASB on its Exposure Draft 'Improvements to IFRSs'. Comments are invited on the draft comment letter by 30 September 2011.  View Article
IASB: Public consultation on IASB's future work programme
The IASB launched a public consultation to seek broad public input on the strategic direction and overall balance of its future work programme. The consultation period on the future work programme of the IASB closes on 30 November 2011.   View Article
Nicolas Véron: An accounting perspective on financial globalisation
Bruegel Senior Fellow, Nicolas Véron, comments that sometimes it takes a narrow lens to distinguish the true features of big objects. The future of financial globalisation, whatever one's perspective on its dangers or merits, is one of the biggest questions of our times.   View Article
ECIIA response to the EU Green Paper on ‘The EU corporate governance framework’
Generally, the ECIIA response concentrated on questions 11 and 12 which dealt with Risk Management, the major area of internal auditors' expertise. However, the point was made that Internal Audit has a responsibility to evaluate the complete structure within an organisation.  View Article
FRC increases transparency in corporate reporting
The FRC published 'Boards and Risk: A Summary of Discussions with Companies, Investors and Advisers', and 'Effective Company Stewardship: Next Steps'. According to these two new reports, companies should improve the way they report to investors on the key strategic risks facing their businesses.  View Article
FASB: 2012 US GAAP Financial Reporting Taxonomy available for public review and comment
The FASB released the proposed 2012 US GAAP Financial Reporting Taxonomy for public review and comment. The deadline to submit written comments is October 31, 2011.  View Article
EFRAG secretariat reports to EC on input received regarding costs of implementing country-by-country reporting
EFRAG secretariat has collected input from a selection of companies regarding the administrative costs associated with possible supplementary disclosures on a country-by-country basis. This input is summarised in the report on findings that has been forwarded to the European Commission.  View Article
FEE commented on the EC Green Paper on the EU Corporate Governance Framework
FEE commends the EC for its commitment to improve corporate governance for the benefit of all stakeholders, and agrees that the main issues for this initiative are those identified by the EC in this Green Paper, namely boards, shareholders and the functioning of the “comply or explain” approach.  View Article
EuropeanIssuers commented on the Green Paper on the EU Corporate Governance Framework
The Green Paper on the EU Corporate Governance Framework suggests some new requirements. Although companies are not against many of the proposals, EuropeanIssuers would like to see sensible and balanced regulation that will not be costly and burdensome without any benefits.  View Article
FRC commented on the EC Green Paper on the EU Corporate Governance Framework
According to the Financial Reporting Council, the principle of "comply or explain" plays an essential part in promoting best practice in corporate governance.   View Article
FASB's meeting on insurance contracts
The FASB discussed a follow-up analysis on the mechanics of a single margin approach, and the measurement basis for the liability for incurred claims in the post claim period for those contracts meeting the eligibility requirements for using the premium allocation approach.   View Article
ESMA's comment letter on IFRS 8 'Operating Segments'
The ESMA commented on the IFRS Interpretation Committee's tentative agenda on IFRS 8 'Operating Segments – aggregation of operating segments and identification of the chief operating decision-maker' (CODM).   View Article
FEE Briefing Paper on proportionality and ISAs
FEE published the Briefing Paper to answer some common questions about the suitability of ISAs for SME audits and for use by SMPs. It demonstrates that clarified ISAs can be used to audit very small entities in a proportionate way.  View Article

