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14 June 2012

This week in "Brussels"
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Financial Services Month in Brussels - Report Graham Bishop’s Articles and Speeches About this email

Articles from 07 June 2012 - 14 June 2012

Banking

EBF: European banks welcome EU bank recovery and resolution proposal
The European Banking Federation (EBF) welcomes the Bank Recovery and Resolution Directive proposed by the European Commission, as it minimises the systemic and fiscal consequences of bank failures, and eliminates moral hazard by making bank failures an orderly process.  View Article
Association of German Banks welcomes EU legislative proposal for new crisis management measure
"It is good that the European Commission wants to create an EU-wide legal framework for recovery and resolution of distressed financial institutions. This is the only way to avert the threat to financial market stability resulting from such distress", said Michael Kemmer.  View Article
BBA: Euro crisis won’t wait for Crisis Management Directive
BBA chief executive, Angela Knight, said that it was vital that the eurozone used the much talked about bailout funds urgently to stabilise eurozone countries and, where necessary, their banking sectors.  View Article
EBF response to the European Commission consultation on bank accounts
The European Banking Federation responded yesterday to the European Commission consultation on bank accounts, strongly encouraging the Commission to give initiatives taken by some Member States at a national level a chance to succeed before further analysis is made.  View Article
BBA/Angela Knight: Banking reform white paper needs to bring certainty in key areas
The imminent publication of the banking reform white paper needs to provide some certainty on the scale and duration of banking industry changes, together with a clear recognition of the international measures which may also be imposed on banks, Angela Knight said at a conference today.  View Article
FT: Barroso pushes EU banking union
In an interview with the FT, President Barroso suggested that a European banking union – including a single EU supervisor, an EU-wide deposit guarantee scheme and a resolution fund financed through bank levies – could be achieved by next year without changing the EU Treaties.  View Article
Bundesbank/Dombret: "The recent proposals of a so-called banking union appear to be premature"
Dombret stressed that a pan-EMU deposit-guarantee scheme and a debt resolution fund would require "a genuine, democratically legitimated fiscal union" and a new treaty.  View Article
Sharon Bowles: "EU banking union is a good idea"
Ms Bowles remarked that banking supervision has to take account of what monetary policy is, so to have the ECB involved in the supervision of eurozone banks, and therefore taking account of eurozone monetary policy in that supervision, is a good idea.  View Article
CEPS: Banking union in three steps
Karel Lannoo exhorts the EU not to lose further precious time in creating a fully functional bank union. In his opinion, this would entail three main steps: creating a single supervisory authority, a common deposit protection, and a harmonised bank resolution and liquidation system.  View Article
CEPS: Banking union in the eurozone and the European Union
In this new CEPS Commentary, Jacopo Carmassi, Carmine Di Noia and Stefano Micossi present a rationale and detailed outline for the creation of a banking union in Europe.   View Article
Bruegel/Wolff: A banking union for growth
One of the important reasons for low growth in Europe is the uncertainly about the euro's future, and that is intrinsically linked with the idea of a banking union, writes Wolff. He discusses the rationale for a banking union, what it would consist of, and what would it imply.  View Article
Bruegel/Bijlsma: A banking union is no panacea
The claim that the eurozone needs a banking union is by now almost universal, comments Bijlsma. But will it be sufficient; in other words, will a banking union create a stable monetary union? There are at least three reasons to worry, he says.  View Article
S&D: Establishing the basis for a more efficient, stable and fair mortgage market
"The new rules will correct many of the mistakes that led to the current crisis; it is more exigent as regards the assessment and management of risks and fairer relationships between the parties - which is especially important at times of crisis", said Mr Sanchez Presedo.  View Article
ALDE: A mortgage must be a flexible and transparent contract, tailor-made for consumers
ALDE spokesman, Philippe De Backer, said that the reforms introduced reflected the changes the pattern of home ownership in Europe had been forced to go through due to the contribution the mortgage market had played in the crisis.  View Article
BIS/Caruana: Progress and challenges in financial reform
The current global economic uncertainty makes it all the more important to follow through on strengthening financial reform. BIS General Manager, Jaime Caruana, outlined the key elements of the global financial reform agenda.  View Article
Basel Committee reports to G20 leaders on global implementation of its standards
The Basel Committee on Banking Supervision has published its report to the G20 Leaders on the implementation of its banking standards across member countries. The report will be considered at the G20 Leaders' Summit in Los Cabos, Mexico, on 18-19 June.  View Article
FT: FDIC officials concerned about Basel strength
Two top officials at the US Federal Deposit Insurance Corp have questioned the strength of new banking rules to be implemented as part of the Basel III accords.  View Article
Consultation paper on Draft Implementing Technical Standards on supervisory reporting requirements for liquidity coverage and stable funding
The European Banking Authority launched a consultation on Draft Implementing Technical Standards on supervisory reporting requirements for liquidity coverage and stable funding. These ITS intend to specify the main features of prudential reporting to be applied by financial institutions in Europe.  View Article
EBA: Consultation paper on RTS on the concept of Gain on Sale associated with future margin income in a securitisation context
These Regulatory Technical Standards (RTS) will be part of the single rulebook aimed at enhancing regulatory harmonisation in Europe. The consultation runs until 12 August, 2012. A public hearing will take place on 28 June.  View Article
EBA: Consultation paper on Draft Implementing Technical Standards on supervisory reporting requirements for leverage ratio
The European Banking Authority launched a consultation on Draft Implementing Technical Standards (ITS) on Supervisory reporting requirements for leverage ratio. These ITS intend to specify the main features of prudential reporting to be applied by financial institutions in Europe.   View Article
EBA: Consultation paper on Draft Implementing Technical Standards on Disclosure for Own Funds
These draft ITS focus on the disclosure requirements to be met by institutions. Establishing appropriate disclosure requirements increases the transparency on regulatory capital held by European institutions, and ultimately contributes to strengthening its quality and quantity.   View Article
BBA appoints Anthony Browne as Chief Executive
The British Bankers' Association has appointed Anthony Browne as its next chief executive, to succeed Angela Knight who is stepping down to join Energy UK. Mr Browne will take up his appointment on 1 September, 2012.   View Article
VoxEU: Room for manoeuvre - The deleveraging story of eurozone banks since 2008
Europe's heavily overleveraged banks are now under European Banking Authority orders to raise their capital-asset ratios rapidly. Many fear that this will trigger a contractionary shrinking of assets rather than prudential increases in capital. This column presents new evidence that these fears are unfounded.  View Article

