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17 May 2012

This week in "Brussels"
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Articles from 10 May 2012 - 17 May 2012

Banking

Danish Presidency: New Capital Requirements Directive strengthens rules for banks
With the ECOFIN agreement to strengthen regulation of the financial sector with a new Capital Requirements Directive, the EU is taking the lead ahead of other large global economies in complying with the G20 objectives on the implementation of the Basel standards for capital and liquidity.  View Article
ECOFIN: Consensus on tougher and tighter regulation of banks in the EU
At today's ECOFIN, EU finance and economy ministers reached agreement on the Danish Presidency's compromise proposal on new EU rules on capital requirements for banks. Now the Council can begin negotiations with the European Parliament for a final agreement.  View Article
ECON Committee: Bank capital rules - Reform to boost risk resilience and lending to the real economy
Bank capital requirements must be strengthened to make banks more risk-resilient, and the risk weighting of loans to small firms must be reduced to facilitate lending to the real economy, said ECON MEPs in a vote on Monday. Bankers' bonuses must not exceed their fixed pay, they added.  View Article
European Council: Bank capital rules - General approach agreed ahead of talks with Parliament
The Council today unanimously agreed a general approach on two proposals, the so-called "CRD IV" package, amending the EU's rules on capital requirements for banks and investment firms, with a view to negotiations with the European Parliament.  View Article
Statement by Commissioner Barnier following the ECOFIN Council: CRD IV
Barnier said that now more than ever, unity on bank regulation was needed. Weak bank capitalisation, weak and poorly harmonised liquidity rules, and fragmented and uncoordinated supervision were all contributing factors to the financial crisis.  View Article
Comments by Sharon Bowles on the EP vote on Capital Requirements Regulation
"The EP has voted through an ambitious and innovative text today. On the key concern of maximum vs minimum harmonisation, there is sufficient flexibility within an EU framework. This will allow countries with a very large debt-to-GDP ratio to take the necessary action to protect themselves."  View Article
Danish Presidency strives for agreement on new EU rules on capital requirements for banks in the EU
The aim of the new rules is to make the European financial sector more resilient in light of the experiences from the financial crisis.  View Article
S&D: New rules for banking sector go in the right direction, say Euro MPs
S&D Euro MPs today backed new rules on capital requirements - the so-called CRD IV and CRR packages - for the 8,200 banks and investment firms in the EU.   View Article
EPP/Karas: Basel III/CRD IV - Stabilising banks and financing growth
"The outcome of the vote is the unequivocal message of the Parliament to the Council that all political parties are determined to go ahead with stabilising banks and financing growth", stressed Othmar Karas after a unanimous vote in Parliament's committee in charge of financial market regulation.  View Article
Risk.net: Cyprus Presidency fears add urgency to CRD IV talks
ECOFIN has voted through the new regulatory regime - and final amendments appear to give the UK extra freedom. But work remains before the Danish Presidency ends on July 1. (Includes quotes from Graham Bishop.)   View Article
Bruegel review: The Capital Requirements Directive (CRD IV)
Jérémie Cohen-Setton, Dana Andreicut and Shahin Vallée review recent commentaries on CRD IV, looking at the main issues, its importance and limitations, and the maximum harmonisation approach.  View Article
CEPS: EU version of Basel III runs into trouble
A new Commentary by Karel Lannoo finds that the European Commission's proposals for ensuring prudential supervision of the banking sector in the EU leave much to be desired.   View Article
EBF: Banks call for more European approach
The Board of the EBF advocated the need for a Single Rulebook in European regulation when they met with Danish Minister of Economic Affairs and the Interior and current President of the Economic and Financial Affairs Council, Margrethe Vestager, on the occasion of the EBF Board meeting.  View Article
Opinion of the European Central Bank - The ‘Pericles 2020’ programme
The ECB published its opinion on a proposal for a regulation of the European Parliament and of the Council establishing an exchange, assistance and training programme for the protection of the euro against counterfeiting (the 'Pericles 2020' programme).  View Article
EBA: Joint Consultation Paper / Response to the EC’s Call for Advice on the Fundamental Review of the FICOD
The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA) is launching a three-month public consultation on the proposed response to the call for technical advice from the European Commission on the fundamental review of the Financial Conglomerates Directive ("the FICOD").  View Article
EPC: Get Ready for SEPA by February 2014 – Impact of the SEPA Regulation on Payment Service Users
Part V of the EPC SEPA series clarifies that the 'Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro' affects not only payment service providers (PSPs), but also users (PSUs). This blog focuses on PSUs which are not consumers.  View Article
BBA: An authoritative look at the future of banking
Angela Knight writes that in the sometimes heated debate about the future of the banking system, there are some things on which everyone agrees: principally a reform programme is required which also recognises the need to restore the UK's financial stability and promote its economic recovery.   View Article
BBA Response to the Queen's Speech
The British Bankers' Association looks forward to an open and honest debate about banking reform, building on the measures set out by the Chancellor last summer and the proposals of the Vickers Commission.  View Article
Bank of Ireland Governor, Patrick Honohan: The return of the surprise in central banking
In his speech at the OMFIF Golden Series on World Money, Mr Honohan said that some of the great pivotal moments in the history of central banking were about shock tactics, the timing, their potential impact and the communications around them. He presented three key lessons to be kept in mind.  View Article
Bank of England/Fisher: How the Old Lady will make banks safer
In his article, Fisher writes that spotting and taking actions to mitigate risk in the financial system will be a tough ask. But no one who has lived through this crisis would argue it is not worth the effort.  View Article
EIB and Banco Popular sign SME financing agreement
The European Investment Bank (EIB) has granted a €200 million loan to Spain's Banco Popular for financing the investment projects of small and medium-sized businesses, mainly in the industry and service sectors.  View Article
State aid: Commission temporarily approves aid for the resolution of Greek T Bank
The EC has approved, for a period of six months, around €680 million of state support granted by the Hellenic Deposit and Investment Guarantee Fund (HDIGF) to facilitate the acquisition of the economic activities of the Greek T Bank by Hellenic Postbank in the context of T Bank's resolution.   View Article
State aid: Commission approves ING's restructuring plan from 2009 anew and opens an in-depth investigation on later amendments to the plan
The Commission has approved ING's restructuring aid as compatible with the internal market. The approval is based on a restructuring plan submitted in 2009.   View Article
WSBI: Marrakech Declaration - An account for everyone
On the occasion of the 2012 World Saving Banks Institute Congress, WSBI members adopted the Declaration, "An Account for Everyone", re-affirming their strong support to financial inclusion, a commitment which they maintain despite the difficult economic and market context for the financial sector.  View Article

