Joint Forum issues customer suitability report

30 April 2008

The report considers how supervisors and regulated firms across the banking, securities and insurance sectors deal with risks posed by the sale of unsuitable retail financial products. A key finding is that the notion of suitability is recognised in regulatory requirements across all sectors, but to a varying extent. View

Commission call for advice on review of Financial Conglomerates Directive

30 April 2008

The Commission issued its third call for technical advice to analyse the effectiveness of the current framework, the Member States’ practices, and the compatibility with relevant sectoral directives to IWCFC. View

CFTC Chilton disagrees with regulatory merger

30 April 2008

There are several ideas that might be preferable to a complete merger of the SEC and CFTC, Commissioner Bart Chilton said. ‘A leap to wholesale merger … would ultimately be costly and inefficient’, he said in a speech held in Boston. The debate should focus on tailored responses to the specific concerns raised in the Blueprint, the Commissioner said. View

Financial Conglomerates Directive - third country supervision and equivalence

30 April 2008

The European Financial Conglomerates Committee issues updated general guidance to EU supervisors on supervision in Switzerland and the United States of America. View

Commission approves rescue aid for WestLB

30 April 2008

The Commission authorised a risk shield granted by the State of North Rhine-Westphalia to protect WestLB against the volatility of its € 23 billion structured investment portfolio, following difficulties because of the sub-prime crisis. View

BIS: Provisional international banking statistics, fourth quarter 2007

30 April 2008

The BIS released provisional data for the end of the fourth quarter of 2007 for both its locational and consolidated banking statistics together with a short commentary. Revised data, together with a detailed commentary, will be made available in the next BIS Quarterly Review to be published on 9 June. View

FESE comments on ESME recommendation on Transparency Directive

30 April 2008

FESE welcomes the ESME recommendation and recommends an even tighter timeframe in which to notify the issuer to enable data to be gathered and verified. FESE suggests that it is set at 2 business days for investors to notify and 2 days for the Issuer or the Competent Authority to report this information to the public. View

Japan to push Asia financial body

30 April 2008

Japan is set to propose the creation of an entity to promote financial stability in Asia during a series of meetings among financial leaders in Spain, government sources said Tuesday. The body would be modelled on the Basel-based Financial Stability Forum and aimed at averting a regional financial crisis amid the prolonged global credit fears linked to the U.S. subprime woes. View

Ifo Institute Sinn: The bad accounting system is the IFRS

30 April 2008

The cause of the current crisis lies in a combination of a bad accounting system and various moral-hazard effects that were not contained by existing regulatory systems, Professor Sinn from the German Ifo Institute said. The bad accounting system is the IFRS as it does not mitigate systemic contagion resulting from asset price movements. View

Independent: Bear Stearns bail-out 'worst policy mistake'

30 April 2008

A former leading Federal Reserve official has branded the US central bank's $29bn bail-out of Bear Stearns as "the worst policy mistake in a generation". Vincent Reinhart, former director of monetary affairs at the Fed, believes the Fed has set a dangerous precedent for itself, ending its role as "honest broker" once and for all. View

FT: Gulf investor warns of EU over-regulation

30 April 2008

One of the most powerful Gulf investors has warned that European attempts to force greater transparency on sovereign wealth funds are making the continent unattractive for investment. Sultan bin Sulayem, head of Dubai World, said such moves by regulators were discriminatory and would deter him from investing. View

SEC completes review of cross-border tender, exchange offer and business combination rules

30 April 2008

The SEC completed its review of the Commission's cross-border tender, exchange offer and business combination rules, and has prepared recommendations for consideration by the Commission. View

Speech Kuneva: Transformation of European consumer policy law

29 April 2008

Commissioner Kuneva will table “the most far-reaching overhaul of European consumer law in 20 years” in the autumn by presenting a Framework Directive on Consumer Contractual Rights. Speaking in Berlin, the Commissioner on Consumer Affairs said this will simplify, regroup, align and harmonise the Distance Selling Directive, the Doorstep Selling Directive, the Unfair Contract Terms Directive and the Sales Directive. View

CESR warns about inconsistent application on IFRIC D 24 on Customer Contributions

29 April 2008

In a letter to the chair of EFRAG Stig Enevoldsen, CESR complains that the exposure draft is not clear enough with regards to the underlying economic transactions. “There is a risk that this IFRIC will not result in consistent application of the issue that the IFRIC is supposed to clarify”, CESR states. View

CEA responds on supervision of insurance groups

29 April 2008

CEA is concerned by some parts of the draft advice which would significantly undermine the efficient operation of the Group Support Regime. The CEIOPS draft advice also appears to impose more stringent supervisory requirements on groups operating under the GSR on elements which are not specifically related to the functioning of the GSR regime. View

CEA responds to consultation on proportionality

29 April 2008

The principle of proportionality should apply to the calculation of capital requirements, to the review of the risk management and governance processes as well as to the disclosure requirements, CEA notes. CEA also notes that capital requirements should be risk-based and not be unduly influenced by the size or legal form of the company. View

ECB financial integration report April 2008

29 April 2008

The report finds that the degree of integration varies considerably across the different market segments, depending also on the degree of integration of the respective market infrastructure. The report also provides “Special Features” which include in-depth assessments of selected topics. View

