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27 September 2012

This week in "Brussels"
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Articles from 20 September 2012 - 27 September 2012

Banking

EP/EMU: Banking union explained
MEPs are determined to tackle the issue quickly as it is seen as an essential anti-crisis measure, and they insist that the future EU supervisory system should be transparent and under democratic control. This is an introduction to what the banking union is all about.  View Article
Banking union: Economic Affairs Committee starts work on supervision proposals
Although the banking supervision legislation debated in detail in the ECON Committee was rather less warmly received than many other Commission proposals, MEPs nonetheless stressed the urgent need for it and pledged to strive to meet their tight deadline.  View Article
Initial statement by EBA/Enria at the annual public hearing of the chairpersons of the three ESAs
The Banking Union will have an impact on the responsibilities of the EBA as it will call on the whole Union for an even stronger commitment to the Single Rulebook, and for a leap towards truly unified supervisory methodologies to assess the risks at banks and to trigger corrective actions.  View Article
VoxEU: Banking integration - Friend or foe?
Is a banking union the answer to Europe's woes? This column by Sebnem Kalemli-Ozcan and Elias Papaioannou argues that banking union is no panacea – and it may actually make monetary policy harder. It urges Europe's policymakers to re-evaluate their proposals.  View Article
ECON Committee: Libor needs trust, transparency and integrity, but regulation too, say MEPs
The Libor benchmark needs to rebuild trust and integrity but also needs to be regulated, said Commissioners Barnier and Almunia, MEPs and other financial experts at the ECON Committee hearing on the manipulation of interbank lending rates. (Includes link to Barnier speech.)  View Article
Bloomberg: Libor scandal shows need for EU Market Abuse Law, says Barnier
EU regulators are also investigating possible breaches in cartel rules from both banks and brokers in the setting of Libor, Joaquin Almunia, the EU's competition commissioner, said in his testimony to the European Parliament.  View Article
WSJ: British banks step back from Libor role
The British Bankers' Association is preparing to give up responsibility for the London interbank offered rate, or Libor, the scandal-plagued benchmark interest rate that the group once called "the world's most important number".  View Article
FT: US regulator calls for faster Libor reform
The top US regulator overseeing the derivatives market has questioned the accuracy of a benchmark interest rate and has argued for quicker reforms, potentially putting him at odds with fellow regulators in the US and Europe.  View Article
European Parliamentary Financial Services Forum (EPFSF) publishes "Crisis Management" Briefing
It will be essential to avoid imposing multiple repetitive or inconsistent requirements on cross-border institutions, and to ensure authorities' cooperation and coordination to facilitate the delivery and execution of efficient and reliable recovery and resolution plans.  View Article
EBF Position on European Commission proposals for Bank Recovery and Resolution Directive
EBF welcomes the EC's proposals for a Recovery and Resolution Directive and is pleased to see that it is closely based on the Financial Stability Board's Key Attributes of Effective Resolution Regimes for Financial Institutions. EBF provides its views and suggestions.   View Article
BIS: Results of the Basel III monitoring exercise as of 31 December 2011
The study is based on rigorous reporting processes set up by the Committee to review periodically the implications of the Basel III standards for financial markets.  View Article
BIS: Locational and consolidated banking statistics
The Bank for International Settlements published quarterly statistics: Locational banking statistics and Consolidated banking statistics.  View Article
Bundesbank/Dombret: Business models and the banking sector seen in terms of financial stability
In his speech, Dombret said that the best regulatory solution for the "too big to fail" problem was the credible threat of an institution's orderly market exit. "If we solve the too big to fail problem, there will then be no reason to forgo the advantages of universal banks."  View Article
ALFI's position on the draft report of the EU Parliament on Shadow Banking
The European Parliament issued on August 14th 2012 a draft report by MEP Saïd El Khadraoui on Shadow Banking. ALFI's position paper on this draft report focuses on the matters that are of particular relevance for the industry.  View Article
TSC calls for written evidence on the distributional effects of quantitative easing
As part of its continuing scrutiny of monetary policy, the Treasury Committee called for written evidence in response to the Bank of England's paper, 'The Distributional Effects of Asset Purchases'. Evidence should be submitted by 1 November, 2012.  View Article
Commission VP Almunia: New rules for finance - Putting the genie back in the bottle
At the public hearing on tackling the culture of manipulation, Almunia stressed that banks were not the root of all evil, and that the financial and economic evolution of the past three decades was not an inexorable law of nature.  View Article
Commission VP Almunia: Competition enforcement in the knowledge economy
Speaking at Fordham University in New York City, Almunia said that the banking sector needed a change of culture, and that competition control – together with the enforcement of financial service rules and new legislation – could help it happen.  View Article
Bruegel/Pisani-Ferry: Central banks on the offensive?
It looks like a coordinated offensive from the ECB, the Fed and the Bank of Japan, comments Pisani-Ferry. However the reality is that there is no common stance, let alone a common plan.  View Article
Hildebrand/Sachs: Eurozone should fix its banks US way
Writing for the FT, the authors propose that the biggest eurozone banks should be required to meet Basel III capital standards not gradually by 2019 but by the end of 2013, following a rigorous and credible validation of their balance sheets.  View Article

