Welcome to our Friends weekly e-mail.
We will take a short break over Easter and the next edition will be published on 11April.
Highlights of my week: The Euro Summit accepted the call from Eurogroup to urgently speed up the creation of the CMU - with no shortage of advice on concrete measures to boost securitisation from the Joint Associations and Delors Centre. PCS noted – caustically – that expressions of support for this market now seem to outnumber the issuance! The SSM responded in great detail to the European Parliament’s comments on its Annual Report – a welcome example of accountability in action. The BIS analysed supervision and concluded it will not be effective without adequate resources, underlining the importance of the IMF’s lessons from last year’s bank crisis: intrusive supervision is critical. ESMA won the prize for pre-Easter holiday `deck clearing’ with a raft of guidelines/comments on MiFIR etc. The SSM’s Elderson spoke in Brazil about why supervisors have to take climate risk into account while on the other side of the world in Tokyo, a UBS banker told the central banks’ Network for Greening the Financial System (NGFS) that such expectations from civil society are unrealistic given their economic impact. In Brexitland, the FCA has proposed a watering down of shareholder protections to boost the UK equity market but both the Investment Association (all UK investment institutions!) and ICGN have pushed back hard on these ideas as being manifestly counter-productive.
Graham Bishop
Articles from 22-28 March 2024
Policy impacting Finance
European Council conclusions, 21 and 22 March 2024 : IX. EUROPEAN SEMESTER45. The European Council endorses the policy priorities of the Annual Sustainable Growth Survey and invites the Member States to take them into account. It also endorses the draft Council recommendation on the economic policy of the euro area. View Article
Statement of the Euro Summit, 22 March 2024 : Taking note of the letter of the President of the Eurogroup of 18 March 2024, we are determined to urgently speed up the deepening of our Capital Markets Union, which will be key to mobilising the substantial financing needed for the green and digital transitions. View Article
ECFR's Krastev/Leonard: A new political map: Getting the European Parliament election right : If mainstream parties want to push back against the far right, they should embrace an alternative agenda which prioritises national contexts, and develop more targeted campaigns designed to mobilise voters without fanning an anti-European backlash. View Article
Banking Union
Council: Daisy Chains: Council adopts directive on indirect subscription chains : The Council today adopted a directive that amends the Bank Recovery and Resolution Directive or (BRRD) and the Single Resolution Mechanism Regulation or (SRMR) to include targeted proportionality requirements to the treatment of ‘internal MREL’ in bank resolution groups. View Article
SSM: Feedback on the input provided by the European Parliament : ECB Banking Supervision hereby replies to the comments and suggestions provided by the European Parliament in the Resolution. The feedback focuses on nine key issues raised in the Resolution - View Article
BIS' Coelho/Guerra: Under pressure: taking stock of supervisory resources : Effective banking supervision relies on several factors, including authorities having relevant powers, operational independence, legal protection and the willingness to take timely actions. However, even if all these conditions are met, supervision will not be effective without adequate resources. View Article
IMF's Adrian/Dobler: More Work is Needed to Make Big Banks Resolvable : Last year's turmoil showed that further progress is required in a number of areas to ensure banks aren’t too big to fail. What we’ve learned: Intrusive supervision and early intervention are critical. View Article
EBF position paper on the Commission Proposal for Payment Services Regulation : The Payment Services Regulation (PSR) and PSD3 proposals offer some welcome updates that can strengthen the current state of the payments market, provided that some important elements are integrated, most notably on fraud and liability, open banking and strong customer authentication (SCA). View Article
EPC - Morley: Creating a sustainable pan-European payment method through SPAA : The SEPA Payment Account Access (SPAA) scheme is the final piece of the puzzle, enabling a commercial model for open banking and introducing additional features beyond the revised Payment Services Directive (PSD2). View Article
Capital Markets Union
Commission publishes draft interpretative notice on the transitional provision of the MiFIR review : The new rules cover the limitations regarding “dark trading” (trading without pre-trade transparency), moving from a double to a single volume cap. The EU is now preparing Commission delegated regulations specifying the new rules, including for the single volume cap. View Article
ESMA: Transition to the revised MiFIR rulebook : ESMA received numerous questions from stakeholders on the provisions applicable on the date of entry into force of the revised MiFIR. ESMA acknowledges that public guidance is necessary, notably, on the application of Article 54(3) View Article
ESMA clarifies application of certain MIFIR provisions, including volume cap : The statement covers guidance on equity transparency and non-equity transparency; the systematic internaliser (SIs) regime; designated publishing entities (DPEs); and reporting. View Article
ESMA provides market participants with guidance on the clearing obligation for trading with 3rd country Pension Schemes : ..deprioritising supervisory actions linked to the clearing obligation for third-country pension scheme arrangements (TC PSA), pending the finalisation of the review of EMIR. View Article
