Brexit has jumped out of the shadows as Chancellor Sunak set out his plan – amidst the magnificence of Mansion House and plenty of hyperbole – for the divergence of “agile” UK regulation from the EU’s. This is said to be just the beginning - citing the new financial services partnership with Singapore. However, the Singapore Monetary Authority seems to think it is little more than an agreement to talk about things … and will meet again in 2022! Shades of the MoU with the EU.
(This e-mail provides the headers of a selection of the articles published this week. If you would like to upgrade to our Gold service and access all articles - with live links to the underlying news - please click on the button)
Articles from 1 - 8 July 2021
General Financial Policy
Bloomberg: Germany’s Altmaier Spurns French Push for Permanent EU Debt : Focus should be on spending EU750 billion, industrial projects; German economy minister speaks at Aix-en-Provence gathering
Summer 2021 Economic Forecast: Reopening fuels recovery : The European economy is forecast to rebound faster than previously expected, as activity in the first quarter of the year exceeded expectations and the improved health situation prompted a swifter easing of pandemic control restrictions in the second quarter.
FSB Chair presents a comprehensive roadmap for addressing climate-related financial risks : The letter notes mounting evidence of global recovery, even if uneven across regions. However, some risks to financial stability remain elevated.
Banking Union
CEPS: Time to get serious on AML policy in Europe : It is estimated that 2-5% of global GDP is laundered annually..Tackling money laundering is a longstanding policy priority, but one pursued with limited success. In the meantime, crime proliferates... The EU Commission is announcing an AML action plan in July, but a new approach is needed.
POLITICO:EU to bypass banking agency with new dirty-money watchdog : Draft Commission plans admit Paris-based regulator has failed to tackle money laundering.
SSM's Enria: Exchange of views at the Finance and Treasury Committee of the Italian Senate - credit risk and NPLs : Your chosen topic for today’s exchange of views – credit risk and the potential surge in non-performing loans (NPLs) as a result of the pandemic shock – is very timely and important. I am happy to provide you with my views on this subject, which is one of our top priorities.
Capital Markets Union
EFAMA urges changes to Mandatory Buy In (MBI) implementation timetable : We are faced with the major burden of implementing requirements under the Mandatory Buy-in (MBI) Regime as of 1 February 2022 knowing these are likely to change as a result of the impact assessment that the EC is conducting following the conclusions of their report.
EFAMA publishes 2021 industry Fact Book - Report highlights key developments in the European fund industry in 2020 : The 2021 Fact Book provides an in-depth analysis of trends in the European fund industry, an extensive overview of the regulatory developments across 29 European countries and a wealth of data.
EFAMA: No need for fundamental reform of EU Money Market Funds Regulation : According to the association, European MMFs continued to meet redemptions throughout 2020, even though liquidity management proved challenging for all market participants in March 2020.
Environmental, Social, Governance (ESG)
Commission puts forward new strategy to make the EU's financial system more sustainable and proposes new European Green Bond Standard : The new Sustainable Finance Strategy; The European Green Bond Standard proposal; Delegated Act on the information to be disclosed by financial and non-financial companies about how sustainable their activities are, based on Article 8 of the EU Taxonomy.
Questions and Answers: European Green Bonds Regulation : The Commission is proposing today a Regulation to create the “European Green Bond Standard” or “EUGBS”. The EUGBS is intended to be a voluntary “gold standard” for green bonds.
Next stage of sustainable finance agenda critical to meeting EU sustainability objectives, says AFME : Adam Farkas, CEO AFME: “Europe’s leadership on sustainable finance has given rise to several ambitious and comprehensive regulatory proposals... the sustainable finance agenda will be critical to mobilise private investment on the scale needed to meet the EU’s sustainability objectives."
Strategy for Financing the Transition to a Sustainable Economy: EBF comments : The Strategy builds on the ambitious foundations of the Action Plan on Financing Sustainable Growth and comes at a critical juncture for the progress of sustainable finance in the EU and globally. It strikes the right balance between acceleration towards reaching the goals of the Paris Agreement, as well as the SDGs, and consolidation of the previous regulatory structure.
Insurance Europe welcomes objectives of the EC Renewed Sustainable Finance Strategy and Green Bond Standard : The Strategy and the Standard are key parts of the Commission’s ambitious European Green Deal to move Europe to a clean, circular economy and meet its ambitious goals for to curb climate change.
Accountancy Europe: EU green bond standard: Europe’s next move to help finance sustainable projects : Green bonds (GB) are one of the financial instruments that can help channel funds towards environmentally friendly projects. The interest towards green bonds is growing; but the lack of standards and definition of what ‘green’ really means is a source of uncertainties for issuers and investors.
CDSB: New European sustainable finance strategy gives hints on mainstreaming sustainable finance through global standards and frameworks : CDSB welcomes the Renewed Sustainable Finance Strategy and the EU’s intention to contribute to the development of ambitious reporting standards in Europe and beyond, building on the recommendations of the Task Force on Climate-Related Financial Disclosures.
ESMA and EBA publish final guidance on fit and proper requirements : The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) published today their revised final joint Guidelines on the assessment of the suitability of members of the management body and key function holders.
Fin Tech Regulation
Vox: Central bank digital currency: The battle for the soul of the financial system : Central banks may substitute publicly issued digital currency for the bank-issued digital money that people use every day. How this plays out can profoundly reshape the financial system and make it less stable. This column argues that we don’t need CBDC to solve financial system problems,
Economic Policies Impacting EU Finance
Project Syndicate's Stiglitz:The Global Tax Devil Is in the Details : It appears that the international community is moving toward what many are calling a historic agreement to set a global minimum tax rate on multinational corporations (MNCs). It’s about time – but it may not be enough.
Brexit
Chancellor Sunak: Mansion House speech on financial services and the EU : And we need this industry to succeed...You contribute £76 billion in tax a year - enough to pay for our entire police force and our entire state schools’ system...You employ 2.3 million people - with two thirds of those jobs outside London, in places like Glasgow, Belfast, Bournemouth and Leeds.
UK Chancellor sets out how UK financial services can create prosperity at home and project values abroad in first Mansion House speech : Plans to make the UK the world’s most advanced and exciting financial services hub to create prosperity at home and help the UK project its values abroad, were set out by the Chancellor in a speech at Mansion House today
UK and Singapore mark a new era of Financial Services Cooperation : The UK and Singapore will explore opportunities for greater financial cooperation, including enhanced information sharing, closer cooperation in international fora, as well as regulatory deference, to drive new and broader opportunities for financial services trade and cooperation.
CRE: UK will reform SII ‘as soon as possible’ on ‘compelling’ evidence for change : Publishing responses to a consultation on potential reforms launched last year, HM Treasury said it agrees Solvency II’s risk margin is “too high and too volatile”.
Bruegel: Banks post-Brexit: regulatory divergence or parallel tracks? : Post-Brexit UK bank regulation is not likely to compromise on international standards, but will place greater emphasis on competition, making close UK-EU dialogue essential.
ECON Brief: What are the main differences between the practice of supervising large banks in the UK and in the euro area, and what are the : The ECB is likely to take a more stringent stance in prudential supervision than UK authorities. The setting of risk weights and the design of macroprudential stress test scenarios d o cu ment this hypothesis.
Joint readout of principals’ meeting of UK and US authorities regarding central counterparty resolution : Senior officials from the Bank of England, Federal Deposit Insurance Corporation, Commodity Futures Trading Commission, Securities and Exchange Commission, and Federal Reserve Board convened a virtual meeting today to discuss certain issues relating to the concept of resolution of a CCP.
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