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12 September 2013

This week in "Brussels"
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Articles from 05 September 2013 - 12 September 2013

Banking

Plenary Session: Green light for single supervisor for banks
MEPs gave their green light to the EU bank supervision system which will bring some 150 of the EU's largest banks under the ECB's direct oversight from September 2014. They also pushed for a decision-making model for the system which would allow non-eurozone countries to take part as equal partners.  View Article
Plenary Session: Declaration by the Presidents of the EP and the ECB on the SSM
The presidents declared their full support for the draft text of the Inter-institutional Agreement between the EP and the ECB on cooperation on procedures related to the Single Supervisory Mechanism (SSM) agreed between their respective negotiating teams.   View Article
ECB welcomes European Parliament vote to create single supervisory mechanism
"We will do our utmost to put in place all organisational requirements, with the aim of assuming our supervisory responsibilities one year after the legislation enters into force", said ECB president Draghi.  View Article
S&D: "A true Banking Union is vital to protect taxpayers and depositors"
S&D spokeswoman Elisa Ferreira said that placing European banks under the supervision of the ECB was a major step towards true transparency in the banking world, but it was "far from enough".  View Article
EPP: EP gives final go ahead to European banking supervision
Marianne Thyssen MEP, Rapporteur on the Regulation that establishes a Single Supervisory Mechanism for the banking sector, underlined the importance of a strict democratic control over the ECB as the new banking supervisor.  View Article
ECB/Mersch: Monetary policy and financial stability under one roof
In his speech, Mersch looked at the changes taking place under the roof of the ECB, specifically the ECB's taking over responsibility for elements of micro- and macro-prudential supervision in the euro area.  View Article
President Barroso: State of the Union address 2013
In his annual speech, Barroso said that Europe must move ahead with its Banking Union project to help the region exit an economic and debt crisis whose end was now "within sight".  View Article
Barnier: The time for self-regulation and deregulation has come to an end
In an interview with EurActiv, Commissioner Barnier discussed his vision for a debate on the future of Europe, and stressed the need to press on with the completion of the Banking Union.   View Article
Reuters: IMF chief says bank union needs to be completed quickly
IMF chief Christine Lagarde urged eurozone governments to make quick progress on their proposed Banking Union, in order to put the bloc's crisis definitively behind it.  View Article
BoI/Visco: The exit from the euro crisis – Opportunities and challenges of the Banking Union
"The key to success will be a shared determination to advance towards a fully-fledged European Union. In the current stage, the test of our resolve is the building of an effective Banking Union."  View Article
Bloomberg: Dijsselbloem backs Barnier on bank resolution, notes conflicts
The European Commission's proposal for a single European resolution authority for failing banks is "defensible", though potential conflicts of interest must be prevented, Dutch Finance Minister Jeroen Dijsselbloem said.  View Article
Capital requirements could rise as 'Basel 4' starts to emerge, says KPMG
Even though the original implementation deadline for Basel 3 is still a far-distant 2019, we are already starting to see the emergence of 'Basel 4', according to KPMG – which could see the UK's eight largest banks having to hold £50 billion more capital, according to KPMG's best estimates.  View Article
FT: Vickers calls for doubling of bank capital levels
The chief architect of Britain's post-crisis regulatory reforms believes banks' capital levels should be at least twice as high as the level recommended two years ago by the government-appointed commission he led.  View Article
Mark Carney: A plan to finish fixing the global financial system
Writing for the FT, Carney says that banks, in aggregate, are on track to meet Basel III requirements but that some lenders are struggling and regulators have more work ahead.  View Article
FN: Bankers attack one-size-fits-all plan for risk-weighted assets
Senior bankers fear that efforts by regulators to create a one-size-fits-all calculation of risk-weighted assets are doomed to failure.  View Article
EPC: ECB publishes qualitative SEPA indicators for the second quarter of 2013 to assess SEPA progress by stakeholder groups at country level
The ECB published updated qualitative SEPA indicators to assess SEPA preparedness across the transaction chain in each country. The qualitative indicators measure the level of SEPA preparedness by stakeholder groups at country level.  View Article

