Welcome to our Gold Friends weekly e-mail.
My highlights of the week: Brexit turned five this week and the British public may regret voting to leave but would not yet vote to re-join despite the growing evidence of the damage – economically, politically, culturally etc. Eurogroup failed to agree the timetable to complete banking union. Progress on nuts and bolts such as the NPL secondary market and cessation of LIBOR. The EU Taxonomy Compass was published – not a neat infographic but a massive spreadsheet that underlined the complexity and scale of `going green’! European Payments Council interviewed SWIFT on their drive to make ISO20022 transform payments – yet again raising the question of what concrete benefits digital currencies will actually bring to citizens.
Graham Bishop
Articles from 18-24 June 2021
General Financial Policy
Remarks by Executive Vice-President Dombrovskis at the ECOFIN press conference : Clinch a compromise on the NPL Secondary Markets proposal; the Commission started to present its assessments of the first Recovery and Resilience Plans; the first fund-raising operation, raising €20 billion and seeing global demand from a wide range of investors. View Article
Remarks by Commissioner Gentiloni at the Eurogroup press conference : .. a few words on the Banking Union, building on what Paschal just said. This is such an important topic for the future of the EMU... it is also a challenging one. We made progress but this agreement needs to be robust, convincing and credible, so we need to keep working and persevering. View Article
ECB's Lagarde: Hearing of the Committee on Economic and Monetary Affairs of the European Parliament : The economic outlook for the euro area; our ongoing strategy review View Article
Commissioner McGuinness: Keynote address at CityWeek 2021: 'The EU's financial services strategy' : The European Union’s financial services policy is often misrepresented in the United Kingdom – and indeed that is sometimes deliberately so....The theme of this year’s City Week – “financing a sustainable global recovery” – is very appropriate. View Article
Vice-President Maroš Šefcovic at the European Parliament Plenary Session on the Future of EU-Swiss Relations : ...This was about establishing a level playing field. This is a matter of fairness and the integrity of our Single Market: anyone operating on the EU Single Market must face the same rules and obligations.... View Article
Conference on the Future of Europe: EP delegation sets out ambitious priorities : At the inaugural plenary session on Saturday in Strasbourg, MEPs set the tone for the Conference Plenary debates to follow. View Article
EPC: Guy Verhofstadt: “Conference on the Future of Europe necessary to put pressure on the EU” : He said that despite the difficulties and delays, it is necessary to have the Conference now "to create a pressure that cannot be denied anymore" and force institutional reform View Article
Banking Union
EURACTIV: Eurogroup fails to agree on a calendar to complete banking union : Eurozone finance ministers (Eurogroup) failed to agree on Thursday (17 June) on a calendar to complete the banking union with a common deposit insurance scheme, as Germany continued to oppose any progress unless member states address other issues, including bank exposure to sovereign debt. View Article
EBA updates on monitoring of Additional Tier 1 instruments and issues recommendations for ESG-linked capital issuances : The updates to this Report reflect (i) the amendments to the Capital Requirements Regulation (CRR2), (ii) the monitoring of the implementation of the EBA Opinion on legacy instruments, and (iii) observations on new market trends, such as ESG-linked capital instruments. View Article
SSM's McCaul: Emerging risks for the European banking sector in the post-pandemic era : This period of unprecedented coordination of supervisory, monetary and fiscal policies which have supported the economy for our citizens is also an opportune moment to identify any risks that are lurking beneath the surface. View Article
SRB publishes approach for notifying impracticability to include bail-in recognition clauses in contracts : Banks are required to include bail-in recognition clauses in relevant contracts under third country law to ensure that the liabilities under these contracts can be bailed in (written down or converted) in the event of resolution. View Article
Capital Markets Union
The European Commission, ECB Banking Supervision, EBA and ESMA encourage market participants to cease all LIBOR settings. : They strongly encourage market participants to use the time remaining until the cessation or loss of representativeness of USD LIBOR, GBP LIBOR, JPY LIBOR, CHF LIBOR and EUR LIBOR to substantially reduce their exposures to these rates. View Article
IA: Investors say collective efforts must be intensified as final stage of LIBOR-linked bond transition approaches : The Investment Association (IA) and its members have emphasised the need to address the large number of outstanding LIBOR-linked bonds which have still not yet transitioned to a new rate, despite the rapidly approaching deadline. View Article
European Commisssion: Targeted consultation on improving transparency and efficiency in secondary markets for non-performing loans (NPLs) : The Commission seeks views of a wide range of stakeholders directly or indirectly participating in NPL secondary markets, including NPL sellers, NPL purchasers, credit institutions, asset management companies and intermediaries specialised in relevant services ... View Article
ISDA: A Big Jump to the Digital Age : Derivatives market participants have been enthusiastic advocates for the use of technology, but various pockets of the business – including the documentation and definitions that form the backbone of this market – have proved trickier to shift from a primarily paper-based way of working. View Article
Insurance Europe: Insurers welcome EC supervisory data strategy for EU financial system, but say benefits must outweigh costs : The industry fully supports the aim of the supervisory data strategy to initiate a shift to a modern, efficient and effective approach to data collection for supervisory purposes. View Article
IAIS supporting material adopted and released for public consultation : Issues Paper on Insurer Culture; Application Paper on Supervisory Colleges. View Article
