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31 January 2013

This week in "Brussels"
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Articles from 24 January 2013 - 31 January 2013

Banking

Decisions taken by the Governing Council of the ECB (in addition to decisions setting interest rates)
The ECB provided an overview of decisions made during January 2013 in the following areas: market operations, payment systems and market infrastructure, financial stability and supervision, advice on legislation, and corporate governance.  View Article
Eurosystem position on Commission's consultation on bank structural reform
This document provides the Eurosystem's reply to the Commission's Consultation on the "Liikanen Report". The Eurosystem is of the view that an impact assessment needs to be carried out as a matter of priority in order to gauge the possible impact of the proposals in the EU.  View Article
FT: Brussels softens line on bank ringfences
The European commissioner in charge of regulatory reform of the region's banks has signalled a retreat from plans to force lenders to build barriers around their securities trading operations, as policy-makers focus on stimulating growth.  View Article
FT: Paris pressure to get tough on banks
France's Socialist government is coming under domestic pressure to toughen up its flagship banking reform bill which falls short of EU-wide proposals to ringfence banks' trading activities.  View Article
FT: Germany rejects whole-bank ringfencing
Germany has become the second large eurozone nation to reject the idea of forcing banks to ringfence their entire trading activities, following France in setting out plans for a limited curb on some riskier business lines.  View Article
Andrew Tyrie: Electrify the banking ringfence
Banks will test the limits unless they are incentivised not to, writes Tyrie in this FT opinion piece.  View Article
Vienna 2 Initiative Steering Committee discusses deleveraging, asset quality and implications of banking union plans
The Steering Committee announced i.a. the creation of a working group on the European Banking Union.  View Article
ECB/Constâncio: Establishing the Single Supervisory Mechanism
Constâncio focused his speech on the establishment of the Single Supervisory Mechanism (SSM), following the landmark agreement reached by the ECOFIN Council on 13 December.  View Article
EBA: Public hearing on the ESMA/EBA consultation paper on Principles for Benchmarks-Setting Processes in the EU
To facilitate the discussion, ESMA and the EBA have outlined a series of questions on which they are particularly interested in receiving input from interested stakeholders. The hearing is scheduled for 13 February.  View Article
Reuters: Pall of bank legacy assets hangs over eurozone
Banks' "legacy assets" sound innocent enough but in the context of Europe's debt crisis, and particularly for Ireland and Spain, the question of how to deal with existing bad debts has not been resolved.  View Article
FT: Banks urged to reveal solvency fears
Struggling banks should not use vague promises of state aid to keep investors in the dark about their fragility, according to new UK guidance aimed at avoiding a repeat of the confusion experienced during the financial crisis.  View Article
EPC: There is only Plan A - Get ready for SEPA in the next 12 months in the euro area
After more than a decade of the Single Euro Payments Area (SEPA) in the making, this most ambitious EU integration project in the area of electronic euro payments will become a reality in the next 12 months.   View Article
Peterson Institute/Funk Kirkegaard: The ECB - The last central bank standing?
The ECB seems destined to stand apart from advanced economy central banks and sit on its hands this year, a reflection of financial market normalisation, if not monetary tightening.  View Article
FT: US regulators warn banks on living wills
US regulators have warned banks not to assume that countries will work together to avoid the catastrophic failure of a financial group. The alert to the world's biggest international financial institutions followed growing concerns about the progress of global regulatory reform efforts.  View Article

Securities

AFME: MiFID II and fixed income transparency
This note summarises the views and concerns of participants in the fixed income markets regarding the MiFID II requirements, which are currently being discussed in the Council.  View Article
FSA statement on Basel III rules on capital requirements for exposures to CCPs
The FSA's supervision is currently focused on preparing domestic CCPs to meet the requirements of EMIR, and it anticipates that UK CCPs will apply for authorisation under EMIR during 2013.  View Article
FT: Clearing house push set for delay
Tougher rules in Europe for derivatives trading may face further delays, as European lawmakers plan to vote in early February on a motion that would reject proposals drawn up by the region's market regulators.  View Article
FT: Regulations cause collateral damage
A swath of regulations introduced in the wake of the global financial crisis is set to force a host of derivatives to be cleared via central counterparties.  View Article
FN: Investors warm to futures as clearing looms
Many global institutional investors plan to increase their use of futures contracts at the expense of the over-the-counter derivatives market, in the wake of regulations that will make it more costly to trade swap contracts.  View Article
FT: BofA shifts derivatives to UK
The Bank of America has begun moving more than $50 billion of derivatives business out of its Dublin-based operation and into its UK subsidiary.  View Article
Chancellor Merkel: Taking the best as an example
Chancellor Merkel said that in future competitiveness would be the key to prosperity in Europe, and called for an EU compact for competitiveness. She also called for the regulation of the shadow banking system to play a major part at the G20 meeting in Russia.  View Article
ECMI debate sheds light on future market abuse rules
"The best way for the EU to proceed in the face of market abuse is not to wait for the US to finish the given investigation and then ask for extradition", said MEP Arlene McCarthy.  View Article

