Welcome to our Gold Friends weekly e-mail.
Highlights of my Easter break: it finished with Macron 2.0 starting. That was the easy part, now for the place in the history books by uniting France and leading Europe. MiFID II suitability rules are desirable, but the devil is in the implementation. ESMA’s Ross highlighted the increasing number of ESMA direct supervision functions. Bruegel pointed to the need to reflect new international `green’ standards in EU law. The Digital Services Act (DSA): speedy political agreement. Brexit: Northern Ireland remains the flashpoint with the EU – especially ahead of next week’s probably-historic election results.
Graham Bishop
Articles from 15 - 28 April 2022
General Financial Policy
Der Spiegel: Can Macron Unite a Deeply Divided France? Emmanuel Macron has won the second round of voting against radical right-wing candidate Marine Le Pen. But a far more difficult task lies ahead: His second term. View Article
Carnegie: Macron 2.0 and Europe: A Bumpy Ride Ahead : Geopolitical realities have changed considerably since 2017, when Macron was first elected. In his second term as president, the Russo-Ukrainian war will inform French—and European—thinking. View Article
Project Syndicate's Pisani-Ferry: Macron’s Post-Election Dilemma : The challenge confronting France's newly re-elected president is how to give his second-round voters valid reasons to believe that he has listened to them. Fortunately, an opening on three related issues is possible. View Article
Vox: Creating a safe asset without debt mutualisation: The opportunity of a European Debt Agency : A European Debt Agency could help in implementing a new fiscal policy strategy in Europe.. fluctuations in bond prices over the past 20 years that such an agency could have prevented,...the agency could absorb the entire euro area debt while reducing its size due to less volatile price dynamics. View Article
EPC: Conference on the Future of Europe: There are no ready-made solutions to Europe’s democratic woes : “Randomly chosen citizens cannot understand complex policy issues because they lack the necessary knowledge and expertise.” This is an often-heard criticism of deliberative democracy. View Article
ESAs publish joint Annual Report for 2021 : The main areas of cross-sectoral focus continued to be joint risk assessment, enhancement of consumer protection, development of the regulatory and supervisory frameworks for sustainable finance and securitisation. View Article
Banking Union
EBA sees progress in MREL shortfall reduction by largest institutions while smaller institutions are lagging behind : In particular, the Report highlights that 110 resolution groups presented a shortfall of EUR 67.6bn against their end-state MREL targets, set for January 2024 for most of them. View Article
ISDA: Risk & Capital Implications of the FRTB for Carbon Certificates: A Global Perspective : The Fundamental Review of the Trading Book (FRTB) includes higher capital charges for carbon trading under the standardized approach to market risk, which has implications for banks in their role as intermediaries in the emissions trading system (ETS). View Article
Capital Markets Union
ESMA: Letter to the EC on the MiFID II suitability consultation : ESMA is fully supportive of Commission’s objective to take a holistic view of investor protectionrules and to make the EU an even safer place for individuals to save and invest long-term and thus to increase participation of retail investors in capital markets. View Article
AMIC response to the ESMA consultation paper ‘Guidelines on certain aspects of the MiFID II suitability requirements’ : In its response, AMIC highlighted the implementation challenges of the 2 August application date from product manufacturer, distributor and end-investor perspectives; View Article
EBF response to ESMA consultation on the review of MIFID II suitability guidelines : ...we would like to stress that the new regulation gives rise to a number of inconsistencies, concerns, and doubts which we believe will hinder its implementation. View Article
EBF Position on MIFIR Review : ...the EBF finds it regrettable that several of the MiFIR reform proposals both for the equity and the non-equity transparency regimes are based on expected benefits that were neither subject to an in-depth analysis nor to a comprehensive impact assessment. View Article
AIMA: EU Securitisation – Final risk retention RTS : The European Banking Authority (EBA) published its final draft regulatory technical standards (RTS), specifying the requirements for originators, sponsors and original lenders relating to risk retention. View Article
EIOPA consults on IORPs reporting rules : The aim of the public consultation is to improve IORPs reporting focusing on emerging risks and new challenges and issues observed by NCAs and pensions industry since its first implementation in 2018. View Article
ESMA's Ross: speech at ECMI/CEPS Webinar : ESMA’s Direct Supervision role;..driving forward the integration and transparency of the EU financial markets, focusing particularly on the most recent proposals by the Commission on the European Single Access Point (ESAP) and the consolidated tape. View Article
Environmental, Social, Governance (ESG)
ECGI: The New Corporate Governance : In the last few years, there has been a dramatic increase in shareholder engagement on environmental and social issues View Article
Accountancy Europe: Development of purposeful and effective sustainability reporting standards : Accountancy Europe fully supports the European Green Deal ambitions to turn Europe into the first climate neutral continent by 2050. View Article
Bruegel: Owning up to sustainability risks: the EU should champion international standards : To keep European Union capital markets open and integrated, new international standards should be reflected in future European law and accounting practice to provide further incentives for a reallocation of capital, reflecting in particular climate risks. View Article
