Welcome to our Gold Friends weekly e-mail.
My highlights of the week: The consequences of Putin’s mistakes are compounding: Ukraine and Moldova are about to be granted `EU Candidate’ status; Eurobarometer reported a two-decade high in public support for the EU while 80% support economic sanctions on Russia. However, President Macron’s failure in the French Parliamentary elections may be ominous. The ECB is seeking a new tool to prevent euro area fragmentation though the SRB reported that euro area banks have survived the pandemic surprisingly well. AFME continued to stress the need for competitive financial markets. ESG is flourishing amongst European investors: ALFI said that 83% of global sustainable funds are held in Europe. The IMF reported the surprising conclusion that Crypto/CBDC can use less energy than existing payments systems. The House of Lords cautioned against Brexit complacency in financial services while the House of Commons has set up a new committee to deal with a potential wave of financial regulations as the UK `takes back control’
Graham Bishop
Articles from 17-23 June 2022
Policy impacting Finance
MEPs say EU leaders must grab the opportunity to expand and reform the EU : Ukraine and Moldova should become EU candidate countries as soon as possible, Georgia is also part of the European family but more reforms needed; Treat Western Balkan countries fairly and unblock their accession process; EU institutional reform also necessary... View Article
The European Commission recommends to Council confirming Ukraine, Moldova and Georgia's perspective to become members of the EU and provides : Today, the European Commission presented its Opinions on the application for EU membership submitted by Ukraine, Georgia and the Republic of Moldova as invited by the Council. View Article
European Parliament: EU-Wide Survey: In face of Ukraine war, Citizens close ranks in support of EU : 65% of Europeans see EU membership as a good thing, the highest result since 2007; EU’s economic sanctions against Russia are supported by 80%; 59% say that the defence of freedom and democracy must be a priority ... View Article
EPC: EU candidate status for Ukraine is a geopolitical and moral imperative : On 17 June, the European Commission recommended that Ukraine (and Moldova) be granted EU candidate country status. At the next European Council, EU leaders should follow suit sans conditions. Not doing so would be a geopolitical and moral blunder. View Article
Fondation Schuman: The presidential coalition, Ensemble, has failed by a wide margin to win an absolute majority in the National Assembly : The government fell short of its target by 15 votes...The "strategic vote" did not work, nor did the call for a "republican front" as used previously. View Article
Project Syndicate's Pisani-Ferry: France’s Constitution Will Be Tested : By depriving President Emmanuel Macron of a majority in the National Assembly, French voters have ... presented the country’s political system with a major challenge. With both the far left and the far right well represented in parliament, the political conversation has changed irreversibly. View Article
Commission sets out first analysis of the proposals stemming from the Conference on the Future of Europe : These proposals, covering nine broad themes, were based on recommendations made by citizens during the European Citizens' Panels and the National Citizens' Panels, and who contributed their ideas through the Multilingual Digital Platform. View Article
Carnegie: Does the EU Need Treaty Change? : EU integration has been propelled by both treaty change and improvised action. To continue to adapt and respond in this era of crises, the union should adopt limited treaty amendments that implement the conclusions reached at the Conference on the Future of Europe. View Article
Bruegel: Discretion lets Croatia in but leaves Bulgaria out of the euro area in 2023 : Crucial decisions about whether a country can join the euro area depend on questionable discretionary decisions. View Article
Bruegel: A new European tool to deal with unjustified rising spreads : The European Central Bank needs a new tool to prevent the current rise in spreads, triggered by monetary policy tightening, from escalating into a new euro-area crisis. View Article
Banking Union
The SRB Blog: Euro area banks’ resilience : Euro area banks have emerged from the pandemic largely unscathed, mainly due to the unprecedented support from governments, central banks, regulators and supervisors. View Article
Capital Markets Union
MEPs want to revive European long-term investment funds : On Monday, the committee adopted the uniform rules on the authorisation, investment policies and operating conditions for European long-term investment funds (ELTIFs) with 43 votes to 3. View Article
AFME: The EU Must Strengthen the Competitiveness of Its Financial Markets : The outbreak and resurgence of the COVID-19 pandemic over the last two years and now the economic impact of the war in Ukraine underscore why the European Union (EU) needs a resilient and diversified financial system able to withstand sudden economic shocks. View Article
AFME welcomes the political agreement on the CSRD, encourages coordination among EU and international standard setters : The CSRD is a key pillar of the EU sustainable finance framework. Once implemented, it will introduce comprehensive sustainability reporting requirements for companies in the EU. View Article
Vision for the future of EU wholesale financial markets: AFME recommendations on the MIFIR Review : Over the recent period of geo-political instability and global pandemic, EU capital markets continued tointermediate liquidity and facilitate risk management for corporates and investors. View Article
EFAMA welcomes adoption by Council of its General Approach to AIFMD & UCITS Reviews : We commend the swift progress made by the French Presidency in this regard and its thorough approach to the review. The initial proposal of the Commission was designed as a targeted review of a well-functioning framework, an approach which the Council has continued and carried through in its report. View Article