Securities

Statement by Commissioner Barnier on the EP's endorsement of the political agreement on new European rules for market abuse
"With this agreement, the European Parliament has made a decisive contribution to the fight against insider dealing and market manipulation", said Barnier.  View Article
"Clamping down on Libor but do not forget Euribor" – warns Bowles
"Greed turned to fraud with Libor and Euribor-rigging but the Market Abuse Regulation is now couched in much wider terms so that there will be more certainty over being able to punish such offences", said Ms Bowles.  View Article
S&D: EU acts to close Libor loophole in market abuse rules
Arlene McCarthy, the lead negotiator on the market abuse law, said: This law closes the gap and sends a clear signal that the EU is not a soft option or safe haven for perpetrators of market abuse".  View Article
OTC Derivatives Regulators Group: Report to the G20 Heads of State summit of 5/6 September 2013
The ODRG published its report on agreed understandings to resolving cross-border conflicts, inconsistencies, gaps and duplicative requirements.  View Article
EBF: Third country application of EMIR
In a letter to Michael Barnier, Guido Ravoet said he supported Barnier's continued efforts towards ensuring the coexistence globally of different national and regional derivatives regulations, but expressed concerns about the third country application of EMIR.  View Article
ECB/Cœuré: Four years after Pittsburgh - What has OTC derivatives reform achieved so far
In his speech, Cœuré looked at three issues: lack of transparency, the challenges remaining in central clearing, and inconsistencies in cross-border application  View Article
IMA response to ESMA consultation on MiFID holdings
The IMA responded to ESMA's consultation paper on draft RTS on information requirements for assessment of acquisitions and increases in holdings in investment firms (MiFID), identifying key issues with which it has particular concerns.  View Article
EVCA response to ESMA consultation on MiFID holdings
In its reply to ESMA's consultation, EVCA includes a number of general comments as to how the RTS could best be applied to private equity and venture capital fund structures, as well as specific responses to the questions raised within the RTS.  View Article
EFAMA comments on ESMA consultation on MiFID holdings
EFAMA highlighted two issues with ESMA's consultation paper related to the draft RTS on information requirements for assessment of acquisitions and increases in holdings in investment firms (MiFID).  View Article
FECIF comments on ESMA consultation on MiFID holdings
The European Federation of Financial Advisers and Financial Intermediaries submitted its response to ESMA's consultation paper on draft RTS on information requirements for assessment of acquisitions and increases in holdings in investment firms (MiFID).  View Article
ECB modifies loan-level reporting requirements for some asset-backed securities
The Governing Council of the ECB has decided to enhance the loan-level reporting requirements for residential mortgage-backed securities (RMBSs) and ABSs backed by loans.  View Article
FSB completes peer review of the United Kingdom
The peer review examines three topics: macro-prudential policy framework; micro-prudential supervisory approach; and supervision and oversight of central counterparties (CCPs). (Includes comment from George Osborne.)  View Article
CFTC publishes Concept Release on risk controls and system safeguards for automated trading environments
The Concept Release reflects the Commission's ongoing commitment to the safety and soundness of US derivatives markets in a time of rapid technological change, and provides a platform for discussion and analysis of the appropriate responses to such changes  View Article

Insurance

Reuters: EU watchdog still eyes 2016 start for insurance rules
New risk capital rules for Europe's insurance sector could still take effect in 2016, although the timetable for getting them finalised is tight, the head of the EU insurance supervisor EIOPA said on Friday.  View Article
Risk.net: Postponed Omnibus II vote casts doubt on Solvency II 2016 launch
The implementation timetable for Solvency II faces the threat of further delays after the EP key vote on Omnibus II was pushed back by five months.  View Article
Deloitte: Increasing regulation causes strategic paralysis for European insurers
The high costs and challenges for insurers of dealing with new regulations are highlighted in a report from Deloitte, 'Rethinking the response – a strategic approach to regulatory uncertainty in European insurance'.  View Article
Fitch: Returns, not alternative capital, main risk to reinsurers
Traditional reinsurers face a greater near-term threat from low yields and poor investment returns than they do from the wave of alternative reinsurance providers entering the market, Fitch Ratings says.  View Article
CRE: Insurers and customers lock horns over innovation
Innovation, or rather the lack of it from insurers, was the big topic of debate at the opening morning of the DVS Symposium in Munich, as two industry heavyweights clashed in a fundamental debate about how this critical topic could and should be tackled.  View Article
Risk.net: More UK insurers to publish economic capital data next year
Increasing numbers of UK insurers are expected to publish economic capital data over the next 12 months as they seek to prepare investors for risk-based capital reporting. When Solvency II is implemented, insurers will be required to make their Solvency Capital Requirement publicly available.   View Article

