Welcome to our Gold Friends weekly e-mail.
Highlights of my week: The Conference on the Future of Europe (CoFE) has produced a series of ambitious ideas that will require Treaty change. The European Parliament backed these as well as Italian PM Draghi but the big question now – especially in the light of the Ukraine war: will the Member States back further deepening of integration? But the Parliament has thrown down an immediate gauntlet by proposing major changes to the EU’s voting arrangements. Economic integration is set to deepen as Eurogroup sets off along a work plan to complete banking union – and this may now be easier as the Single Resolution Board reported it is on track to complete the Single Resolution Fund by end-2023. CMU continues to advance in modest, unglamorous steps about trading venues, the consolidate tape and bond market transparency. Both EIOPA and ESMA are taking steps to improve retail investor protection. ECON backed the Commission’s ideas to implement the OECD’s minimum global corporate tax rate. Brexit: today, Northern Irish voters may take a fateful step heading to a united Ireland.
Graham Bishop
Articles from 29 April- 5 May 2022
General Financial Policy
Future of Europe: Conference Plenary ambitious proposals point to Treaty review : Conference Plenary adopts 325 proposals for wide-ranging reforms; Parliament’s delegation decided by broad majority to support the proposals; MEPs will, based on citizens’ demands, seek to formally initiate amending the Treaties; View Article
Treaty review necessary to implement Conference proposals, Parliament declares : Ambitious and constructive outcome of Conference Plenary welcomed by MEPs; Parliament to prepare specific proposals to start revising EU founding documents; More integration in areas such as energy, defence, EU institutions, inclusive and resilient growth; View Article
FT: Mario Draghi urges EU to deepen economic integration in response to war : Italy’s PM also calls on Brussels to abandon requirement for unanimity on foreign policy decisions View Article
MEPs begin revising rules on EU elections, calling for pan-European constituency : Parliament has started the reform of the EU’s Electoral Act, seeking to turn the 27 separate elections and their diverging rules into a single European election. View Article
Remarks by Paschal Donohoe following the video conference of the Eurogroup of 3 May 2022 : The meeting of the Eurogroup focussed exclusively on how we can make progress on Banking Union. In this meeting, I presented to my colleagues a detailed proposal for a stepwise and time-bound work plan on all of the outstanding elements to complete Banking Union. This was requested by our leaders. View Article
LSE: Why can’t we admit that Macron won big? : Emmanuel Macron won the second round of the French presidential election over Marine Le Pen with 58.5% of the vote ahead of Le Pen’s 41.5%. Marco Bitschnau asks why coverage of the result has tended to downplay the scale of his victory. View Article
Better Finance: European savers are set to lose hundreds of billions of euros in purchasing power in 2022 alone : Financial repression poses a major problem for the protection of savers: policymakers must act and stop using savers' cognitive biases to their detriment. View Article
Banking Union
EBA publishes amended final draft technical standards on the mapping of ECAIs for securitisation positions : The changes reflect the relevant amendments introduced by the new Securitisation Framework, as well as the mappings for three ECAIs that extended their credit assessments to cover securitisations. View Article
SRB: Single Resolution Fund on track for €80 billion by end 2023 : Each year, we collect contributions to build up the Single Resolution Fund (SRF), an emergency crisis fund that supports bank resolution. Around 3,000 banks and other financial institutions, across the 21 EU countries that make up the Banking Union, will contribute to the SRF in 2022. View Article
ECB's Elderson: Mind the gap, close the gap – the ECB’s views on the banking package reforms : The ECB published its opinion on the European Commission’s proposed revisions to the Capital Requirements Directive (CRD VI)[1]. Together with the proposed amendments to the Capital Requirements Regulation (CRR III), published in March 2022, the reforms comprise the EU’s latest “banking package”. View Article
Capital Markets Union
ESAs consult on sustainability disclosures for Simple, Transparent and Standardised securitisations : The ESAs (EBA, EIOPA and ESMA) published a Consultation Paper seeking input on draft Regulatory Technical Standards (RTS) on the content, methodologies and presentation of information in respect of the sustainability indicators for Simple, Transparent and Standardised (STS) securitisations. View Article
ESAs recommend changes to make the PRIIPs key information document more consumer-friendly : The European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published today their technical advice to the European Commission on the review of the PRIIPs Regulation. View Article
EIOPA: Risk Dashboard shows resilient insurance sector even as macro and cyber risks abound : The European Insurance and Occupational Pensions Authority (EIOPA) published today its Risk Dashboard based on Solvency II data from the fourth quarter of 2021. View Article
SMSG advice to the ESMA Consultation Paper on Guidelines on certain aspects of the MiFID II suitability requirements. : The SMSG repeats its concerns about the level 1 sustainable finance legislation: complexity, timing, inconsistencies between different pieces of legislation (see Annex). View Article
ESBG response to ESMA’s consultation on guidelines of MiFID II suitability requirements : ESBG submitted its response to the European Securities and Markets Authority's (ESMA) consultation on guidelines on certain aspects of the MiFID II suitability requirements. View Article
EBA provides its advice to the EU Commission on non-bank lending : The EBA’s proposals aim at addressing risks arising from the provision of lending by non-bank entities in the areas of supervision, consumer protection, anti-money laundering and countering the financing of terrorism (AML/CFT), macro and microprudential risks. View Article