InsuranceEurope: Collective redress - EU should develop rules on third party litigation funding (TPLF) : TPLF allows private financiers, like investment and hedge funds, to sign confidential deals with lawyers or qualified entities to fund lawsuits and arbitration in exchange for a cut of any settlement or judgment/award View Article
Environmental, Social, Governance (ESG)
Climate change: Parliament pushes for faster EU action and energy independence : Emissions Trading System reform: free allowances for industries phased out more quickly and citizens included later in ETS II; Broader scope and faster implementation in new carbon leakage instrument; A Social Climate Fund to combat energy and mobility poverty View Article
SSM's Elderson: Good, bad and hopeful news: the latest on the supervision of climate risks : I will update you on the recent progress on both the international agenda and the ECB’s own supervisory agenda on climate-related and environmental risks, or C&E risks for short. View Article
GRI: Encouraging progress on EU standards – with deeper alignment the next step : Mapping the new European Sustainability Reporting Standards with the GRI Standards View Article
UNEP FI: Carbon pricing policy instruments need a radical redesign and competent implementation : ... a new position paper by the UN-convened Net-Zero Asset Owner Alliance argues that carbon pricing must be supported by a mix of policy instruments including international coalitions to provide predictable price signals to businesses and ensure a just and equitable transition for consumers. View Article
ALFI: Key findings from the European Sustainable Investment Funds Report 2022 : Europe holds 83% of global sustainable funds’ net assets, reaching almost EUR 2 trillion at the end of 2021, up 71% from 2020 View Article
ICMA: Updated analysis of the proposals for the EuGB Regulation : Trilogue discussions are beginning between the co-legislators to determine a final text for the Regulation on European green bonds. View Article
EBF Position paper – Corporate Sustainability Due Diligence Directive (CSDD) : The directive should clarify whether it is asking financial entities to identify the adverse impact just once during the onboarding of the client or for each new product/service contract a company is selling to a same client. View Article
SSEI: Nearly 70 stock exchanges promoting TCFD – 5 key actions : The database identified five activities that stock exchanges are undertaking in support of the diffusion of reporting practices in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). View Article
Fin Tech Regulation
BIS: The future monetary system : A burst of creative innovation is under way in money and payments, opening up vistas of a future digital monetary system that adapts continuously to serve the public interest.Structural flaws make the crypto universe unsuitable as the basis for a monetary system: it lacks a stable nominal anchor, while limits to its scalability result in fragmentation. Contrary to the decentralisation narrative, crypto often relies on unregulated intermediaries that pose financial risks View Article
IMF: How Crypto and CBDCs Can Use Less Energy Than Existing Payment Systems : Environmentally conscious design can make a major difference in the energy efficiency of digital currencies. View Article
EBF response to European Commission’s Targeted Consultation on a digital euro : This is a key topic for the European banking industry as a digital euro seeks to respond to the unprecedented speed of digitalization of the economy and payments, and has the potential to fundamentally impact the banking system. View Article
Brexit and the City
Government reluctant to engage with the EU on financial services says Lords Committee : Tthe Committee cautions the Government against complacency. It is not yet clear whether the impact of Brexit on the sector has fully played out. View Article
Reuters: Full Brexit yet to play out on British finance, lawmakers say : Britain should avoid major, hasty reforms to make its financial sector more globally competitive following the industry's separation from the European Union by Brexit, a parliamentary report said on Thursday. View Article
FT: UK financial services co-operation with EU hit by Northern Ireland row : Lords committee finds sector has become ‘collateral damage’ in post-Brexit dispute over trade agreement View Article
Treasury Committee establishes Sub-Committee for scrutiny of financial services regulations : In a new report detailing its approach, the Committee outlines that new forms of scrutiny will be required, given the number of regulatory initiatives is likely to grow as regulators assume additional responsibilities following the UK’s exit from the EU. View Article
Brexit
UKandEU: The Northern Ireland protocol bill and its constitutional implications : It demonstrates the increasing dominance of Whitehall (the Executive) over all other branches of the state – notably the courts and Parliament. View Article
Post-Brexit EU–UK cooperation on migration and asylum: How to live apart, together : The UK’s withdrawal from the EU has created a policy, legal and operational vacuum in migration and asylum matters which undermines the interests of both sides. There is no more binding framework which defines responsibility for asylum seekers and facilitates transfers between the EU and the UK. View Article
EU-UKForum: Are eurosceptics making a strategic mistake? : The argument runs something like the following: two and a half years after we have left, there is too little to show for Brexit and not enough that could be reversed by an administration not ideologically inclined to pursue the benefits of leaving the EU. View Article
Federal Trust: Brexit undermines the rule of law in the UK : View Article
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