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13 March 2014

This week in "Brussels"
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European Council/ParliamentGraham Bishop’s Articles and Speeches About this email

Articles from 06 March 2014 - 13 March 2014

Banking

Main results of the ECOFIN Council: SRM
The Council adjusted the mandate given to the Presidency for negotiations with the EP on the establishment of a single resolution board and a single fund for the resolution of banks. It called for a conclusion of the talks on the proposed SRM in time for the plenary session on 14-17 April. (Includes comments.)  View Article
Bank resolution mechanism: MEPs welcome progress, signal crucial work remains
The lead MEPs negotiating the bank single resolution mechanism legislation signed a statement noting that some progress had been made but that there was still a great deal of work to be done.  View Article
Commissioner Barnier: Introductory remarks on the SRM
Barnier said it was imperative that the Greek Presidency be given a revised mandate, including the necessary leeway to enable an agreement with Parliament, in the coming days. He elaborated in detail on the points where he saw scope for convergence.  View Article
German finance minister Schäuble: Starting the Banking Union with healthy banks
Schäuble advocated strict separation of monetary policy and supervisory activities in day-to-day operations, and efficient decision-making processes for the SRM. The IGA proposal for the European resolution fund was legally sound, he said.  View Article
Remarks by Jeroen Dijsselbloem at press conference following Eurogroup and IGA meetings
The Eurogroup reviewed the IGA for the Single Resolution Fund, the ESM direct recap instrument, the Commission's recent recommendations on macro-economic imbalances, and the state of play in Greece, Cyprus and Portugal. (Includes link to VP Rehn's statement.)  View Article
Commission adopts nine RTS to implement the single rule book in banking
The nine RTS define the ways in which competent authorities and market participants must, i.a., handle disclosures linked to securitisation instruments, and measure potential losses from derivative positions and counterparty failure. They also specify the types of instruments for paying bonuses.  View Article
ECB publishes manual for Asset Quality Review
The ECB published its 285-page manual on the methodology for Phase 2 of the AQR. The manual provides guidance for the national competent authorities and their third-party support on carrying out the exercise. Phase 2 follows the portfolio selection (Phase 1) and will run until August 2014.  View Article
ECB/Draghi: Introductory statement to the press conference
Draghi answered questions i.a. on NPLs, the OMT programme and the AQR. The ECB believes that the SRM mutualisation process should be speeded up and its governance should be effective, so that the resolution authority is able to make decisions 'in a matter of hours'.  View Article
ECB/Lautenschläger: Interview with WSJ
Lautenschläger discussed i.a. the OMT programme and the AQR. "The AQR and the stress test will be tough", she said. "They will be credible, stringent and consistent. It's the last chance to clean up."  View Article
Sharon Bowles interview in the Guardian: Taking on banking's 'world of grey men'
The ECON chair said she refused to get angry at banks' attempts to circumvent the pay limits which she pushed through the EP. However, she expressed concern about central counterparties, saying she thought they were undercapitalised.  View Article
EBIC position paper on liquidity and on the forthcoming EC delegated act
EBIC welcomes the Commission's efforts to strengthen financial stability through the development of different regulatory initiatives. However, going further in some of the initiatives planned, in particular with regards to liquidity, could have opposite effects to the ones sought.  View Article
EBA consults on draft technical standards on data waiver
EBA launched a consultation on draft RTS on the conditions according to which competent authorities may grant institutions permission to use relevant data covering shorter time series when estimating risk parameters. Deadline for comments is 7 June, 2014.  View Article
FT: Forex probes set to dwarf Libor cases
The global probe into possible price rigging in foreign exchange markets has spawned a new industry centred on investigating the £5.3-trillion-a-day sector, as regulators and global banks throw enormous resources at shedding light on the allegations.  View Article

Securities

ESAs consult on supervisory practices for financial conglomerates
The Joint Committee of EBA, ESMA and EIOPA launched a public consultation on its draft Guidelines on the convergence of practices aimed at ensuring consistency of supervisory coordination arrangements for financial conglomerates. The consultation will run until 12 June, 2014.  View Article
ESMA sees improved securities market conditions, although risks remain elevated
ESMA has published its first Report on Trends, Risks and Vulnerabilities, and its Risk Dashboard for 4Q 2013. The report looks at the performance of EU securities markets, assessing both trends and risks in order to develop a comprehensive picture of systemic and macro-prudential risks in the EU.  View Article
Reuters: Vote on EU benchmarks law postponed to next European Parliament
"The rules are going nowhere and they will not be voted in this mandate", said ECON chair Sharon Bowles. "We had a position that was stable and broadly supported before the Commission started to assassinate it", she added.  View Article
IFR: Derivatives - MEP calls for US cross-border respite
MEP Kay Swinburne has called on US regulators to recalibrate their approach in implementing global derivatives reforms to ensure a level playing field across jurisdiction, and learn lessons from a region that has a wealth of experience in implementing rules across borders.  View Article
EACT publishes letter to Commissioner Barnier on EMIR
Immediately before the EMIR reporting start date of 12 February, EACT sent a letter to Commissioner Barnier stressing the numerous difficulties faced by non-financial counterparties in implementing the EMIR reporting obligation.   View Article
Risk.net: EU banks fear capital hit from CCP approval delays
For banks to apply a 2 per cent risk-weight, non-EU CCPs must be approved by ESMA and their home-country rules by the EC. That process has to be complete by June 15 but banks now fear that will not happen in some cases.  View Article
IOSCO report compares, analyses prudential standards in the securities sector
IOSCO's latest consultation undertakes a high level comparative analysis of the key prudential/capital frameworks for securities firms. The report seeks to highlight similarities, differences and gaps among the different frameworks. Comments should be submitted by 10 June, 2014.  View Article
Ralph Atkins: Questions surround Europe's coco bonds
Writing for the FT, Atkins says that coco bonds accounted for just 4 per cent of bank debt issuance in Europe last year. But volumes are increasing exponentially and with it there may be hidden dangers.  View Article