US Treasury Nason on expanding bank-like regulation to a wider range of firms

29 April 2008

Expanding bank-like regulation to a wider range of firms could lead to risk-taking decline or a false sense of security, Assistant Secretary David Nason said. “Both of these outcomes are unattractive”, he said. “But so is the status quo. Change, in one form or another, is likely to come.” View

FT: Ratings agencies slam guarantee proposals

29 April 2008

Guaranteeing the quality of information used to assign credit ratings on structured finance securities would be “overly burdensome and redundant”, several leading ratings agencies have told regulators. The comments come as financial regulators are drawing up a new code of conduct for the industry, which is facing calls for tougher supervision after mortgage-linked securities awarded high credit ratings have suffered heavy losses. View

IPE: Polish payout system in sight

29 April 2008

The Polish ministry of labour and social policy has submitted two bills to the government for approval to establish a payout system for Polish private sector pensions. The two bills have gone to the cabinet for approval but are written to allow the programmed withdrawal as well as annuities from funded pensions, as well as establish the creation of annuity providers. View

LCH.Clearnet and DTCC reported to be in merger talks

29 April 2008

European clearing house LCH.Clearnet has held merger talks with US counterpart Depository Trust & Clearing Corporation (DTCC) about a possible merger that would create the first transatlantic provider of post-trade services, the Financial Times (FT) reported, citing unnamed sources. View

Commission report calls payment fraud a threat to payments market

28 April 2008

The ‘de facto’ shift of payment card fraud towards remote situations is increasing in Europe and is considered to constitute the highest threat for payment cards. The report shows that the security of means of payment and payment systems is a necessary condition for improving consumer confidence and trust in new payment services. View

CML urges Commission to shelve mortgage proposals

28 April 2008

The Council of Mortgage Lenders has urged the Commission to shelve its White Paper proposals on the integration of EU mortgage markets. The CML says that conditions have changed so much in that it would make no sense to proceed. View

ECB TARGET annual report 2007

28 April 2008

The ECB report shows a significant increase in TARGET business in both volume and value terms. The report provides information on TARGET payment business and the system’s robustness, resiliency and oversight. View

MLex: VIG's Erste Bank insurance acquisition could throw off divestiture remedy

28 April 2008

Horizontal overlaps in Austria and Romania will be at the core of the European Commission's merger review of Vienna Insurance Group's acquisition of Erste Bank's insurance operations in Central and Eastern Europe. The 1.4 billion euro deal will also provide the Commission with an opportunity to review product market definition in the insurance sector. View

CEA position on own funds in Solvency II

28 April 2008

EU and China start high-level economic dialogue

28 April 2008

The European Commission and the Chinese government launched the EU-China High-Level Economic and Trade Dialogue Mechanism in Beijing. Proposed by the Chinese authorities and agreed at last year's EU-China summit, the mechanism aims to ease trade tensions and enhance co-operation. View

Spring economic forecast 2008-2009

28 April 2008

The Commission's spring forecasts are relatively optimistic with a moderated growth of 2% in 2008 and 1.8% in 2009. The moderation in growth results from the persisting turmoil in the financial markets, the marked slowdown in the United States and soaring commodity prices, all of which are taking their toll on global activity, the Commission states. View

AMF initial assessment and 2008-09 work agenda

25 April 2008

The document addresses the first year results of the “better regulation” approach, the internal reforms at the AMF, the extent of results already achieved, the next steps in 2008, and the two-year financial regulation agenda. View

FESE calls to investigate role of private markets during credit crises

25 April 2008

Recent events indicate the need for a re-adjustment of focus in the public policy discussion on the question of public versus non-public market models, the treatment of different asset classes and their role in the capital-formation process, FESE states, questioning whether alternative, private markets cope as well in bear markets as regulated, public markets. View

AMF Risk and Trend Mapping No 5

25 April 2008

The AMF issued a comprehensive report on risks and trends in financial markets and the market for savings and investment. The report has been updated amid the major upheavals that have rocked financial markets since summer 2007. View

Joint Forum 'risk concentrations paper' underlines integrated management approach

25 April 2008

It is especially important for those firms with a significant presence in the risk transfer markets to have an integrated risk concentration management approach across risk categories, the Joint Forum states. All business lines and relationships need to be evaluated and a firm-wide view of exposures is necessary to capture potential concentrations, the paper says. View

Watanabe pushes U.S. to fix credit crisis

25 April 2008

Financial services minister Yoshimi Watanabe is urging Washington to inject public money to fix the problem before it gets worse. In an interview on Wednesday, Yoshimi Watanabe used unusually blunt language to warn that drastic action was needed to address the crisis that has battered global markets. View

Fed welcomes investments by SWFs

24 April 2008

The Federal Reserve welcomes the investments by foreign sovereign wealth funds in US banks and other financial institutions in distress from the recent market turmoil and does not see them as a threat to the US banking system, Scott Alvarez, Fed General Counsel, said before the US Senate. View

Plenary Meeting 21-24 April

24 April 2008

Parliament adopted the report on IFRS and the governance of the IASB prepared by Alexander Radwan. MEPs are calling for improvements to the governance of the International Accounting Standards Board and the International Accounting Standards Committee Foundation to address concerns that they may lack transparency and accountability. View