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30 October 2024

Friends Weekly Newsletter




Welcome to our Friends weekly e-mail.

 

Highlights of my week: The fireworks of the Commissioner-designate Hearings start next week and the US Presidential election will finally arrive. Will the betting markets be right? Either way, it seems that Europe is going to face some hard choices, including the rise of the BRICS/Global South. SRB’s Laboureix was clear that taxpayers will not have to bail out failing banks but the FT reported that the SEC seems to have thrown a spanner in such works for any bank with US holders of its AT1 bonds that need to be converted to new equity. ECON published a useful summary of the various reports affecting CMU and the ESAs produced a batch of papers and consultations on detailed rules. Finextra reported that Aquis and CBOE are teaming up to form a second bidder for the consolidated tape contract. The SSM’s Elderson laid out starkly some of the risks facing banks from climate change while the EFR wrote to EU leaders about the role of finance in mitigating climate change. The Brexit debate quietened down ahead of the UK’s budget but neither it, nor the supporting papers, even mentioned Europe/Brexit - better to ignore the elephant in the room.

Graham Bishop


Articles from 25-31 October 2024

 

Policy impacting Finance

EPC's Maurice: Confirmation hearings 2024: How will the Commission fulfil the promises of Von der Leyen II? : We raise the questions that we consider MEPs should ask the Commissioners-designates to clarify their work programme, or address gaps in policies and overlaps between Commissioners, which are revealed by our analysis of their mission letters. View Article
LSE's Heinkelmann-Wild: Europe must prepare for US withdrawal from multilateralism – under Trump or Harris : ..withdrawal from multilateral institutions predates Trump and might well continue under a Kamala Harris presidency. European leaders should therefore act now to build a more resilient multilateralism without the US. View Article
CEPR's Karau,Fischer: What financial markets say about the economic implications of a potential Trump election victory : In this column we use betting market data in a VAR model to assess the economic implications of a second Trump term from the perspective of financial market participants. View Article
Breugel's Garcia-Herrero: BRICS is becoming a more solid construction : BRICS is consolidating into a China-dominated bloc that aims to shape the global order; the West should pay attention  View Article
ECON: The role (and accountability) of the President of the Eurogroup : This briefing paper provides an overview of the role and mandate of the Eurogroup, and the accountability of its President. 1) The role of the Permanent President of the Eurogroup (PEG); 2) PEG and the European Parliament; 3) The role and mandate of the Eurogroup; and 4) Eurogroup transparency.  View Article

Banking Union

SRB's Laboureix: "Crisis management. A way forward. Preparation, dialogue to deal with complexity" : .. as a resolution practitioner, I am very well placed to say that this debate on who bails out whom is from a different era. It may have made sense in 2008 but it is very surprising in 2024. .. View Article
SSM's McCaul: Fading crises, shifting priorities: a supervisory perspective on the regulatory cycle : it is a fundamental misconception to frame safety and competitiveness as opposing forces. A stable and secure financial system forms the bedrock of long-term competitiveness... the post-crisis reform agenda in Europe is not yet complete. Notably, the banking union is still unfinished... View Article
FT: Everyone hates the SEC’s bank bail-in take : A year ago FT Alphaville wrote about the Financial Stability Board’s Credit Suisse postmortem, and its almost-casual observation that the SEC believed the entire post-GFC global bank bail-in bonds regime might fall foul of US securities law.  View Article