Insurance Europe: New paper explains how to improve the new e-Privacy Regulation to benefit consumers and improve road safety : The proposal for the e-Privacy Regulation is currently being discussed by the Commission, the European Parliament, and the Council of the EU — and seeks to update privacy rules for the digital age...it may inadvertently hamper insurers’ ability to develop innovative new products View Article
Motor Insurance: Commission welcomes European Parliament and Council agreement to update the Motor Insurance Directive : This Directive ensures that vehicles can freely circulate in the European Union while using the same compulsory insurance. It means that when accidents occur, injured parties are protected through effective arrangements for compensation. View Article
EIOPA publishes its Discussion Paper on the Methodological Framework for Stress-Testing IORPs : The methodological framework for stress-testing IORPs sets out theoretical and practical rules, guidance and possible approaches to support future IORP stress test exercises View Article
Environmental, Social, Governance (ESG)
DG FISMA: EU Taxonomy Compass : The EU Taxonomy Compass makes the contents of the EU Taxonomy easier to access for a variety of users. It enables users to check which activities are included in the EU Taxonomy (taxonomy-eligible activities), to which objectives they substantially contribute and what criteria they have to meet. View Article
EFRAG public consultation: Due Process Procedures on EU Sustainability Reporting Standard-Setting : The European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) envisages the adoption of EU sustainability reporting standards (ESRS). View Article
Invest Europe: Setting the agenda on climate change : Climate change is one of the most significant ESG issues facing investors today. ..why investors need to protect their portfolios from risks and expose them to opportunities in the shift to a low-carbon global economy. View Article
Invest Europe: The critical need for a clear, common language to progress sustainable innovation : ..we have seen a rapid growth in interest in sustainable investment. The scale and pace of change now look so great that everyone in the private equity and venture industry needs to consider its implications when looking at any company. View Article
EBF: Banks prioritize SDGs requiring greatest financing impact, study finds : The EBF and KPMG Spain outlines European bank practices in supporting and implementing the UN Sustainable Development Goals (SDGs)... an overview of best practices and main challenges for the banking industry in implementing the 17 global goals more than five years after their adoption. View Article
FCA consults on further climate-related disclosure rules : The FCA has published new proposals on climate-related disclosure rules for listed companies and certain regulated firms. View Article
Protecting Customers
EIOPA publishes report on artificial intelligence governance principles : EIOPA published a report from its consultative expert group on digital ethics setting out artificial intelligence (AI) governance principles for an ethical and trustworthy AI in the European insurance sector. View Article
Fin Tech Regulation
FT interview with Fabio Panetta, Member of the Executive Board of the ECB : The rationale for the digital euro and how it might work View Article
EPC: SWIFT – latest developments in cross border payments : SWIFT is fundamentally transforming payments and securities processing to help our customers navigate the complex challenges they will face today and in the future... Improving data quality with ISO 20022 plays a central role in achieving this vision. View Article
BIS: CBDCs: an opportunity for the monetary system : Central bank digital currencies (CBDCs) offer in digital form the unique advantages of central bank money: settlement finality, liquidity and integrity. They are an advanced representation of money for the digital economy. View Article
BIS: BoE's Victoria Cleland: A new dawn for payments : The Bank of England is currently in the midst of a ground-breaking multi-year programme to renew our Real Time Gross Settlement (RTGS) service: a programme that will not just enhance resilience but support greater competition and innovation. View Article
Economic Policies Impacting EU Finance
Committee MEPs want a review before returning to pre-pandemic fiscal rules : The report says that the EU’s economic governance framework needs to be reviewed, prior to deactivation of the General Escape Clause, which allowed member states to deal adequately with the crisis, while departing from the budgetary requirements that would normally apply. View Article
MEPs discuss tax reforms with Commissioner Gentiloni : With the Commission set to soon unveil important new plans in the ongoing process of overhauling the EU’s and the international tax architecture, MEPs of the economic and monetary affairs committee fed into the process during an hour-long meeting with Mr Gentiloni. View Article
Brexit
What UK thinks - Curtice: Five Years On: Has Brexit Been A Success? : Few voters have changed their minds about the merits of the decision to leave, meaning that the country is still divided down the middle on the issue. Five years on, four in five (82%) still say they would vote the same way again. View Article
Project Syndicate: Brexit Turns Five : Comments by Robert Skidelsky, Timothy Garton Ash, intan O’Toole, Chris Patten, Howard Davies, Dambisa Moyo View Article
What UK thinks: Has Brexit been a success? The public’s perspective : Public would now vote to Remain - just ... but would not vote to "rejoin" View Article
Project Syndicate: Chris Patten - Brexit’s Collateral Damage : Five years after the United Kingdom voted to leave the European Union, the costs of that decision are becoming clearer. Most perniciously, trust in Britain is declining fast as Prime Minister Boris Johnson denies the consequences of the post-Brexit agreement he reached regarding Northern Ireland. View Article
CRE: GDPR could be the target of UK’s post-Brexit ‘red tape’ cutting : The report recommends removing “unnecessary regulatory burdens” and concentrating specific regulatory reforms to “unleash” growth in a range of high-growth sectors, as well as boosting productivity and stimulating innovation. View Article
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