We are focussed on the big themes for the next legislative period and are targeting the interaction of the driving forces of politics and economics as they force the required changes in over-arching financial regulation, thus promoting greater financial integration in Europe. Naturally, these factors include ESG and Fin Tech. Details of these services are here

The 158th Brussels 4 Breakfast was particularly rumbustious as the expert audience tried to pin down the UK's negotiation team and wish-list - in contrast to the clartiy about to be provided on the EU side. The notes are here and the video of the 49th Brussels 4 Brunch at CISI is here. Unusually, I recorded my opening comments explaing the process of creating a trade deal with the EU -  the podcast is available here.

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Articles from 16 January 2020 - 23 January 2020

General Policy

AFME and Linklaters publish report on financial services conduct supervision : The report articulates the approach to conduct supervision taken by financial regulators in France, Germany, Ireland and the Netherlands. View Article

Banking Union

 

 

Financial Times: European Banking Authority plans overhaul of EU bank stress tests : Lenders will have more leeway to police themselves under a planned overhaul of the biennial bank stress tests carried out by the European Banking Authority.  View Article

BIS: Margarita Delgado: The European Banking Union : Speech by Ms Margarita Delgado, Deputy Governor of the Bank of Spain, in which she delves into what the SSM has meant for supervisors and for the functioning of the European banking sector. Then she goes beyond the SSM and talks about the European Banking project.  View Article

BIS international banking statistics at end-September 2019 : Global cross-border bank claims continued to expand rapidly. As in previous quarters, the expansion was mainly due to claims on the nonbank sector. European banks’ cross-border lending, which went through a prolonged contraction after the Great Financial Crisis (GFC) of 2007–09, has been expanding again since the start of 2018.  View Article

ECB: January 2020 euro area bank lending survey : Credit standards remained broadly unchanged for both loans to enterprises and housing loans. Demand for loans to enterprises declined, while demand for housing loans increased further. Euro area banks use TLTRO-III liquidity largely for granting loans. View Article

Bank of England: Next steps for LIBOR transition in 2020: the time to act is now : The Bank of England, the Financial Conduct Authority (FCA) and the Working Group on Sterling Risk-Free Reference Rates (RFRWG) have published a set of documents, outlining priorities and milestones for 2020 on LIBOR transition.  View Article

EBF’s views on the evaluation of the Payment Accounts Directive : EBF notes that the recent transposition deadline of the Directive means that its complete impact and capabilities have still to fully unfold and it is impossible, at this point in time, to have a full assessment of the impact of the Directive in the market.  View Article

Capital Markets Union

AMIC and EFAMA update their report on managing fund liquidity risk in Europe : The updated report shows that since 2016, the EU regulatory framework has been further enhanced following the adoption of new rules and standards. View Article

IPE: Pension funds increase slice of lending market as shadow banking slows : A major international financial stability report shows that shadow banking slowed in 2018, and reveals pension funds as the fastest-growing extenders of credit in that year. View Article

ESMA consults on the use of No Data options in securitisation reporting : The consultation’s objective is to help market participants and securitisation repositories to understand ESMA’s expected maximum use of No Data options contained within a securitisation data submission. View Article

Insurance Europe: EIOPA draft Solvency II review advice would hinder, not help EC ambitions for Europe : Insurance Europe has published its “Ambitions for Europe”, in which it sets out policy suggestions on four topics that reflect some of the key objectives of the new European Commission. View Article

EBF responds to the PRIIPS KID review joint consultation : On behalf of the European banking sector, the EBF has submitted its comments to the European Supervisory Authorities (ESAs) on the consultation paper setting out proposed amendments to the PRIIPs Delegated Regulation. View Article

ALFI: Pension funds beyond their borders : Low interest rate environments in many developed nations, alongside increasingly volatile equity markets, are leading pension funds to adapt their investment strategies. In their search for yield, many are looking outside their borders as well as investing in alternatives, according to a new report by the Association of the Luxembourg Fund Industry (ALFI) produced by PwC Luxembourg. View Article

Environmental, Social, Governance (ESG)

IFAC: Urgent call for improved UN Sustainable Development Goals disclosures : Leading accounting bodies and other organisations have called for corporate and asset owner action and improved reporting on the UN’s Sustainable Development Goals (SDG) in an attempt to hit goals set for 2030. The recommendations are detailed in the report, Sustainable Development Goals Disclosure (SDGD) Recommendations. View Article

IIRC: New integrated thinking model underpins leaders’ vision for a more sustainable world : The IIRC presents a new model for integrated thinking at the World Economic Forum. This model encourages long term, sustainable decision-making, enabling businesses to play their roles as stakeholders of a sustainable world. View Article

Global Reporting Initiative: Corporate accountability at Davos a ‘step in right direction’ : With global leaders gathered in Switzerland for the World Economic Forum (WEF), GRI is pressing for action and commitments that support the transition to sustainable and responsible business. View Article

