Dear [[firstName]],
Welcome to our Gold Friends weekly e-mail.
Highlights of my week: Twenty-nine years ago, President Reagan described the USSR as the “evil empire”. Today, the evil empire is re-incarnated in just one man – Putin. Financial regulation has taken a back seat this week as the barbaric attacks on Ukraine developed.
However, the longer-term consequences for the financial architecture of Europe are likely to be profound as the EU contemplates another round of expansion driven by the desire for security – forcing that issue up its agenda rather than relying solely on NATO. The SWIFT ban will reverberate around the global - let alone European – financial system, as Jim O`Neill pointed out. Moreover, this crisis is already proving to be a test of “ESG” investing – not of `green’ but of social and ethical corporate actions. The FT’s Shrimsley wrote “Ukraine marks an end to Brexit illusions”. As our ancestors have known for only a couple of thousand years, Britain is firmly anchored offshore Europe – not Asia, as Brexiteers would like to dream about.
Graham Bishop
Articles from 25 February - 3 March 2022
General Financial Policy
General Financial Policy
Carnegie: Russia’s War Against Ukraine Ends Europe’s Self-Deception : Ten years after Strategic Europe was launched, the EU, with Germany playing a pivotal role, may finally start acting strategically. It will mean shattering illusions about war, peace, and stability. View Article
CER: Four questions on how the Russian assault on Ukraine will affect Europe : CER experts provide answers on the off-ramp for Putin, Germany’s defence spending, how to deal with refugees, the internal battle over the rule of law and the impact on the EU’s neighbourhood. Vladimir Putin’s invasion of Ukraine will change Europe in many ways. View Article
Russia’s military aggression against Ukraine: EU bans certain Russian banks from SWIFT system and introduces further restrictions : The Council today introduced further restrictive measures in view of the Russian Federation’s unprovoked and unjustified military aggression against Ukraine. View ArticleBloomberg: Why SWIFT Ban Is Such a Potent Sanction on Russia : Yet on Feb. 26, the U.S. and its allies put aside fears over the potential hit to their own economies and moved to shut a group of Russian lenders out of the network. That left bankers and diplomats racing to grasp the repercussions for everything from energy exports to debt and currency markets. View Article
Project Syndicate's O'Neill: Will Sanctioning Russia Upend the Monetary System? : By preventing Russia's central bank from accessing the country's foreign-exchange reserves, the West has effectively seized Vladimir Putin's war chest. And even in the face of this awesome display of Western power, alternatives to the dollar-dominated monetary system will not be forthcoming. View Article
SRB: Sberbank Europe AG: Croatian and Slovenian subsidiaries resume operations after being sold : SRB adopts resolution decisions for Slovenian and Croatian subsidiaries, decides no resolution action required for parent company in Austria. View Article
Future of Europe: final set of European Citizens’ Panel recommendations : The final meeting of the Panel on ‘A stronger economy, social justice and jobs / Education, culture, youth and sport / Digital transformation’ took place in Dublin over the weekend. View Article
BIS: Global banks' local presence: a new lens : Branches pose higher risks to host countries than subsidiaries do, because of more volatile asset growth, greater responsiveness to home country conditions, and weaker control by host authorities. View Article
Banking Union
SSM: Supervisory independence and accountability : Speech by Kerstin af Jochnick, Member of the Supervisory Board of the ECB, View Article
Capital Markets Union
ISDA: A Big Step to Derivatives and SFT Alignment : Derivatives and securities financing transactions (SFTs) interconnect in a variety of ways and share many common features, but participants that straddle both markets have to use two or more similarly structured agreements to document their derivatives and SFT trades – a situation that can be both complex and duplicative. View Article
Comments of the German Banking Industry Committee on EU-Listing-Act : The German Banking Industry Committee commented on EU Commission’s consultation on an EU Listing Act on February 11, 2022. View Article
Personal message from FESE Director General on the MiFIR review proposal : Decision-makers across Europe are assessing proposed changes to MIFIR. Having been part of the stock exchange industry for over 30 years, Rainer Riess shares his thoughts. At this moment, the voice of exchanges needs to be heard and their value to society and the real economy needs to be recognised. View Article
Environmental, Social, Governance (ESG)
FT: Russia’s invasion of Ukraine must prompt an ESG reckoning : Not all chief executives have had the courage to take actions which would be consistent with their former declarations View Article
GRI underwhelmed by EU Sustainable Corporate Governance Directive : More ambition in scope and reach needed to achieve greater impact View Article
IPE: EC advisers adjust proposed social taxonomy structure given feedback : The Platform on Sustainable Finance (PSF) has published its delayed final report on a social taxonomy, proposing a new structure in particular in response to concerns about administrative burden for companies that may need to report against such a framework. View Article