Asset Management

Plenary Session: Tougher sanctions for financial markets manipulation
New rules imposing tougher sanctions for manipulating financial markets, insider dealing or abuse of inside information were voted on Tuesday. These rules will also cover a wider range of trading venues and financial instruments, and will apply directly in all Member States.  View Article
Sven Giegold: Shadow banking - Michel Barnier is risking his reputation
The Greens MEP referred to the tabled proposals as disappointing and lacking in scope.  View Article
AGB welcomes Commission's proposals for regulation of shadow banks
Jürgen Fitschen, President of the Association of German Banks, said the Commission's proposals to regulate the shadow banking sector were an important building block for greater stability in the financial sector and presented clear guidelines for the work still to be done.  View Article
Fitch comments on EC's proposed regulatory changes to MMFs
Money market fund regulation proposed by the Commission on 4 September, if adopted, would have far-reaching implications for the €1 trillion MMF industry and cash investors, according to Fitch Ratings.  View Article
ALFI: MMFs play a critical role in the short-term financing markets, and regulation should not put them at risk
ALFI expressed concern over the Proposal for a Regulation of the EP and of the Council on Money Market Funds, unveiled by the Commission on 4 September, 2013.  View Article
OECD: Leaders endorse new G20/OECD principles on long-term investment financing
G20 leaders endorsed an OECD-launched initiative to encourage the flow of institutional investment towards longer-term assets, such as infrastructure and renewable energy projects, in order to strengthen the global economy.  View Article
EIOPA/Bernardino: Creation of a sustainable and adequate pension system in the EU and the role of EIOPA
Bernardino gave an update on the steps EIOPA has been making to achieve a consistent, risk-based supervisory regime for pensions and insurance companies in the EU. He then looked at how he thought EIOPA's mandate could be enhanced.  View Article
EFAMA publishes blueprint for European personal pension products
EFAMA published a report, entitled "The OCERP: a Proposal for a European Personal Pension Product". The Officially Certified European Retirement Plan (OCERP) is intended as a blueprint for a "European brand" of personal pension products to be distributed on a cross-border basis.   View Article
EFAMA: Long-term UCITS continue to register strong net inflows of €65 billion in Q2 2013
EFAMA has published its latest Quarterly Statistical Release which describes the trends in the European investment fund industry during the second quarter of 2013.  View Article
Hedgeweek: Hedge funds see institutional credibility as key element for profitability and growth
New research highlights how nearly 80 per cent of firms see their investment management infrastructure as critical to achieving more efficient operations.  View Article
AIMA publishes enhanced statement of principles
The principles are set out in a new AIMA paper, 'Regulating Capital Markets: AIMA's Policy Principles'.  View Article

Corporate Governance/Accounting

IASB/Hoogervorst: Europe and the path towards global standards
In a speech, IASB chair Hoogervorst began with general observations on the relationship between the EU, the IASB and IFRS, and then talked about the IASB's major projects.  View Article
EBF commented on IASB ED Leases
The EBF cannot support the proposals in the ED, as it does not believe these provide a sound conceptual basis for lease accounting, nor do they offer a significant improvement on current practice.  View Article
FEE commented on IASB ED Leases
FEE supports the IASB's efforts to improve the accounting for leases and continues to believe that a right-of-use model could achieve the objective of increased transparency sought by the IASB.  View Article
ESMA commented on IASB ED Leases
ESMA agrees with the IASB that IAS 17 - Leases fails to provide complete and useful information regarding the financial position of lessees.  View Article
ESMA commented to EFRAG on IASB ED Leases
ESMA provided EFRAG with comments aimed at improving the transparency and decision-usefulness of financial statements and the enforceability of IFRSs.  View Article
EFRAG: Final comment letter on the IASB's ED/2013/5 Regulatory Deferral Accounts
EFRAG does not support this ED because it results in a lack of comparability and it is not limited to facilitating first-time adoption.  View Article
FASB plans to issue ED to improve financial reporting
The FASB voted to issue an ED containing proposals intended to improve financial reporting about public and private development stage entities. The ED is expected to be issued by the end of October.  View Article
IIA: The compliance audit phenomenon - It's all about being risk-centric
Richard Chambers, President and CEO of the Institute of Internal Auditors, shares his personal reflections and insights on the internal audit profession.  View Article
IASB/Finnegan: The long and winding road - The IASB's project on insurance contracts
Patrick Finnegan, a member of the IASB, provided his perspectives on the IASB's proposals for the accounting for insurance contracts, focusing on three principal areas that represent the potential for the most change and complexity for both preparers and investors.  View Article