FRC: Investors call for improved workforce reporting : Reporting on workforce-related issues needs to improve to meet investor needs and reflect modern-day workforces according to a new report from the FRC’s Financial Reporting Lab. View Article

WBCSD: First self-assessment framework to measure business’ circular performance : At the World Economic Forum Annual Meeting in Davos, the World Business Council for Sustainable Development (WBCSD) launched the Circular Transition Indicators (CTI) framework and the accompanying free online tool. View Article

BIS: The green swan: Central banking and financial stability in the age of climate change : Climate change poses new challenges to central banks, regulators and supervisors. This book reviews ways of addressing these new risks within central banks' financial stability mandate.  View Article

IPE: UK standards body unveils first sustainable finance output : BSI, the UK’s national standards body, has released the first output of a five-year programme to help define globally applicable sustainable finance standards for the financial sector. View Article

Bloomberg: Quants say they can make investing more sustainable : Data on climate risk and social issues can be spotty, but algorithms try to fill in the gaps. View Article

Bank of England: Mark Carney appointed by Prime Minister as finance adviser for COP26 : The Bank of England Governor, Mark Carney, has been appointed as the Prime Minister’s finance adviser for COP26 (UN Climate Change Conference) to help build a sustainable financial system to support the transition to a net zero economy.  View Article

Protecting Customers

European Forum of Securities Associations paper calls for recalibration of MiFID 2/R : Ahead of the European Commission’s MiFID2/R Review, EFSA published a paper calling for certain areas of regulation to be recalibrated in order to deliver its intended policy outcome of establishing a more transparent financial system that works to the benefit of the economy and society as a whole. View Article

Fin Tech Regulation

ECB: Central bank group to assess potential cases for central bank digital currencies : The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS), have created a group to share experiences as they assess the potential cases for central bank digital currency (CBDC) in their home jurisdictions. View Article

ESBG response to Commission consultation on a roadmap for a European crypto-assets markets framework : ESBG supports the establishment of an EU regulatory framework for crypto-asset markets as a key priority; especially as crypto-assets are currently not covered by current EU-legislation. View Article

BBC: Vodafone quits Facebook's Libra currency : In October, the world's biggest economies warned cryptocurrencies such as Libra pose a risk to the global financial system. Vodafone has become the latest company to leave Facebook's digital currency project, Libra. View Article

POLITICO: Alphabet, Google CEO: Artificial intelligence needs to be regulated : Alphabet and Google CEO Sundar Pichai called for artificial intelligence to be regulated. While AI promises enormous benefits for Europe and the world, there are real concerns about the potential negative consequences of AI. View Article

Bank of England: How reliant are banks and insurers on cloud outsourcing? : As the business models of banks and insurers become more cloud-focused, regulators need to adapt too. Banks and insurers were surveyed to understand how they use the cloud. The results are helping to shape regulatory approach. View Article

POLITICO: Hack-proofing the EU’s banks : When European leaders, back in 2012, embarked on an ambitious plan to create a truly pan-continental financial system, they overlooked one important detail: how to protect it from cyberattacks. View Article

Friends' Standard Services

49th Brussels for Brunch Webinar January 2020 : Video of the 49th Brussels 4 Brunch. View Article

8 minute podcast to explain the process of creating a trade deal with the EU : Graham Bishop explains briefly the process the UK will have to go through to build its new trade deal with the EU once it has left the bloc. View Article

Economic Policies Impacting EU Finance

Main results - Economic and Financial Affairs Council : The Economic and Financial Affairs Council discussed digital taxation and the European Green Deal. It also kick-started the 2020 European Semester exercise. View Article

Main results - Eurogroup : In regular format, the Eurogroup discussed the euro area recommendation proposed by the European Commission. In inclusive format, ministers exchanged views on the organisation of the further work on the deepening of the Economic and Monetary Union (EMU). View Article

POLITICO: EU trade chief: Effort to ease tensions with US off to ‘good start’ : European Trade Commissioner Phil Hogan said he was optimistic that the United States and the European Union could work together on trade even though he received no promises that the Trump administration would hold off on adding tariffs on about $10 billion worth of European goods. View Article

POLITICO: Von der Leyen: Trade deal with America ‘in a few weeks’ : European Commission President Ursula von der Leyen today said she wanted to strike a trade agreement with the United States "in a few weeks," according to German press agency DPA. View Article

New Europe: EU-US tensions could impact global growth, says IMF : Ahead of the World Economic Forum 2020 in Davos, Switzerland, the International Monetary Fund’s managing director Kristalina Georgieva presented the updated economic outlook. View Article

City AM: IMF warns growing inequality could cause a new financial crisis : The head of the International Monetary Fund has called on the world’s financial sector to address near-record levels of inequality within countries that could be a harbinger of a new financial crisis. View Article