Securities

ESMA/Verena Ross: ESMA’s role in European and international regulatory cooperation
ESMA Executive Director, Verena Ross, focused in her speech on the EU regulatory framework and the role of ESMA, as well as on the priorities and challenges for 2012 and beyond. She also discussed the need for international convergence and cooperation.  View Article
ECMI: Maijoor reviews independence in audit, ratings and advice
Speaking at ECMI-CEPS, ESMA Chairman Steven Maijoor argued that market discipline alone would fail to ensure the independence of service providers in financial markets, given the complexity and insufficient transparency.  View Article
FN: CCPs vulnerable to sovereign bonds bust
Despite being hailed by regulators as the panacea to the ills of the over-the-counter derivatives markets, central counterparty clearing is under fire from a group of influential banking experts.  View Article
IPE: Swap rules could increase pension fund costs
The differences between bilateral and centrally cleared swaps under the new EMIR regulation could increase costs for pension funds.  View Article
Publication of the 2011 Annual Report of the ACP-AMF Joint Committee
On Friday 25 May, the 2011 Annual Report of the Joint Committee of the Autorité de Contrôle Prudentiel (ACP) and the Autorité des Marchés Financiers (AMF) was presented at a press conference.  View Article
Spain: IOSCO Objectives and Principles of Securities Regulation - Detailed Assessment Implementation
The new committee (the Grupo de Estabilidad Financiera), together with biweekly meetings by a management committee and annual strategic reviews, all allow the CNMV to contribute to the identification and monitoring of emerging and systemic risk, and the review of the perimeter of regulation.  View Article
SEC issues roadmap on phase-in of derivatives regulation
The Securities and Exchange Commission issued a policy statement describing the order in which it expects new rules regulating the derivatives market would take effect. The statement covers final rules to be adopted by the SEC under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.  View Article