Financial Services Policy

Plenary Session: Parliament outlines rules to limit risks for home buyers
Home buyers would be better informed about the costs and risks of taking on a mortgage, partly shielded against market swings that inflate their repayments, and better protected if they default on the loan, under new rules provisionally approved by Parliament. (Includes EBF statement.)  View Article
Statement by Commissioner Barnier following the EP vote related to new rules on mortgage credit lending
The EP confirmed its willingness to make the mortgage credit sector subject to heightened consumer protection measures at Union level by approving in principle the new rules on mortgage credit lending.  View Article
Sharon Bowles: "Good news for wannabe home-owners across Europe"
The EP has voted in favour of a new common legal framework for mortgages which will reduce irresponsible lending and make it easier for UK citizens to buy properties abroad.  View Article
ALDE: Mortgage credit - Better protection for home buyers
The legislation sets up the possibility of early repayment and flexibility of the contract instead of one-size-fits-all. Loans contracted in foreign currencies are also addressed, since they have been found to be one of the sources of the problem.  View Article
S&D: Better protection for EU citizens when they take out a mortgage
"This new piece of legislation puts the EU mortgage market in the vanguard. We want a more transparent, safer and more competitive mortgage market with a high level of protection for consumers and a high level of financial inclusion", said MEP Antolín Sánchez Presedo who led the EP's negotiations.  View Article
Reuters: EU lawyers say transaction tax plan may be illegal
A plan to tax financial transactions in 11 Member States from 2014 is illegal, the bloc's lawyers have concluded, dealing what could be a final blow to the measure as proposed. (Includes comments from NAPF and the City of London.)  View Article
"No reason to delay the FTT", say S&D Euro MPs
S&D Euro MPs have urged EU countries to stick to the plan to introduce a financial transaction tax, despite legal objections.  View Article
Insurance Europe: Tax information exchange must be global, not European
As Presidents Barroso and Van Rompuy present the EU's plans for an automatic tax information exchange at the G20 summit, Insurance Europe is calling for any exchange to be global, not regional.  View Article
Bundesbank/Dombret: Competition policy and regulation in a global economic order
Speaking in Düsseldorf, Dombret looked at the relationship between competition policy and regulation in the financial sector. "The good news, as far as I'm concerned, is that the path we have taken to regulate the financial sector is the right one", he said.  View Article

European Council/Parliament

Lithuanian Presidency: Council of the EU presented 2014 budget priorities to the EP
The Council's high priority is given to programmes that encourage economic growth and job creation. The Council also aimed at ensuring the more efficient management of administrative costs and greater EU budget flexibility. (Includes link to Lewandowski statement expressing deep concern.)  View Article

International/G20

G20 Leaders' Declaration: We will work together until regulatory job done
World leaders renewed their determination at the St Petersburg G20 summit to work more closely together and regulate across the financial system to avoid conflicting rules that would crimp economic growth. (This round-up includes statements from VP Rehn, IMF/Lagarde et al.)  View Article
Results of the G20 summit: Joint statement by Presidents Barroso and Van Rompuy
"All G20 members remain determined to implement our ambitious commitments and take further steps on the way to strong and sustainable growth. We are pleased that the European Union's objectives for this summit have been broadly achieved."  View Article
FSB reports to G20 Leaders on financial regulatory reform progress
The FSB published the following documents delivered to G20 Leaders for the St Petersburg Summit: A letter from FSB Chair Carney to G20 leaders; a narrative progress report; an overview report; and a "scoreboard" status report.  View Article

Graham Bishop’s Articles and Speeches

Graham Bishop: President Barroso's State of the Union Message 2013: 'Political Union or Bust'
This note analyses Barroso's speech in three policy areas: politics, finance and economics.  View Article
Graham Bishop's Blog on President Barroso's 2013 State of the Union address
Graham's initial thoughts on the three big messages contained in President Barroso's speech this year.  View Article





© Graham Bishop

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