Securities

EBA, EIOPA and ESMA consult on Commission’s Review of the Financial Conglomerates Directive
The European Supervisory Authorities, EBA, ESMA and EIOPA, published a consultation paper on the Financial Conglomerates Directive (FICOD).   View Article
ECBC Position Paper on MiFIR
The ECBC raised three specific concerns with the European Commission's Proposal for a Regulation on Markets in Financial Instruments (MiFIR) and the related draft report published by Mr Markus Ferber (Ferber Report).  View Article
ESMA/Verena Ross: Shaping the future of Europe’s financial markets
Verena Ross, Executive Director of ESMA, delivered a speech on "Shaping the future of Europe's financial markets" to the Centre Forum in London, covering i.a. ESMA's role in the new EU framework, the development of a single rulebook, and key priorities for 2012.  View Article
FT: Funds dash to clearing houses for swaps
Big money managers are rushing towards third-party clearing of swaps trades before a possible downgrade of their bank trading partners' credit ratings.  View Article
Consob: Regulatory simplification - amendments to markets and issuers' regulations
The amendments to the Consob regulations affect the markets and issuers' regulations with three objectives: to eliminate provisions not envisaged by EU legislation; to rationalise the requirements of listed companies; and to preserve investor protection.  View Article
IMF Working Paper: Appraising credit ratings - does the CAP fit better than the ROC?
In this IMF study, the CAP and the ROC methods are compared, using as an illustration the ability of the OECD's country risk ratings to predict whether a country will have a programme with the IMF (an indicator of financial distress).  View Article
IOSCO: Ten years of enhancing cross-border enforcement cooperation
The Annual Conference of IOSCO marks the 10th anniversary of the Multinational Memorandum of Understanding, the instrument used by securities regulators to help ensure effective global regulation, and preserve and strengthen securities markets around the globe.  View Article
IOSCO prepares for the regulatory and financial challenges ahead
IOSCO opens its Annual Conference focusing on the themes of a new financial architecture for the post-crisis era, financial market infrastructures and market integrity, capital markets development in emerging markets, and regulation of commodity futures and financial derivatives.  View Article
Canadian securities regulators strengthen over-the-counter rules
The OTC rule addresses the damage to the reputation of Canada's capital markets by market participants with strong connections to Canadian jurisdictions who engage in abusive activities through OTC markets in the US.  View Article
Bloomberg: Dodd-Frank swaps legislation delayed
US House lawmakers, acting after JPMorgan Chase & Co announced $2 billion in derivatives trading losses, delayed a committee vote on legislation easing Dodd-Frank Act swaps rules.  View Article