Securities

Financial trading rules: Economic Affairs Committee MEPs outline reform plan
Investors would have to be offered financial products that are tailored to their needs so they should be less likely to be misled, under new uniform trading rules unanimously approved by the ECON Committee.  View Article
'We need to put the brakes on high-frequency trading', say S&D Euro MPs
S&D MEPs have backed new measures to regulate trading of financial instruments and in particular high-frequency trading. According to the compromise struck in the European Parliament's ECON committee in Brussels, orders will have to remain in the trading books for at least 500 milliseconds.  View Article
ALDE/Schmidt: Parliament to approve stronger safeguards for investors in financial products
"After the financial crisis, there is a need to increase confidence in the financial markets. There is still a great lack of trust among citizens in financial institutions", said ALDE spokesperson Olle Schmidt MEP, ahead of the vote on the review of MiFID.  View Article
BIS publishes statistics on securities markets
On 17 September, the Bank for International Settlements published the following statistics: Securities statistics and syndicated loans; Statistics on exchange traded derivatives; and Semi-annual OTC derivatives statistics at end-December 2011.  View Article
IOSCO Joint Forum releases Principles for the supervision of financial conglomerates
The Joint Forum issued its final report on Principles for the Supervision of Financial Conglomerates. The Joint Forum addresses issues common to the banking, securities and insurance sectors, including the regulation of financial conglomerates.  View Article
IMA against resolution powers for all investment firms but supports legislation for CCPs
In its response to HM Treasury on the 'Financial Sector Resolution: Broadening the Regime Consultation', the Investment Management Association (IMA) disagrees with the extension of resolution powers to all investment firms.   View Article
FT: London regulation pushes debt deals away
Some large companies are looking to shift debt issuance programmes away from London to avoid a stricter interpretation of new European rules than can be found elsewhere.  View Article

Insurance

Insurance Europe: Impact assessment results should be reflected in Omnibus II
Insurance Europe, the European insurance and reinsurance federation, welcomes the fact that the results of the impact assessment on measures to deal with long-term guarantee issues in Solvency II are expected to be known before the Omnibus II text is finalised.  View Article
EIOPA and FINMA sign a Memorandum of Understanding
The European Insurance and Occupational Pensions Authority (EIOPA) and the Swiss Financial Market Supervisory Authority (FINMA) have signed a Memorandum of Understanding aiming to ensure optimal supervision of insurance groups with international activities in the EEA and Switzerland.  View Article
ABI issues guidance three months ahead of gender-neutral insurance pricing
With three months to go until the European Court of Justice ban on insurers taking a person's gender into account when calculating premiums and benefits, the Association of British Insurers has published guidance for consumers.  View Article
CRE: EU may now delay Solvency II until 2015, following proposal from Barnier
The European Union may once again postpone the introduction of Solvency II and move its start date back from 2014 to 2015, according to reports and industry analysts. Michel Barnier, the European commissioner responsible for the capital adequacy regime, reportedly proposed the further delay.  View Article
CRE: Solvency II to bring less service and more costs, global programmes not up to scratch says IFRIMA boss
The IFRIMA president has labelled Solvency II a negative development for risk managers, as it will result in insurance companies providing less service at higher costs. He has also criticised the insurance market for not providing the service that buyers need for their global insurance programmes.  View Article
Risk.net: UK insurers behind schedule on Solvency II data requirements
The Financial Services Authority highlights problems with data control, ownership and validation. UK insurance firms are continuing to struggle with the data requirements imposed by Solvency II.  View Article
Airmic backs Law Commission over disclosure rules
Airmic, the UK-based association for risk managers, has given its strong backing to Law Commission plans to reform the legal framework covering commercial insurance. Meanwhile, a survey of Airmic members has found that more than 95 per cent of respondents agree that there should be change.  View Article
CRE: Most European risk managers say multinational insurance programmes not meeting growing demands
More than half of European companies say that transacting international business is more risky today than five years ago, with only 13 per cent believing they have a multinational insurance programme that meets their global needs, according to new research by ACE.  View Article

