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GrahamBishop.com wishes all our readers a very happy – but careful and safe – Christmas. Our next weekly will be on 13 January 2022.
My highlights of the week: President Macron wasted no time in bending Chancellor Scholz’s ear on `pragmatic’ financing of the EU – perhaps with an eye to his re-election campaign? However, both Commissioner Gentiloni and the Bruegel think-tank seemed to agree with the President! It is now ESMA’s turn to find `room for improvement’ in bank’s use of IFRS 9 to report their Expected Credit Losses. It was a bad week for proponents of cyber-money as the IMF weighed in on the need for global regulation, ECB’s Panetta questioned the very nature of it and the CPMI published a report on Faster Payment Systems globally that appear to make speculation and money laundering the only remaining purpose of cyber-money. The CFA published a survey that underlined investors’ plea for clarity in ESG standards.
Graham Bishop
Articles from 10 - 16 December 2021
General Financial Policy
POLITICO: Macron urges Scholz to ‘invent’ new financial solutions for EU : The French president told the new German chancellor the EU must find ‘pragmatic ways’ to finance economic growth and strategic sovereignty. View Article
Reuters: Macron humbled by his mistakes as he readies re-election bid : French President Emmanuel Macron, whose hopes of winning a second term face a growing challenge from the opposition, said he has been humbled by the pandemic and his mistakes -- and learned a lot from both. View Article
EURACTIV: Gentiloni: EU recovery fund idea could be used again, if it is a success now : The EU’s idea of jointly borrowing for joint goals, such as for the post-pandemic recovery, could be used again if the implementation of the recovery scheme is a success, the bloc’s Economic Commissioner Paolo Gentiloni said. View Article
Bruegel: EU borrowing—time to think of the generation after next : Financing post-pandemic recovery via EU borrowing has proved remarkably straightforward. So why keep it temporary? View Article
FSB reports on global trends and risks in non-bank financial intermediation : This report presents NBFI developments up to end-2020, the first year of the COVID-19 pandemic, covering 29 jurisdictions that account for approximately 80% of global GDP. View Article
Digital Finance: new Commission strategy paves the way for modern and streamlined supervisory data reporting : The strategy's main objective is to put in place a system that delivers accurate, consistent, and timely data to supervisory authorities at EU and national level, while minimising the overall reporting burden on financial institutions. View Article
Banking Union
ESMA publishes Report on Expected Credit Loss disclosures of banks : ESMA has identified room for improvement in the level of compliance, comparability and transparency in the application of the relevant IFRS requirements. View Article
EBA publishes amended technical standards on credit risk adjustments : The European Banking Authority (EBA) published today its final report on the draft Regulatory Technical Standards (RTS) amending its RTS on credit risk adjustments in the context of the calculation of the Risk Weight (RW) of defaulted exposures under the Standardised Approach (SA) of credit risk. View Article
CPMI: Developments in retail fast payments and implications for RTGS systems : This report takes stock of recent developments in retail fast payment systems (FPS), examines central banks' roles in these systems and discusses the implications for real-time gross settlement (RTGS) systems which provide a critical foundation for the wholesale settlement associated with FPS. View Article
GFIA responds to FATF Recommendation 24 : Revisions to Recommendation 24 focus on the transparency of beneficial ownership and legal persons, and its Interpretive Note. View Article
Capital Markets Union
EIOPA sets out a forward looking digital transformation strategy : In its strategy, EIOPA addresses the challenges posed by the digitalisation of the insurance and pensions sector, while enabling stakeholders to harness the benefits that arise from new technologies and business models. View Article
ISDA: Contractual Standards for Digital Asset Derivatives : Digital assets have experienced enormous growth over the past decade to reach almost $3 trillion in market value, and this has been accompanied by an increase in the number and diversity of market participants. View Article
EIOPA highlights key risks for the insurance and pension sectors : The European Insurance and Occupational Pensions Authority (EIOPA) published today its December 2021 Financial Stability Report. The analysis underpinning the report examined key macroeconomic developments and the prevalence of risks that are key for the insurance and pension sectors. View Article
AMICE: Mutual insurance to be better recognised in Europe : The European Commission’s Social Economy Action Plan encourages better policy and legal frameworks for mutual insurers, and improves awareness in Member States View Article