ACCA statement on the release of the European Commission’s initiative on Corporate Sustainability Due Diligence : While we view this as a step in the right direction, ACCA believes greater transparency and disclosure are needed on the entire spectrum of ways businesses can impact people and the planet if we are to ensure that sustainability is effectively embedded into corporate governance best practices. View Article
Projetc Syndicate's Pisani-Fery: Will the Climate Agenda Unravel? : Despite widespread worries about global warming, more immediate economic concerns risk relegating climate policy to the fringes of political debate. This situation raises three fundamental questions for governments. View Article
EBA recommends adjustments to the proposed EU Green Bond Standard as regards securitisation transactions : The European Banking Authority (EBA) published today a Report which analyses the recent developments and challenges of introducing sustainability in the EU securitisation market. View Artic
Protecting Customers
Better Finance: Podcast: Are consumers being mis-sold investment funds? : BETTER FINANCE's Managing Director, Guillaume Prache, participated to the last episode (Are consumers being mis-sold investment funds?) of the podcast Fair and Square, part by Fideres. View Article
Insurance Europe: EC Retail Investment Strategy must maintain rules that work for consumers.. : and any changes must be proportionate and provide proven benefits...Insurance Europe has responded to a consultation by the European Insurance and Occupational Pensions Authority (EIOPA) on its draft advice to the European Commission on certain aspects relating to retail investor protection. View Article
Chartered IIA warns boards to “get a grip” on unhealthy corporate cultures in the wake of a string of culture-related scandals : With the risks arising from an unhealthy corporate culture once again in the spotlight, today new research has revealed that boards are not taking culture seriously. This is despite the visible impact a culture crisis can have on reputation, public trust, and damage to long-term sustainability. View Article
Fin Tech Regulation
CEPS: The Data Act: six impossible things before breakfast? : It is no mystery that the EU institutions consider data as one of the most essential inputs for a competitive economy. Depending on other jurisdictions and market players for the storage, processing and provision of data is seen as tantamount to enslaving the European economy to foreign powers. View Article
ICMA response to ESMA Call for Evidence on a DLT Pilot Regime : ICMA has submitted its response to ESMA’s Call for Evidence on a DLT Pilot Regime. The call for evidence sought feedback from stakeholders on the need to amend the RTS on pre- and post-trade transparency and data reporting requirements in the context of the DLT Pilot. View Article
Economic Policies Impacting EU Finance
NextGenerationEU: First annual report on the Recovery and Resilience Facility finds implementation is well underway : The RRF is providing up to €723.8 billion (in current prices) of grants and loans to Member States to support transformative investments and reforms that will enable the EU to emerge stronger from the COVID-19 pandemic. View Article
Commission presents fiscal policy guidance for 2023 : The European Commission has today adopted a Communication providing Member States with guidance on the conduct of fiscal policy in 2023. View Article
European Commission: Towards a green, digital and resilient economy: our European Growth Model : The Communication sets out the key investments and reforms that are required to achieve our common objectives and underlines the importance of coordinated action by all relevant actors, including the EU, Member States and the private sector. View Article
Brexit and the City
HM Treasury: Wholesale Markets Review consultation response : The government is taking forward reforms to the UK’s financial services regulatory framework for capital markets. View Article
AFME welcomes next steps on UK Treasury Wholesale Markets Review : At an event organised by the Association for Financial Markets in Europe (AFME) today on the Future of UK Wholesale Financial Markets, the UK Treasury outlined its proposals for the Wholesale Markets Review. View Article
UK Finance responds to the publication of the Wholesale Markets Review consultation response : HM Treasury’s announcement on the Wholesale Markets Review outlines the next phase of an ambitious plan to boost competition and drive efficiencies in the UK’s capital markets. View Article
Brexit
FT: Ukraine marks an end to Brexit illusions : Lofty dreams of a tilt to the Indo-Pacific must give way to the real threat of war in Europe View Article
Federal Trust's Chair/Director: Ukraine, Russia and Brexit: Europe's stability under threat : They describe the radical change that has now taken place in European and particularly German thinking about security. They predict much greater future cohesion within the EU on defence-related matters. Brexit means that the UK will be excluded from this process. View Article
The UK in a changing Europe: British politics after Brexit : Brexit is done. its political ramifications, less so. This should not, however, lead us to assume that the ‘Brexit effect’ will be with us forever. View Article
LSE: The problem of tracing dirty money from Russia: How ‘illegal’ are ‘illicit’ flows? : Russia’s invasion of Ukraine has prompted renewed calls to tackle the flow of ‘dirty money’ from Russia into other European states. Tom Mayne, Tena Prelec and Catherine Owen argue that given the challenges associated with conceptualising illicit financial flows, a wider approach to studying the transnational reach of dirty money is needed. View Article
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