IOSCO releases report on issues and considerations of market data in secondary equity markets : The report highlights that market data is an essential element of efficient price discovery and for maintaining fair and efficient markets. View Article
ICMA has responded to ESMA’s consultation on trading venue perimeter : ICMA has clarified its member’s interpretation of the definition of multilateral system. View Article
EBF Position paper – ESMA Consultation TV perimeter : The European Banking Federation (EBF) welcomes the opportunity to comment on ESMA’s draft “Opinion on Trading Venues’ Perimeter”. View Article
AFME/FINBOURNE study shows need for longer deferrals for large fixed income trades : This shows that the majority of fixed income trades could be made transparent in near real-time, but also finds there is a clear need for a longer deferral period for the publication of larger or illiquid trades. View Article
Better Finance: For a "Consolidated Tape" of Capital Market Trades that brings Value to Individual Investors : Available data and evidence show significant increases in the trading and investing activity of EU households, sparked by a new wave of young, previously inactive, non-professional investors. View Article
Better Finance: Transparency and Best Execution for Retail Traders and Investors : Retail trading must be simple, transparent, cost-efficient, and done in the best possible conditions for individual, non-professional (“retail”) investors. View Article
Environmental, Social, Governance (ESG)
GRI: Progress on corporate transparency in Europe : GRI remains committed to alignment as draft European Sustainability Reporting Standards unveiled View Article
ISDA: Progressing on Carbon Trading : Without access to carbon credits, companies all over the world will only get so far in their efforts to reduce emissions – credits allow them to offset those emissions that may be otherwise impossible or difficult to eliminate. View Article
Vox: Public support for carbon taxation: Lessons from France : While many economists are in favour of carbon taxation, the public often opposes this climate policy. This column uses data from a survey of 3,000 people in France to show that rejection of a carbon tax is driven by pessimistic beliefs regarding the properties of the tax. View Article
EPC: Conference on the Future of Europe: Greening Europe's cities : In the Conference on the Future of Europe, citizens have set out ambitious recommendations, including for our environment and climate. Creating more sustainable European cities must become a top-flight priority for EU policymakers. View Article
FSB launches consultation on supervisory and regulatory approaches to climate-related risks : FSB published a report to assist supervisory and regulatory authorities in developing their approaches to monitor, manage and mitigate cross-sectoral and system-wide risks arising from climate change and to promote consistent approaches across sectors and jurisdictions. View Article
Protecting Customers
EIOPA publishes advice on Retail Investor Protection : The European Insurance and Occupational Pensions Authority (EIOPA) has published today its Final Report with its advice to the European Commission on retail investor protection in relation to the sale of Insurance-Based Investment Products (IBIPs). View Article
ESMA makes recommendations to improve investor protection : In the advice ESMA puts forward proposals that will make it easier for investors toget the key information they need to take well-informed investment decisions, whilst alsoprotecting them from aggressive marketing techniques and detrimental practices. View Article
Fin Tech Regulation
The Economist: Watchdogs take a swipe at Apple Pay : Why complaints about Apple’s walled garden are multiplying. THERE IS NOT yet an app to keep track of the growing number of antitrust complaints against Apple. But perhaps there should be. View Article
SUERF: Would a retail CBDC achieve its intended purpose? : While an unattractive interest rate or a quantity ceiling may limit the demand for retail CBDC and the transfer of risk to the central bank, these mechanisms would – as Gresham’s law teaches us – undermine the use of CBDC as a medium of exchange. Retail CBDC could thus miss its intended purpose. View Article
Economic Policies Impacting EU Finance
Global minimum corporate tax rate: ECON MEPs approve Commission’s main ideas in committee vote : MEPs broadly approved the Commission proposal implementing into law the international agreement on a global minimum corporate tax rate of 15%. View Article
Recovery fund: ministers welcome assessment of national plans for Bulgaria and Sweden : Economy and finance ministers today welcomed the assessment of national recovery and resilience plans for Bulgaria and Sweden. The Council will adopt its implementing decisions on the approval of these plans by written procedure shortly after the informal ministers’ meeting held today. View Article
Brexit
Federal Trust: What Does Macron’s Re-Election Mean for France, for Europe and for Brexit? : In this Federal Trust video our Chairman John Stevens and Director Brendan Donnelly analyse the recent French Presidential Elections. They conclude that France and Macron are in a powerful position to press for further European integration. This move towards further European integration will be an uncomfortable experience for the UK as a whole and for the City of London in particular. View Article
LSE: EU citizenship and transnational political mobilisation after Brexit : Following the Brexit referendum, a number of organisations were set up to support the rights of EU citizens in the UK and British citizens in the EU. Catherine Craven, Michaela Benson and Nando Sigona reflect on the work of these organisations and ask what their legacy will be. View Article
UKandEU's Curtice: what does Great Britain make of the Northern Ireland protocol? : Brexit is widely regarded as done and dusted – though the latest Redfield and Wilton Strategies/UK in a Changing Europe poll today suggests voters in Great Britain are still more or less evenly divided between those who would (49%) and those who would not (51%) reverse Brexit. However, one issue that is certainly still to be fully resolved is the one on which Brexit negotiations have repeatedly stumbled – Northern Ireland. View Article
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