Insurance

EIOPA/Gabriel Bernardino: EIOPA, Solvency II and the loss adjusting profession
In his speech, Bernadino said that the Solvency II regime is increasingly being perceived as more than a "check the box" regulatory exercise that determines capital requirements. It requires the EU insurance industry to analyse its risks critically, and assess the true costs attached to them.  View Article
Risk.net: Political chess - Debate over form of level 2 implementing measures hots up
The European Parliament is proposing changing many delegated acts into regulatory standards, potentially moving considerable power to EIOPA - and prompting the Commission to take legal advice. Thomas Whittaker examines the implications.  View Article
FT: Insurer urges end to regulation moans
European insurers should stop complaining about a looming regulatory shake-up of the sector because they have had plenty of time to prepare for it. Philip Broadley said he "can't understand" why insurers continue to warn about the impact of Solvency II, due to take effect at the start of 2014.  View Article
Reuters: UK's Cameron backs insurers on EU capital rules
British Prime Minister, David Cameron, said on Friday that his government would fight to make sure Europe's proposed Solvency II capital rules for the insurance industry did not put insurers in Britain at a disadvantage.  View Article
FN: Regulatory crackdown hurts company securitisation
Corporate securitisation sounds like the ideal solution for companies who want to reduce their reliance on bank lending and diversify their financing strategy. A company can securitise its future earnings to get its hands on cash today.  View Article
INN: Europe’s Solvency II set to impact American insurers with offices abroad
The Towers Watson's European Actuarial Directors survey found that 58 per cent see the next two to three years as extremely difficult, citing challenges such as the rising cost of capital and the advent of Solvency II.  View Article
FT: Pru chief in line to be ABI chairman
Tidjane Thiam, chief executive of Prudential, has emerged as a leading candidate to replace his counterpart at Legal & General as chairman of the Association of British Insurers.   View Article

Asset Management

Hedgeweek: Revised regulation targets asset management quality
As the Alternative Investment Fund Managers' Directive is to be implemented in EU Member States by July next year, a revision of the Swiss regulatory framework, the Collective Investment Schemes Act (CISA), is currently being debated and due to come into effect on 1 January, 2013.  View Article
Hedgeweek: The keys to successful hedge fund investing
Many investors have been disappointed with their hedge fund returns over the past couple of years. This is justified to the extent that many hedge funds and funds of hedge funds have not achieved the targets promised to their investors.  View Article
FN: Pensions industry fears being softened up for Solvency II
Was the UK Pensions Regulator's recent statement on funding guidance either a harsh rejection of any help for schemes to deal with the effects of quantitative easing, or does its reference to additional flexibility for employers in financial trouble represent positive news?  View Article
IPE: Restructurings could have major impact on pension funds
According to Punter Southall Financial, restructurings at companies trying to avert insolvency could have a major impact on UK pension schemes.  View Article
IPE: Solvency II designed for "financial repression"
Asoka Wöhrmann, CIO at Deutsche Bank investment division DWS, has described regulatory developments such as the US's 'Volcker Rule' and Europe's Solvency II – the insurance industry rules that form the template for ongoing EU pensions regulation – as "designed to create financial repression".  View Article
IPE: Dutch pension funds' recovery plans could fall short of recovery
Mercer has warned that recovery plans at Dutch pension funds could come up short if swap rates and equity markets fail to recover sufficiently.  View Article
IPE: The IORP Directive - Voting with their feet
Two factors have prompted two French pension funds to seek a jurisdiction outside France. One is the onset of Solvency II, and the other is the lack of an IORP-compliant regime in France for the provision of second-pillar pensions that would help them avoid the structures of Solvency II.  View Article
IPE: Solvency II look-through approach a threat to fund managers
State Street Global Services has warned that Solvency II could force asset managers to disclose their investment strategies "inadvertently" if Brussels adopts a 'look-through' approach for pooled vehicles.   View Article
NAPF delighted Queen's Speech promises state pension reform
Joanne Segars, chief executive of the National Association of Pension Funds, said: "A new system will take millions out of means-tested benefits, and will encourage people to take control of their old age by saving towards it".  View Article