ECB's Lagarde: Frankfurt and Europe in a new decade : ECB President Christine Lagarde praised the benefits that European integration has brought about for Europeans internally, and how much more the EU can achieve externally if Europeans cooperate in the right way. View Article

The New York Times: France says US would consider multinational plan for digital taxes : France’s finance minister, Bruno Le Maire, said the United States and France had reached a broad framework for using a plan that was being developed by the Organization for Economic Cooperation and Development to set digital taxes, but further talks were needed. View Article

Global Reporting Initiative: Rising global tax scrutiny shows the case for change : The increasing number of inquiries into the tax practices of corporations demonstrates why a transition towards transparent tax disclosure is urgently required, said Elise J Bean, former United States Senate tax investigator. View Article

Basic Enconomic Indicators

Annual inflation up to 1.3% in the euro area : The euro area annual inflation rate was 1.3% in December 2019, up from 1.0% in November. View Article

EU27 Politics

 

Ursula Von der Leyen - EPC

 

Shaping the Conference on the Future of Europe : The European Commission set out its ideas for shaping the Conference on the Future of Europe, which should be launched on Europe Day, 9 May 2020 and run for two years.  View Article

Carnegie Europe: Can Europe be a catalyst for democratic innovation? : The EU could benefit from tapping into the smart ideas behind its many successful local projects, and then adapting them to benefit other member states, writes Stephen Boucher. View Article

Project Syndicate: Finding Europe’s way in the world : Europe has long resided in the strategic shadow of the US, which itself has underwritten decades of globalization and rapidly expanding prosperity. But the global balance of power is rapidly shifting, leaving Europe increasingly exposed, write Sigmar Gabriel and Michael Hüther. View Article

EurActiv: EU must step up Single Market enforcement, states tell Commission : The European Union must step up the application and enforcement of Single Market law or risk losing ‘credibility and effectiveness’, according to a leaked paper to the EU executive signed by 14 member states. View Article

EurActiv: Von der Leyen vows a green, digital, geopolitical EU in Davos : Ursula von der Leyen made her international debut as the European Commission chief as she set out her political agenda before the global economic elite at the World Economic Forum. View Article

Financial Times: Imminent UK Brexit unleashes new EU dynamics : Britain’s departure will mark the end of an agony that long eclipsed other important matters for the EU’s remaining 27 members. But the shift of power is making experts worry that the bloc’s foreign policy may become softer on Russia. View Article

Financial Times: Angela Merkel warns EU: ‘Brexit is a wake-up call’ : In an exclusive FT interview, Germany’s chancellor says the bloc must be more competitive. View Article

POLITICO: Parliament picks Verhofstadt for new president role : Liberal MEP Guy Verhofstadt will become president of the “Conference on the Future of Europe,” an exercise to consider how the EU should be reshaped, according to a deal between European Parliament leaders. View Article

POLITICO: After Brexit, populists set to outnumber Greens in European Parliament : The departure of 73 British MEPs will consequently lead to an increase in representatives from the Eurosceptic Identity and Democracy (ID) group, surpassing the Greens' new total of seats to become the fourth-largest force in the hemicycle. View Article

 

Graham Bishop #FBPE retweeted
	The Independent @Independent
EU says Brexit trade deal needs power to fine UK if it breaks rules independent.co.uk/news/uk/politi…
Graham Bishop #FBPE retweeted
	City A.M. @CityAM
Exclusive: UK to start US trade talks before EU discussions dlvr.it/RNW9vp pic.twitter.com/JTOV0Plhsh
Graham Bishop #FBPE retweeted
FT Brussels" src="https://pbs.twimg.com/profile_images/931157406360449024/uendSDG1_normal.jpg" />	FT Brussels @ftbrussels
UK faces fines if it breaks post-Brexit EU trade rules on.ft.com/2R8EHOx
Graham Bishop #FBPE retweeted
	City A.M. @CityAM
Chancellor Sajid Javid warns business 'there will be no alignment' with EU on regulations dlvr.it/RNGyVV
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	POLITICO Europe @POLITICOEurope
"The more reasonable are the demands of the U.K., the more reasonably we can agree," warns Amélie de Montchalin politi.co/36075H0
Graham Bishop #FBPE retweeted
FT Brussels" src="https://pbs.twimg.com/profile_images/931157406360449024/uendSDG1_normal.jpg" />	FT Brussels @ftbrussels
Angela Merkel warns EU: ‘Brexit is a wake-up call’ on.ft.com/2Tu8qTx
Graham Bishop #FBPE retweeted
FT Brussels" src="https://pbs.twimg.com/profile_images/931157406360449024/uendSDG1_normal.jpg" />	FT Brussels @ftbrussels
Boris Johnson accused of ‘brinkmanship’ by EU trade chief on.ft.com/2FTWd2u