Insurance

Omnibus II vote: A big step towards a safer and more competitive insurance industry
The EP adopted in plenary session the "Omnibus II" Directive that completes the "Solvency II" Directive of 2009 and finalises the new framework for insurance regulation and supervision in the EU. (Includes responses from Insurance Europe, Greens/Giegold and Fitch.)  View Article
Risk.net: Commission 'must ensure proportionality of Solvency II' rules as MEPs give green light to new regime
The EP adopted the Omnibus II Directive by 560 votes to 113. But there were warnings about the fine detail of the delegated acts to be drafted by the Commission which will flesh out the Directive.  View Article
Risk.net: EC to restrict deferred tax assets in Solvency II
European policy-makers are planning to constrain insurers' ability to recognise deferred tax assets as loss-absorbing capital on their Solvency II balance sheets.  View Article

Asset Management

EU abandons reform of money market funds
Controversial proposals that could have killed off Europe's €450 billion-strong fixed-value money market fund industry have been pushed back to the next European Parliament. The EP's negotiator said the move was 'simply unwise and unacceptable', and accused elected MEPs of acting like puppets.  View Article
EBF/PensionsEurope comment on EBA final draft RTS on own funds
In a letter to the Commission, EBF/PensionsEurope highlighted the problem for European pension funds sponsored by banks with Article 15(a) of the draft RTS. DC pension funds should not affect the regulatory capital of the sponsoring banking institution.  View Article
NAPF: Indices and benchmarks made simple for pension funds
NAPF has published a new guide to help pension funds get to grips with indices and benchmarks. The guide looks at how indices work and how they can be used by pension funds when looking at their investment strategies.  View Article
IPE: Institutions ready to pour $1 trillion into European infrastructure
Conditions now look right for a revival in European infrastructure investment, but governments risk missing out on the potential growth from this by failing to provide assets and the right regulation, a study commissioned by law firm Linklaters concludes.  View Article

Corporate Governance/Accounting

Parliament backs Commission proposal for EU co-financing of IFRS Foundation, EFRAG and PIOB
The three organisations play a key role in the development of accounting and auditing standards.  View Article
IASB/Hoogervorst: Closing the accounting chapter of the financial crisis
The IASB chairman's speech focused on the impact of the global financial crisis on financial reporting.  View Article
IFRS Foundation and IVSC coordinate on fair value
The IFRS Foundation and the International Valuation Standards Council announced a joint statement of protocols for cooperation on IFRS and International Valuation Standards.  View Article
Insurance Europe: Audit reform inappropriate for multinationals
Insurance Europe believes that the JURI Committee's provisional agreement with EU Member States on the EC's proposal for a regulation on the statutory audit requirements of public-interest entities neglects the complexities of multinational groups.  View Article

Financial Services Policy

MEPs vote to strengthen and streamline financial supervision system
The EP has adopted a non-binding report with recommendations on the European System of Financial Supervision. The report calls for greater efficiency and more power for ESAs, with a view to ending the power struggle with national authorities, which it says undermines EU financial supervision.   View Article

European Council/Parliament

Main results of the ECOFIN Council: Taxation of savings income
The Council discussed strengthened rules on the taxation of savings income aimed at enabling Member States to clamp down better on tax fraud and tax evasion. Commissioner Šemeta expressed his disappointment that there had been no political agreement, but said the discussions had been constructive.  View Article
Council conclusions on the 2014 Annual Growth Survey and European Semester 2014
Economic forecasts confirm signs of a slow recovery, though modest and fragile. However, the legacy of the crisis will continue to weigh on growth for a considerable time, through high levels of unemployment, falling household incomes and rising poverty and inequalities.  View Article
Plenary Session: Troika helped to avoid the worst, but flawed structure harmed recovery
The EU/ECB/IMF Troika helped four EU countries through the crisis and prevented it from getting worse. But its flawed structure and working methods hindered national "ownership" and compromised transparency and accountability, says a resolution on the EP inquiry findings. (Includes speeches/EP group comments.)  View Article
Plenary Session: MEPs damp down claims of economic recovery ahead of March EU summit
In the debate on the last EU summit before the European elections, MEPs disagreed with Commission President Barroso and Dimitrios Kourkoulas for the Greek Presidency that economic recovery was on the way.  View Article

Graham Bishop’s Articles and Speeches

Graham Bishop's Blog: SRM talks on verge of failure after trialogue - Final try next week
Trialogue with Barnier and Greek Presidency/Eurogroup fails to agree - again. There is little evidence that Council has given the Greek Presidency much latitude.  View Article
Graham Bishop's Blog: SRM - Final act (for 2014 at least) probably at ECOFIN on Monday
The European Parliament has thrown down the gauntlet to the Council by tabling the resolution that it intends to debate in the final plenary session before dissolution.  View Article
Graham Bishop's Blog: Stating the obvious - FT's Münchau says "national interests undermine Europe" - but he has a point!
The easy assumption that fear of war disappeared in Europe with the Berlin Wall is being challenged by Putin's actions but what can the EU do about it?   View Article





© Graham Bishop

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