Corporate Governance/Accounting

ALDE: Member States must come clean on use of taxpayers' money
After six years of political pressure by the Group of Liberals and Democrats, ALDE reports that the European Commission today finally showed some willingness towards ensuring more transparency and better accountability of the management of EU money by Member States.  View Article
FEE commented on the PCAOB proposed auditing standard on related parties
FEE published its comment letter on the PCAOB Rulemaking Docket Matter No 038 - Proposed Auditing Standard on Related Parties - Proposed Amendments to Certain PCAOB Auditing Standards regarding Significant Unusual Transactions and Other Proposed Amendments to PCAOB Auditing Standards.  View Article
FEE commented to the European Commission on the Future of European Company Law
FEE published its comment letter on the European Commission Consultation on the Future of European Company Law. FEE favours a holistic approach to the fundamental review, and looks forward to a sustainable future company law framework that is fit for purpose for European companies.  View Article

Financial Services Policy

ECON Committee: Fiscal policy - MEPs adopt position amid division on best route to take
The European Commission should have more control over fiscal policy in Member States, but not the free rein it asked for, says the ECON Committee, stating a position on the economic governance "two pack". This increased power must be democratically controlled and serve to spur economic growth.  View Article
ALDE/Verhofstadt: Only a structural solution to reduce eurozone debt will end the crisis of confidence
Verhofstadt underscored the need to reconsider a structural solution involving further economic integration and a pooling of debt.  View Article
CEPS: The euro crisis - Implications for the internal market and harmonisation of corporate taxes
This Policy Brief by H Onno Ruding looks at the ways in which the euro crisis has impacted the successful functioning of the internal market of the EU, and the state of play with respect to the creation of a Common Consolidated Corporate Tax Base in corporate taxation.  View Article
SIFMA statement regarding the orderly resolution of systemically important financial institutions
SIFMA continues to believe that the establishment of an orderly resolution authority (OLA) is critically important for managing systemic risk and restoring faith and confidence in our financial system.  View Article
FN: Carmignac reduces euro exposure to zero [RDR]
Speaking at a launch event for the new London office of the French multi-asset fund manager, Carmignac Gestion, Edouard Carmignac said that the RDR had made it an auspicious time for firms such as his to enter the UK market.  View Article
IFA Online: Watch your back, Europe's regulators are set to strike [RDR]
Francesca Bell, consultant at Bovill, looks at why the Retail Distribution Review is not the only piece of legislation having an impact on the UK retail financial services market. Will it be MiFID II or RDR that prevails?  View Article

International/G20

Bruegel/Pisani-Ferry: G20 - Decreasing returns
Pisani-Ferry comments that it is certainly too early to claim that the G20 has failed, but early enough to wonder whether it is on track towards lasting success.  View Article
IIF: A major step for building Istanbul as a financial centre
At a recent conference, senior figures in banking and finance shared experiences and views on achieving the goal of promoting the Turkish city's place in the global financial market.  View Article

Graham Bishop’s Articles and Speeches

Graham Bishop's Blog: May 15 ECOFIN and the banking regulation crisis with the UK
Can Houdini Osborne escape or will he "look like an idiot"? Even if he escapes, is it just an interlude?   View Article




© Graham Bishop

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