Insurance

Commission to examine legal obstacles to cross-border trade in insurance
The European Commission is set to examine barriers to cross-border trade in insurance products caused by different contract laws in the EU's Member States, after today launching a call for experts to look into the problem.  View Article
Insurance Insight: Pan-European insurance contract law a 'logistical minefield'
The principles behind a pan-European insurance contract law are sound, but any attempt to implement such a framework would be a logistical minefield, according to industry insiders.   View Article
EIOPA publishes Report on the Functioning of Colleges of Supervisors and Action Plan 2013
The Report concludes that despite the uncertainty over the exact date for the Solvency II implementation, supervisors involved in colleges are making great efforts to prepare for the implementation of the new framework.  View Article
EIOPA launches long-term guarantee assessment
EIOPA launched a technical assessment of the long-term guarantee package agreed by the Trilogue parties (the EP, the Council of the EU and the European Commission) in the context of the Omnibus II Directive negotiations.   View Article
Insurance Europe backs testing of Solvency II measures
Insurance Europe welcomes the launch by EIOPA of a technical assessment to find the most appropriate treatment of long-term guarantees under the forthcoming Solvency II regulations.  View Article
Risk.net: New risk-free rate calculation for long-term guarantees test
EIOPA has changed the way the Solvency II risk-free rate is calculated for the long-term guarantees impact assessment that is due to begin next week.  View Article
Risk.net: Concerns over restrictions in matching adjustment assessment
The versions of the matching adjustment being tested in the long-term guarantees impact assessment are too restrictive and could limit the use of the mechanism by insurers, experts warn.  View Article
Deloitte: Insurers braced for next stage of Solvency II annuity battle
As regulators start to assess the impact of potential rules to align the treatment of insurance across Europe, Deloitte highlights the huge implications for annuity providers.  View Article
Risk.net: Insurers to chase liquidity premium in 2013 – BlackRock
Insurers will increase their allocation to illiquid and non-traditional credit assets in 2013, as low interest rates continue to challenge their business models and profitability, according to asset management firm BlackRock.  View Article
CRE: Buyers not providing sufficient risk information, bemoan insurers
German industrial insurers are growing increasingly frustrated by the dearth of risk information provided by, and risk dialogue with, corporate clients.  View Article

Asset Management

EFAMA: EU asset management industry united on UK role
Director General Peter de Proft said that EFAMA believes that the UK asset management industry gains hugely from the Single Market.  View Article
Hedgeweek: UK gives firms an extra year to comply with AIFMD
The UK's fund management industry has been given an extra year to comply with the EU's Alternative Investment Fund Managers' Directive.  View Article
EDHEC-Risk Institute puts forward a series of proposals to limit non-financial risks in the European fund management industry
EDHEC-Risk Institute is putting forward a series of proposals to limit these risks, which emerged during the 2007-2008 crisis and undermined the quality of the UCITS label.  View Article
DWP publishes call for evidence on impact of Defined Benefit pensions on growth
This call for evidence seeks to gather views on whether a new statutory objective for the Regulator is necessary, or whether the appropriate considerations can be delivered under existing objectives. Alternatively, it asks whether other changes to the legislation are required.  View Article
NAPF comments on government consultation on funding DB pension funds
The National Association of Pension Funds (NAPF) commented on the call for evidence on the impact of funding defined benefit (DB) pensions on investment and growth, which was published by the Department for Work and Pensions.   View Article
EDHEC: Towards better consideration of pension liabilities in EU countries
The goal of this study is to provide a broad picture of explicit and implicit pension liabilities in the EU-27 countries' pension systems, together with an assessment of the risks each of them face.  View Article
IPE: Study shows growing interest in ETFs among pension professionals
According to a study by State Street Global Advisors (SSgA), pension professionals in Europe are looking increasingly to invest in ETFs, although nearly 40 per cent still have no exposure to this type of strategy.  View Article
IPE: UK consultation on liabilities smoothing comes too little, too late
Smoothing of liabilities could be introduced in the UK to offset the "disproportionate" financial strain low bond yields are causing pension fund sponsors, the Department for Work & Pensions (DWP) has said.  View Article
IPE: Romanian government maintains second-pillar pension contribution rise
The newly elected Romanian government's draft budget for 2013 has retained a planned second-pillar contribution rise, from 3.5 per cent to 4 per cent of gross wages.  View Article