Insurance

EIOPA publishes its Financial Stability Report June 2012
The European Insurance and Occupational Pensions Authority (EIOPA) published today its biannual report on the financial stability for the insurance and institutions for occupational retirement provision (IORPs) sectors in the European Economic Area (EEA).  View Article
FTAdviser: Insurers brace for volatility ahead of Solvency II regime
The European Solvency II Directive will present significant challenges for insurers, for which the industry is still not prepared, Axa's Jean-Christophe Menioux has warned.  View Article
EDHEC-Risk Institute makes Solvency II benchmarks available online to European insurance companies
The EDHEC-Risk Institute today announces the launch of its new Solvency II Benchmarks, constructed in cooperation with the leading multi-asset solutions manager, Russell Investments.  View Article
FT: Insurers shift from guarantee business
European life insurers are retreating from their traditional business of providing products that offer guaranteed returns to policyholders, according to data from a leading regulator.  View Article
CRE: Reputation, claims and supply chain risks biggest concerns for Airmic members
Damage to reputation, claims payment and supply chain are the key concerns of risk managers, according to Airmic's annual survey of its members.  View Article
Lloyd's: Germany 'must open up' to global insurance market
The eurozone crisis and the export-led boom in German industry mean that Germany's insurance buyers must look to markets outside their own borders for insurance solutions, according to Jan Blumenthal, Lloyd's general representative for Germany.  View Article
State Aid: Commission approves Finnish short-term export credit insurance scheme
The EC has found a Finnish short-term export credit insurance scheme to be in line with EU state aid rules, as it is limited to insurance cover that is currently not available on the private market, while the rates charged remain in line with the pricing of similar risks by private players.   View Article
Insurance Insight: Insurance industry struggles to respond to new technological threats
Leading organisations across Europe are failing to integrate cyber threats fully into their risk management strategies, despite mounting concerns about cyber risk. According to research, risk managers are considerably more concerned about the perceived threat of cyber risks to their organisations.  View Article
WSJ: Credit insurers call for clarity on euro crisis
Global credit insurers, which promote smooth cross-border trade by insuring exports and imports, said on Friday that they urgently needed clarity on what measures eurozone politicians will take to solve the problems of debt-stricken nations and their banks.  View Article
Risk.net: Australia weighs up illiquidity premium for insurer liabilities
Australia is forging ahead of the rest of Asia in introducing risk-based capital regulation for its insurance industry with the recognition of an illiquidity premium. Could this in turn lead to a solution to Australian banks' Basel III liquidity issues?  View Article

Asset Management

ESMA makes available lists of registers for investment firms, tied agents and UCITS management companies
ESMA has made the lists for investment firms, tied agents and UCITS management companies available today, according to its obligations under the Omnibus Directive.  View Article
ALFI recommendation on the risk management system for SIFs
Pending further clarification to be provided by the CSSF on the regulation in question, the document provides proposals on how market participants may establish and document an adequate risk management system for Special Investment Funds (SIFs).  View Article
NAPF: Financial reporting rules could burden large pension funds
NAPF warned that proposals for new financial reporting rules could impose significant costs on pension funds by treating them like banks and insurers.  View Article
FN: Pension funds resist compliance services for unnecessary rules
This article claims it is no surprise that European pension funds are failing to embrace proposals that threaten to drag them further into deficit by demanding they set aside larger capital buffers for investments in risky asset classes.  View Article
OECD says raising retirement ages and expanding private pension coverage essential
According to a new OECD report, governments will need to raise retirement ages gradually to address increasing life expectancy, in order to ensure that their national pension systems are both affordable and adequate.  View Article

Corporate Governance/Accounting

EFRAG's endorsement advice letter to the EC about adoption of amendments to IFRS 1
EFRAG has completed its due process regarding Government Loans (Amendments to IFRS 1), and has submitted its Endorsement Advice Letter and Effects Study Report to the European Commission. EFRAG supports Amendments to IFRS 1, and has concluded that they meet the technical requirements of endorsement.  View Article
EFRAG: Draft comment letter on the IASB's ED/2012/1 Annual Improvements to IFRSs 2010-2012 Cycle
EFRAG published its draft comment letter to the IASB on its Exposure Draft Annual Improvements to IFRSs 2010-2012 Cycle ("the ED"). EFRAG agrees with most proposals in the ED but it is concerned about the amendments to IFRS 3 and IAS 12. Comments are invited on the letter by 22 August, 2012.  View Article
EFRAG: Draft comment letter on the IFRS Interpretation Committee's tentative rejection notice - Greek government bonds
EFRAG published its draft comment letter on the IFRS Interpretations Committee's tentative rejection notice in relation to the restructuring of Greek government bonds. Comments on the letter are invited by 12 July, 2012.  View Article
FRC: Audit Quality Inspections annual report 2011/12
The Professional Oversight Board, part of the FRC, published its Annual Report on Audit Quality Inspections undertaken in 2011/12. It describes the more important findings from inspections, and in particular includes key messages that should be helpful to all audit firms and audit committees.  View Article
FRC: Sharman panel publishes final report on going concern and liquidity risks
The Sharman Panel of Inquiry, established at the invitation of the FRC to consider Going Concern and Liquidity Risks: Lessons for companies and auditors, published its final report and recommendations.   View Article
FRC: Actuarial standards for pension incentive exercises
The FRC's Board for Actuarial Standards (BAS) published a consultation paper which proposes to bring actuarial work on pension incentive exercises into the scope of the FRC's technical actuarial standards (TASs). Comments should reach the FRC by 7 September, 2012.   View Article
IFAC: Global sustainability and growth recommendations for the G20 leaders’ summit
The IFAC presents recommendations for consideration at the G20 Leaders' Summit on June 18-19 2012 in Mexico. These recommendations focus on actions aimed at promoting global sustainability and growth, and are directed towards several of the stated priorities of the Mexican presidency of the G20.  View Article
IFAC: 2011 IESBA Annual Report
The International Ethics Standards Board for Accountants released its 2011 Annual Report, 'Ethics for the Global Accounting Profession—Building on the Groundwork'. It describes the IESBA's commitment to developing high-quality international ethics standards for the global accountancy profession.  View Article
MoneyWeek: Western government reporting and indebtedness
Ian Ball, IFAC CEO, spoke with MoneyWeek on cash versus accrual accounting in government reporting, and the implications of a cash-based reporting model in Europe.  View Article
IASB and FASB: Agreement on lease accounting approach
The IASB and the FASB agreed on an approach for accounting for lease expenses, as part of a project to revise lease accounting in IFRSs and the US GAAP.   View Article
Ian Williams: Emerging EU Corporate Responsibility infrastructure - beyond 'shareholder spring'
There are signs that EU policies on corporate governance and the current voluntary or privatised approach to "regulating" corporate social responsibility are beginning to overlap in interesting ways, writes Williams.   View Article