Capital Markets Union


ECON: How to achieve CMU, after all? An analysis of the recommendations for Capital Markets Union in the Draghi, Letta and Noyer reports : by Maja, Giacomo, Kai Gereon: In this briefing we show how securitisation, supervision, market infrastructure and savings/pensions schemes are identified as priorities in all three reports, however with different conclusions.  View Article
Commission: Capital markets union Reform of long-term investment funds benefits investors and strengthens EU capital markets. : The revised regime, commonly referred to as ELTIF 2.0 and applicable since January 2024, makes ELTIFs more accessible and attractive for investors. It removes existing hurdles and enables ELTIFs to be marketed to investors across the EU.  View Article
ESMA consults on amendments to MiFID research regime : In particular, ESMA’s proposals aim to ensure that: the annual assessment of research quality is based on robust criteria; the remuneration methodology for joint payments for execution services and research does not prevent firms from complying with best execution requirements View Article
ESMA makes proposals to streamline the prospectus area and seeks stakeholder input : ... it also puts forward proposals for non-equity securities that are advertised with ESG features and proposals to update the data reporting requirements to consider the changes introduced by the Listing Act. It calls for an analysis of liability for the information given in a prospectus .. View Article
ESMA publishes a report on first application of IFRS 17 Insurance Contracts : This Report provides an overview of ESMA’s and National Competent Authorities’ (NCAs) observations regarding the first-time application of the International Financial Reporting Standard (IFRS) 17 Insurance Contracts in the 2023 financial statements of a sample of European insurance companies. View Article
ESMA announces 2024 European Common Enforcement Priorities (ECEP) for corporate reporting? : The ECEP sets out the expectations of ESMA and National Competent Authorities (NCAs) regarding the specific areas of focus for the enforcement and supervision of the annual financial reports of issuers of securities admitted to trading on European Economic Area (EEA) regulated markets.     View Article
The EBA asks for input to entities falling within the scope of initial margin model authorisation under the revised EMIR : The ESAs launcheda short survey addressed to entities within the scope of the initial margin (IM) model authorisation regime introduced by the upcoming revised European Market Infrastructure Regulation (EMIR 3). View Article
EIOPA’s draft advice calls for one-to-one capital weight for EU insurers’ crypto holdings : As the market for crypto assets is still in its early stages and evolving, EIOPA recommends revisiting the prudential treatment of these assets in the future to determine whether a differentiated treatment would be appropriate. View Article
The ESAs finalise rules to facilitate access to financial and sustainability information on the ESAP : The requirements are designed to enable future users to be able to access and use financial and sustainability information effectively and ECON:
effortlessly in a centralised ESAP platform.  View Article
ICGN's Recommendations to the European Institutions on Shareholder Rights : We observe that some barriers to the exercise of shareholder rights remain in the European Union. These include legal and regulatory obstacles, as well as operational obstacles (such as local specificities creating complexity for foreign investors and reliance on manual processes). View Article
Irish Funds Welcomes Publication of Funds Sector 2030 Report by Department of Finance : We welcome the report’s recommendations aimed at strengthening Ireland’s ability to meet the evolving needs of investors across all asset types and structures, including private assets and ETFs. View Article
Insurance Europe: Insurers’ role in EU Cyber Resilience : The publication outlines the crucial role the sector plays in enhancing cyber resilience, at a time when cyber threats are increasing in both frequency and severity.  View Article
Delors Centre: Europe ventures forward: Getting the scaleup of cleantech right : VC funding in Europe remains a fraction of what is required, still relies heavily on the public purse and fails to channel resources into strategic green sectors.  View Article
finextra: Aquis and Cboe team up for EU consolidated tape bid : Aquis Exchange and Cboe Europe are forming a joint venture to line up a bid to run the new European Union's equity consolidated tape. View Article

Environmental, Social, Governance (ESG)

SSM's Elderson: Conference of the Parties to the Convention on Biological Diversity – Finance and Biodiversity(COP16) Day : This interdependence [between banks and the ecosystem] underscores why the ECB made nature one of the focus areas of its climate and nature plan for 2024 and 2025. It is also why we push banks under our supervision to manage all material nature-related risks. View Article
ESAs publish 2024 Joint Report on principal adverse impacts disclosures under the Sustainable Finance Disclosure Regulation : The findings show that financial institutions have improved the accessibility of their Principal Adverse Impact (PAI) disclosures. There has also been positive progress regarding the quality of the information disclosed by financial products, and, in general, in the quality of the PAI statements.  View Article
EFR Letter on COP29 to European Policymakers on how policy should be developed : The EFR particularly welcomes recognition of the contribution the financial sector can make and recognising the role that insurance and the financial industry in general play in tackling the loss and damage associated with climate change impacts. View Article

Fin Tech Regulation

POLITICO: Digital euro sparks sovereignty battle between EU governments and ECB : Politicians are vying with technocrats for control of a revamp of the single currency that both say poses serious economic risks.  View Article

Brexit

Encompass's Hunsaker: The UK has to navigate an increasingly precarious investment landscape : In 2016, the UK received over £8 billion in investment from the EIB. As a result of Brexit, the UK left all EU institutions, including the EIB. By 2020, the UK had established four domestic investment banks to replace the EIB’s role.  View Article
Federal Trust's Stevens,Donnelly: Video - Does the EU want the UK back? : In this new Federal Trust video, John Stevens and Brendan Donnelly discuss the claim that the EU does not want the UK to return to the Union for many years, if ever. They argue that this claim is misleading and can serve as a pretext for acquiescing in the harm done by Brexit. View Article

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