Financial Services Policy

CII Thinkpiece 61: 'Back to Basics - Rethinking Risk Management and Regulation in a Post-Crisis World'
This Chartered Insurance Institute paper seeks to make sense of the crisis in terms of its implications for the management of risk. It reflects on the future for the practice of risk management, and provides some recommendations for financial institutions, and their regulators.   View Article
CII Thinkpiece 62: 'The Role of Professionalism in Securing Consumer Trust and Confidence'
Adam Phillips, Financial Services Consumer Panel chairman, asks why regulators and firms are suddenly taking staff professional standards so seriously, and whether this will make a difference for the end consumer.  View Article
Adam Smith Institute published a paper on the Tobin tax: reason or treason?
As European leaders discuss an EU-wide Tobin tax intended to reduce market volatility and "Robin Hood Tax"-campaigners propose a similar tax, this briefing paper on the Tobin tax assesses these arguments and examines the historical case for and against a Tobin tax.   View Article
FN: Industry unites against 'dishonest' transaction tax
A raft of industry trade associations have rounded on EU policymakers, condemning proposals to move ahead with a highly controversial tax on financial transactions that they warned would hinder Europe's economic recovery, penalise retail investors, and damage businesses.  View Article
AFME: Financial transaction tax would hamper economic growth
A European financial transaction tax would be a brake on economic growth, the Association for Financial Markets in Europe, which represents Europe's wholesale financial markets firms, said today.  View Article
SUERF Study 2011/2: ‘Regulation and Banking after the Crisis’
In this joint study with the Central Bank of Ireland, SUERF focuses on aspects of the post crisis scenarios for the possible future structure of financial systems, business models of banks, risk management implications, and the implications for the future regulatory and supervisory regime.   View Article
IMF published a paper on the administrative feasibility of transaction tax
The paper considers how a financial transactions tax (FTT) could be applied to three broad and partially overlapping categories of financial instruments: (1) exchange-traded instruments; (2) over-the-counter (OTC) instruments; and (3) foreign exchange instruments.   View Article
City of London Research: The value of Europe’s international financial centres to the EU economy
This report explores the clustering of European financial centres and the networking between them as they bring economic benefit both to the UK and the wider EU economy. It is a contribution to an evidence base which will inform the European debate on the regulation of financial services.  View Article
IMF continues push towards enhanced global financial safety net
New research by IMF staff outlines options, including an enhanced global financial safety net, to address crisis risks from the increasingly complex financial and economic links between countries and markets.  View Article
Eurofinas comments on the G20 high level standards on financial consumer protection
Eurofinas takes the view that, for financial services, the need for appropriate consumer protection from potential misleading practices is best served by robust principles for pre-contractual information transparency, increased financial literacy schemes and easy redress.  View Article
Ian Williams: PRIPS - Beyond the 'retailisation' of structured investment products
In December 2010, the Commission undertook a consultation on the next steps in its plans for Packaged Retail Investment Products (PRIPS). It did not contain any draft legislation and the period for consultation closed on 31 January 2011. The responses have been published on the Commission website.  View Article
CPD reform is biggest RDR change, says CISI
The post-2012 regime for continuing professional development (CPD) is the "most transformational" aspect of the Retail Distribution Review (RDR), according to Chartered Institute for Securities & Investment (CISI) CEO Ruth Martin.  View Article
IFAonline: RDR and qualifications - the definitive Q&A
The Personal Finance Society (PFS) has put together a definitive guide designed to answer any questions advisers may still have regarding what they need to do to meet the requirements of the Retail Distribution Review (RDR) from 1 January 2013.   View Article
Citywire: Providers warn legacy commission ban will double RDR cost
The Financial Services Authority's (FSA) hard-line approach on legacy commission could double the cost of the retail distribution review (RDR), according to Zurich.  View Article
MoneyMarketing: Deadline dogma risks wrecking success of RDR
In continuing to stick to its arbitrary deadline the FSA risks undermining the admirable RDR goals for the sake of not losing a bit of face which MoneyMarketing believes is hardly a positive consumer outcome.  View Article
IFAonline: FSA - Platform rebate rules will come in after RDR
The FSA says platform charging rules will not come into force by the RDR deadline of 31 December 2012, as more research is needed before it can make the final decision on whether to ban cash rebates.  View Article
FSA publishes PS11/9: 'Delivering the RDR and other issues for platforms and nominee-related services'
The Financial Services Authority (FSA) has today published rules on platforms regulation. This follows a review of the regulation of platforms in the context of the objectives of the Retail Distribution Review (RDR).  View Article
IFAonline: Sants rules out 'any dilution' of RDR
FSA CEO, Hector Sants, has ruled out 'any dilution of the RDR proposals' in a personal submission to the TSC. He said any watering down of the proposals would result in "an increase in the cost to consumers through continued mis-selling".  View Article

European Council/Parliament

Eurozone special meeting: Time to pull together to defy the crisis
Two key messages emerged from the debate in ECON committee. Firstly, the ECB has remarkably stood up to fill the void left by Member States' inability at tackling the current crisis. Secondly, the economic governance 'six pack' remains the base on which to build long-term economic stability.   View Article
ECON Committee: Debate with Commissioner Olli Rehn
Commissioner Rehn announced that the Commission is committed to presenting a report in the near future on the alternatives and technical issues for the design of eurobonds. On this basis, broad consultation will be required to identify possible common ground and a sensible way forward.  View Article
ECON Committee: Debate with Trichet on the latest developments in the eurozone debt crisis
Trichet stressed that while a special arrangement for Greece has been launched, the inflexible determination of all other euro area governments to honour their own individual sovereign signature fully is key in returning to stable market conditions.  View Article

International/G20

Greece Financing Offer: Statement by the IIF board of directors
The Institute of International Finance Board announced today its Financing Offer for Greece. The programme offers a menu of new instruments to investors in order to mobilise voluntary participation of investors with a target participation rate of 90 per cent.  View Article
Ben Bernanke: The Dodd-Frank Act
FED chairmen Bernanke stressed that among the core objectives of both the Dodd-Frank Act and the global regulatory reform effort are: enhancing regulators' ability to monitor, and strengthening both the prudential oversight and resolvability of systemically important financial institutions (SIFIs).   View Article

Financial Services Month in Brussels - Report

July 2011 Financial Services Month in Brussels
Graham Bishop's Personal Overview - The escalating public debt crisis was meant to be resolved by the July European Council meeting and the Heads of Government went away content that they had dealt with the immediate problem of Greece. But the positive reaction from the financial markets was short-lived.   View Article




© Graham Bishop

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