Financial Services Policy

EP Plenary: Economic governance with a wider vision
The next round of economic governance legislation must be geared more towards growth, and new European Commission powers to vet eurozone countries' budgets should be better democratically controlled, MEPs said on Wednesday when adopting Parliament's position on the so-called "two pack".   View Article
ECON Committee: Economic governance "two pack" - Q&A
With the ink hardly dry on the economic governance "six pack", more legislation was proposed in an attempt to stem the tide of eurozone governance troubles. The texts have now been scrutinised and amended by Parliament's Economic and Monetary Affairs Committee.  View Article
EPP: 2-pack - Clear majority for strengthening economic and budgetary coordination in the eurozone
The two regulations on which the European Parliament voted today complement the six texts from the 'Economic Governance Package' (6-pack) which were adopted last September.  View Article
Commissioner Barnier: Financial regulation, fiscal consolidation, governance, growth - Europe is taking up its challenges
Barnier said that in order for European financial institutions to be strong and successful in the face of global competition, it is necessary to make finance serve society and the real economy.  View Article
ECON Committee: Austerity versus growth - a stark choice or a false dilemma?
As the political climate in Europe changes, many have questioned the wisdom of pushing forward with austerity at the expense of growth. Yet there is broad agreement that public finances have to be consolidated.  View Article
Juncker: Fiscal union must include common tax base
Plans for greater EU integration, due to be sketched out at the leaders' summit in three weeks, should include changes to tax policy including a common corporate tax base, Luxembourg prime minister Jean-Claude Juncker said.  View Article
UK Treasury Committee publishes report on the Financial Services Bill
With the Financial Services Bill about to undergo detailed scrutiny in the House of Lords, the Treasury Select Committee published a further report setting out its main outstanding concerns and some proposed remedies.  View Article
Professional services: Modernisation of the regulatory framework [PQD]
In a communication on the implementation of the Services Directive, the European Commission urged the Parliament and the Council to adopt the proposal for a modernised Professional Qualifications Directive before the end of 2012.  View Article
FSA publishes finalised guidance on the RDR rules for independent and restricted advice
The regulator has issued its finalised guidance on the Retail Distribution Review rules for independent and restricted advice, following on from the guidance consultation issued in February.  View Article

Financial Stability - Policy Analysis

ECB Financial Stability Review June 2012
According to the Review, developments in recent weeks have continued to illustrate the persistent negative interplay of key risks, and underscore the need for concerted and comprehensive decisions of Member States to put an end to the turbulence that has been affecting the euro area for over two years.  View Article

International/G20

Ignazio Angeloni: The G20 should rise to the challenge (but probably won’t)
The G20 leaders convening in Los Cabos on June 18 and 19 would have a perfectly timed opportunity to do three important things falling within the G20 remit, but unfortunately none of them will happen, comments Angeloni.  View Article

Financial Services Month in Brussels - Report

May 2012 - Financial Services Month in Brussels
Graham Bishop's personal overview of financial services regulation throughout the month of May. On the last day of May, the European Commission published more than 1500 pages of analysis and recommendation that marked the full emergence of a political union of the euro area.  View Article

Graham Bishop’s Articles and Speeches

Graham Bishop: A timeline for sequencing the grand euro strategy – No taboos
EU leaders are often criticised for lacking a clear strategy to deal with the euro crisis. However, very powerful economic governance polices are already enacted, or are under negotiation.   View Article




© Graham Bishop

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