Corporate Governance/Accounting

ECA: Work programme 2013 - 2017
The ECA published its work programme of audit reports for 2013. In 2013, the ECA intends to publish more than 70 audit reports in the areas of the EU budget and the European Development Funds. The topics will include EU public accountability and audit deficits, and EU financial management risks.  View Article
FRC: Consultation on implementation of Sharman Panel recommendations
The FRC published for consultation guidance for directors, and related standards for auditors, to implement the recommendations of the Sharman Panel of Inquiry into Going Concern and Liquidity Risks. Responses to the consultation questions and other comments are requested by 28 April, 2013.  View Article
IASB Chairman Hoogervorst focused on the search for consistency in financial reporting
Hoogervorst delivered a speech, entitled 'The search for consistency in financial reporting', at a Centre for Financial Analysis and Reporting Research (CeFARR) briefing held at Cass Business School in London.   View Article
EFRAG's comment letter on financial reporting measurement framework
EFRAG published its comment letter on the CICA research paper, 'Toward a Measurement Framework for Financial Reporting by Profit-Oriented Entities'.   View Article
IASB: Joint effort needed to tackle disclosure problem
The IASB released highlights of a survey conducted recently on financial information disclosures, ahead of its public discussion forum on Disclosures in Financial Reporting. Respondents to the survey identified various factors that contribute to the disclosure problem.  View Article
CeFARR research report: 'Accounting for asset impairment: a test for IFRS compliance across Europe'
The Centre for Financial Analysis and Reporting Research (CeFARR) at the Cass Business School prepared a research paper that shows inconsistencies in IFRS compliance reflected in European listed companies' impairment reporting practices.  View Article
FRC: Response to exposure draft clarification of acceptable methods of depreciation and amortisation
FRC published its comment letter to the IFRS ED, "Clarification of Acceptable Methods of Depreciation and Amortisation: Proposed amendments to IAS 16 and IAS 38". FRC agrees that depreciation should reflect the consumption of economic benefits.  View Article
FEE: Comment letter on EFRAG-ANC-FRC discussion paper towards a disclosure framework for the notes
FEE supports the work that EFRAG has performed to date in trying to develop a disclosure framework aimed at setting a number of principles to increase the relevance of the notes to the financial statements.   View Article
EFRAG: Draft comment letter on recoverable amount disclosures for non-financial assets
EFRAG published its draft comment letter to the IASB on its Exposure Draft Recoverable Amount Disclosures for Non-Financial Assets (Proposed Amendments to IAS 36) seeking feedback from its constituents. Comments are invited on the letter by 11 March, 2013.  View Article
EFRAG: Draft comment letter on acquisition of an interest in a joint operation
EFRAG published its draft comment letter on the IASB's Exposure Draft ED/2012/7 Acquisition of an Interest in a Joint Operation. Comments on the letter are invited by 20 March, 2013.  View Article
ACCA: Tax system should not be used to regulate banks
ACCA presented evidence to the Committee for Banking Standards Panel on tax, audit and accounting on the topic of banking tax practices. ACCA does not believe that the tax system itself is to blame for excessive leverage in banks. It is rather a failure of management.  View Article
IFRS Foundation publishes free teaching material
The IFRS Foundation published the first part of its Education Initiative's comprehensive Framework-based IFRS teaching material.  View Article

European Council/Parliament

Committees focus on European Semester - Closer economic coordination calls for more democratic control
The EU's parliaments need to develop much deeper collaboration mechanisms to keep control of the Europeanisation of decision-making and ensure that EU and national budgets are used more effectively, said MEPs and MPs at the closing session of the Parliamentary week on the European Semester.  View Article

Graham Bishop’s Articles and Speeches

Graham Bishop: Cameron rolls the dice with history: 'Cameron the Triumphant' OR 'Tory Oblivion/UK Disaster'?
The long-awaited Cameron speech was finally uttered and contains huge implications for both Britain and Europe.  View Article





© Graham Bishop

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