Asset Management

ESMA publishes a Q&A on KIID for UCITS
The purpose of this document is to promote common supervisory approaches and practices in the application of the UCITS Directive and its implementing.  View Article
EFRP publishes position paper on the EC White Paper on Pensions
In the document, the European Federation for Retirement Provision (EFRP) not only reacts to the White Paper proposals, but also addresses what it believes should be the EU's priorities in the pensions area for the coming years.  View Article
OECD: Pension fund assets at record high but investment returns negative in 2011
Pension fund assets in OECD countries hit a record $20.1 trillion in 2011 but return on investment fell below zero, with an average negative return of -1.7 per cent, according to the OECD's latest Pension Markets in Focus report.   View Article
IPE: Pension asset-to-GDP ratios for OECD countries up 5 per cent over decade
Occupational pension funds account for close to 73 per cent of GDP in OECD countries, up 5 percentage points in a decade, according to a report.  View Article
IPE: DWP stands by 'absolutely critical' state pension reforms
The UK government remains "committed" to the introduction of a single-tier state pension, according to the Department for Work and Pensions (DWP), despite reports that the prime minister has raised concerns ahead of the publication of the White Paper on state pension reform.  View Article
ECMI/CEPS Task Force: Supporting long-term investing and retirement savings
The purpose of this Task Force is to bring together a diverse group of stakeholders and deliver a list of policy recommendations to strengthen both (a) the single market for long-term savings, including private retirement savings, and (b) long-term investing in Europe.  View Article
IPE: Brussels aiming to launch QIS for IORP Directive by mid-October
The European Insurance and Occupational Pensions Authority (EIOPA) is planning to send its advice on the launch of the quantitative impact study (QIS) for the revised IORP Directive to the European Commission by the end of this month, with the aim of launching the impact exercise by mid-October.  View Article
Hedgeweek: Private equity funds and the AIFM Directive
Malta has become an attractive jurisdiction for funds, due in part to the flexible regime for professional investor funds ("PIFs"). Under this regime, private equity funds are structured as PIFs.  View Article
IMA director speaks out at FSA asset management conference
The Investment Management Association's Director of Wholesale, Guy Sears, spoke at the FSA's Asset Management conference on the implementation of regulations, highlighting how key issues for asset managers arise from the way in which banks and other firms themselves implement changes.   View Article
FSA Wheatley: My vision for conduct regulation and how it will affect asset managers
Mr Wheatley highlighted some of the issues in the sector, notably charges, competition and the gap between asset managers and the end consumer. He also explained what changes were being made in preparation for the changeover to the FCA – this change will mean a new type of regulator for the firms.  View Article

Corporate Governance/Accounting

FRC: Financial Reporting Review Panel's annual report 2012
The FRC published a report of the findings of the Financial Reporting Review Panel (FRRP) in relation to its review of reports and accounts in the year to 31 March 2012 - 326 sets of accounts were reviewed and 130 companies were approached for further information or explanation.  View Article
EFRAG commented on the proposed IASB and IFRS Interpretations Committee Due Process Handbook
EFRAG published its final comment letter on the proposed IASB and IFRS Interpretations Committee Due Process Handbook.  View Article
Françoise Flores, EFRAG Chairman: Turning a compliance exercise into a communication performance
EFRAG Chairman Françoise Flores spoke at FEE's 'Corporate Reporting of the Future' conference on promoting effectiveness of disclosures to financial statements as a contribution towards better integration of various corporate reports.  View Article
IASB: A Guide through IFRS 2012 (Green Book)
The IFRS Foundation published an updated version of 'A Guide through IFRS 2012 (Green Book)'. The new edition includes the official pronouncements issued by the IASB as at 1 July 2012, with extensive cross-references and other annotations.   View Article
ACCA: Reform of audit - No status quo but more transparency, quality and independence
A recent ACCA/ecoDa event at the European Parliament discussed the various proposals linked to audit quality and transparency, as well as those targeting independence and market structure. General consensus holds that any reform needs to improve transparency and audit quality.  View Article

Financial Services Policy

IMCO Committee: Member States must stop dragging their feet, say single market MEPs
EU citizens still do not benefit fully from the single market, said MEPs in a resolution adopted on Tuesday. They point to difficulties i.a. in opening bank accounts and having professional qualifications recognised.  View Article
Sharon Bowles: Europe negativity risks marginalising UK
MEP and chair of the ECON committee Sharon Bowles has called on the financial services sector to stop being negative about European regulation or risk being marginalised.  View Article
FT: Concerns from the regulation front line
Investment houses are starting to worry that the European funds industry has become a testing ground for financial services regulation. The Key Investor Information Document and the Packaged Retail Investment Products initiative are the two pieces of regulation that rankle the most.  View Article
UK Government publishes consultation on macro-prudential tools for the Financial Policy Committee
A consultation on what tools the new Financial Policy Committee should have in order to help ensure future financial stability was launched by Financial Secretary to the Treasury, Greg Clark. Responses are requested by 11 December, 2012.  View Article




© Graham Bishop

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