EIOPA consults on the application guidance on climate change risk scenarios in the ORSA : The application guidance provides a detailed and practical basis on how to implement sustainable finance ambitions in practice. View Article
IPE: EC confirms ‘quite some delay’ in IORP II review : The Commission was still in the process of assessing how the IORP II Directive had been transposed by member states, a process that was “taking more time than we hoped”. View Article
Environmental, Social, Governance (ESG)
SSM's Elderson: Mapping connected dots: how climate-related and environmental risk management is becoming a reality : Addressing climate-related – and I will consistently add environmental – risks in prudential supervision and regulation has many dimensions and perspectives. View Article
CFA Institute Explores Investor Views on ESG Integration : CFA Institute today announced the results of a new, global member survey on environmental, social, and governance (ESG) issues. Investors Want More Clarity Around Standards for ESG Integration. View Article
Proposal for a regulation on European Green Bonds: EBF position : The EBF welcomes the European Commission’s proposal for the development of a voluntary EU Bond Standard (EU GBS), which will provide a common language and serve as a ‘gold standard’ for green bonds by ensuring that proceeds of the bond are allocated according to what is defined as ‘green’ by the Taxonomy. View Article
ECA: COVID-19 response and climate policies at the heart of EU auditors’ work programme : The European Court of Auditors (ECA) today published its work programme for 2022 and beyond, listing its strategic areas and audit priorities. View Article
CFA Institute Welcomes IOSCO Recommendations on Sustainability-Related Practices, Policies, Procedures and Disclosure in Asset Management : The IOSCO recommendations go a long way in assisting global regulatory efforts to improve product-level disclosures and in recognizing the need in all markets for more and continuing investor education on ESG and sustainability investing. View Article
Protecting Customers
SSM: Public consultation on draft Fit and Proper Guide and new Fit and Proper Questionnaire : This consultation gave interested parties the opportunity to comment on the draft ECB guide to fit and proper assessments (Fit and Proper Guide) and the new Fit and Proper Questionnaire. View Article
Fin Tech Regulation
IMF: Global Crypto Regulation Should be Comprehensive, Consistent, and Coordinated : The IMF’s mandate is to safeguard the stability of the international monetary and financial system, and crypto assets are changing the system profoundly. View Article
ECB's Panetta: The present and future of money in the digital age : Money and payments are also undergoing rapid change. Innovative tools are emerging. Not so long ago, cash was more or less the only way to make an immediate purchase... now we use private digital money such as online bank transfers, payment cards and applications on our smart phones or watches. View Article
Friends' Standard Services
178th Brussels 4 Breakfast : Our monthly look at financial developments in the EU institutions, with Graham Bishop, Julia Rodkiewicz (ICMA) and Thea Utoft (FTI Consulting) View Article
Economic Policies Impacting EU Finance
Vox: Reforming the EU macroeconomic policy system: Economic requirements and legal conditions : This column summarises the findings of a group of economists and lawyers specialised in EU matters who undertook a comprehensive assessment of the economic requirements and legal conditions of a well-functioning macroeconomic policy system for the EU and the euro area. View Article
Brexit and the City
POLITICO: EU’s new markets boss weighs risks of euro clearing decision : The EU’s securities regulator is on the cusp of wading into a major Brexit debate over the future of euro clearing. View Article
Brexit
FT: UK offers big concession over Northern Ireland trading relations : London issues 23 licences for French fishing boats in sign of further de-escalation of tensions View Article
LSE's Pomfret: Why does the EU look different through English eyes? : The Brexit referendum was dominated by simplistic visions of the European Union. Critics portrayed the EU as vacuuming money out of the UK to support an overweening Brussels bureaucracy, while Remain supporters appeared tongue-tied in making a positive case to stay in the EU. View Article
CER: The cost of Brexit: October 2021 : In October 2021, UK goods trade was 15.7 per cent, or £12.6 billion, lower than it would have been if the UK had stayed in the EU’s single market and customs union. View Article
Bloomberg: Firms Brace for Extra Brexit Red Tape Amid Supply Lines Squeeze : Jan 1. deadline for additional import checks is looming; Industry concerned bureaucracy will further hit U.K.-EU trade View Article
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