Bruegel: Green public procurement: A neglected tool in the European Green Deal toolbox? : A new EU regulatory action in public procurement could unlock the potential of green public procurement and add an important element to the European Green Deal toolbox. View Article
CEPS: A critical look at the ESG market : Environmental, social and governance (ESG) investing has been practised in Europe for more than two decades, during which it has moved from niche to the mainstream market. View Article
IPE: NEST, CEPB on board as UK transition plan taskforce launches : Formally launched today by HM Treasury with a two-year mandate, the Transition Plan Taskforce will aim to establish best practice for transition plans and develop templates that would be suitable for incorporation into UK regulatory frameworks, alongside guidance on metrics and targets. View Article
Fin Tech Regulation
Commission: Digital Services Act: Commission welcomes political agreement on rules ensuring a safe and accountable online environment : The DSA sets out an unprecedented new standard for the accountability of online platforms regarding illegal and harmful content. It will provide better protection for internet users and their fundamental rights... a single set of rules in the internal market, helping smaller platforms to scale up. View Article
CER: Will the Digital Services Act save Europe from disinformation? : In negotiating the Digital Services Act, EU law-makers balanced tackling disinformation with protecting free speech. The Commission’s last-minute proposal for stricter regulation of tech platforms during crises undermines this balance. View Article
ECB's Panetta: For a few cryptos more: the Wild West of crypto finance : Crypto evangelists promise heaven on earth, using an illusory narrative of ever-rising crypto-asset prices to maintain inflows and thus the momentum fuelling the crypto bubble. View Article
BIS: CBDCs for the People : Op-ed by Mr Agustín Carstens, General Manager of the BIS, and H.M. Queen Máxima of the Netherlands, the United Nations Secretary-General's Special Advocate for Inclusive Finance for Development, published by Project Syndicate, View Article
Reuters: European crypto industry steps up efforts to influence EU policy : More than 40 crypto business leaders have asked the European Union not to require crypto firms to disclose transaction details and dial down attempts to bring to heel rapidly growing decentralised finance platforms. View Article
FT: Why the UK joined the race to woo the crypto industry : Global investment in the sector topped $30bn in 2021 but the government’s plan to attract some of that money lacks detail, say critics View Article
Chatham House: What is the metaverse? : Explaining what is meant by the metaverse, how the metaverse will be accessed, and why it requires ambitious, agile regulation. View Article
Economic Policies Impacting EU Finance
European Commission: Fiscal Sustainability Report 2021 : The Fiscal Sustainability Report 2021 provides an overview of fiscal sustainability challenges faced by EU Member States over the short, medium and long term. View Article
GFIA: Insurers call for refinements to OECD global minimum tax implementation rules : There are still several areas that remain ambiguous or create undue complexity and should, therefore, be addressed through clarifications and simplification measures. View Article
Brexit and the City
City of London: London leads the world as the top destination for foreign investment in financial and professional services : New figures published by the City of London Corporation, show that London continues to hold the top spot in attracting foreign investment in financial and professional services, attracting 114 projects in 2021 – well clear of Dubai (104 projects), Singapore (103), New York (54) and Paris (51). View Article
City AM: Chamber boss hits out at City of London for ‘laundromat’ complaints : The boss of London Chambers of Commerce has hit out at the City of London Corporation today for complaining about London’s ‘laundromat’ label, claiming that questions have “rightly been raised” over the City’s reputation for dirty cash. View Article
FCAL Critical issues in financial regulation: The FCA's perspective : Post-Brexit, if you are a predominantly UK business, your regulated entity should be here to protect investors and the integrity of the markets. View Article
Brexit
UK and EU: Post-Brexit imports, supply chains, and the effect on consumer prices : This report documents the decrease in imports and shows how the patterns of imports vary across sectors following the UK’s departure from the Single Market and Customs Unit at the end of 2020. View Article
FT: UK prepared to ‘unilaterally’ tear up Northern Ireland post-Brexit trade deal : Rees-Mogg tells MPs if protocol with EU is not reformed London has sovereign right to take action alone View Article
Institute for Government: Notes from Jacob Rees-Mogg’s European Scrutiny Committee appearance : His recent antics of leaving notes for absent civil servants made headlines, but Jacob Rees Mogg also had some interesting things to say about “Brexit opportunities”, writes Jill Rutter View Article
Federal Trust: VIDEO: Northern Ireland, Elections and Brexit : In this new video our Director Brendan Donnelly and Council member John Palmer discuss the forthcoming elections in Northern Ireland and their likely implications for the Northern Ireland Protocol and relations with the rest of the island of Ireland. View Article
FT: UK plans for Northern Ireland stoke Treasury fears of EU trade war : Granting ministers power to tear up post-Brexit deal could worsen cost of living crisis View Article
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