ESMA: T+1 feedback report shows mixed impacts of shortening the settlement cycle in the EU : ESMA aims at including lessons learnt from the North American move to T+1 as well as any further feedback received from stakeholders in the APAC region, from small and medium market participants and retail investors and their representatives. View Article
ICMA co-signs Joint Associations’ response to the ESMA consultation of December 2023 on the review of SECR Article 7 templates : Promotion of well-functioning cross-border debt securities markets, without unnecessary fragmentation, is at the heart of ICMA’s mission...a priority for ICMA’s members. This includes a healthy, efficient international securitisation market promoting global diversification and financial stability. View Article
PCS: Eurogroup adds its support for the revitalisation of European securitisation : The only thing arriving seemingly in greater numbers than new public securitisation transactions this March are expressions of support for the market from European policy makers. View Article
Jacques Delors Centre's Mack: Handle with care – How Europe can reap the benefits of securitisation : A lack of standardisation and legal harmonisation currently prevents the EU from reaping the benefits of this instrument. Weakening the prudential framework will not create a truly European market but may pose new risks to financial stability. View Article
Bruegel's Veron: European capital markets union: make it or break it : Capital markets union has not delivered, but it should be given a last chance, with a focus on supervisory integration View Article
ECB Blog: Who buys bonds now? How markets deal with a smaller Eurosystem balance sheet : Ferrara, Hudepohl, Karl, Linzert, Nguyen, Cruz: The Eurosystem is shrinking its balance sheet, so more government bonds available for purchase. The ECB Blog looks at how markets are adjusting to this new situation with regard to bond price volatility, liquidity and the impact on repo markets. View Article
ICMA publishes report outlining how bond markets can meet future EU investment challenges : It underlines the transformational role that bond markets can play in funding the investment that the EU needs for sustainable economic growth and competitiveness .. provides recommendations on how the EU can further develop a regulatory framework supporting the ongoing development of bond markets. View Article
Environmental, Social, Governance (ESG)
SSM's Elderson in Brasil: Taking into account climate and nature in monetary policy and banking supervision around the world : In my remarks today, I will explain why central banks and supervisors have no option but to take the ongoing climate and nature crises into account to deliver on their monetary policy and banking supervision mandates. View Article
ESMA consults on rules for External Reviewers of EU Green Bonds : ESMA’s proposals relate to the registration and supervision of entities interested in becoming external reviewers of EU Green Bonds and aim to clarify the criteria used for assessing an application for registration by an external reviewer. View Article
Sustainability claims and greenwashing: Insurance Europe and the CRO Forum share views on EIOPA’s draft opinion : They also argue that given the different regulatory approaches found across the EU, supervision requirements must apply in a uniform way in all Member States. View Article
Bloomberg: Green The Big Take UBS Banker’s Frustration Exposes Cracks in World of Climate Finance : The world’s biggest banks are quietly hanging on to carbon-intensive clients because of what they see as unrealistic demands from regulators and civil society — and the threat to their fees. View Article
Fin Tech Regulation
ESMA finalises first rules on crypto-asset service providers : The report aims to foster clarity and predictability, promote fair competition between crypto-asset service providers (CASPs) and a safer environment for investors across the Union, View Article
ESMA launches the third consultation under MiCA : ESMA is seeking input on four areas: detection of market abuse; policies of providers; suitability requirements, operational resilience. View Article
finextra: Swift hails results of CBDC connector testing : Swift says a new round of sandbox testing has found that its central bank digital currency interlinking technology can enable financial institutions to carry out a wide range of transactions using CBDCs and other forms of digital tokens, easily incorporating them into their business practices. View Article
HM Treasury: Technology Working Group publish second fund tokenisation report : The City Minister’s industry group for examining the impact of technology on the UK’s investment management sector publishes its second report. View Article
Brexit and the City
Investment Association urges FCA to retain shareholder protections in revamped listings regime : The Investment Association has called on the Financial Conduct Authority to rethink the watering down of shareholder protections as part of its proposals to reform the UK listings regime. View Article
ICGN response to FCA: Proposals for listing rules reforms (CP23/31) : We remain unconvinced that the changes proposed ..will help attract listings in the UK. They will increase costs for investors and expose them to further undue risk - with potentially significant negative implications for underlying beneficiaries including pensioners and retail investors’ savings. View Article
IPE's Kokoszka: UK pensions committee calls for fresh approach to funding regulations : Industry welcomes recommendations that will help open DB schemes thrive View Article
Reuters' Jones/Milliken: Bank of England steps up scrutiny of private equity and bank valuations : The Bank of England said it was taking a deeper look at risks from the opaque private equity sector, and why valuations of Britain's main banks are "subdued" compared with international peers. View Article
Brexit
UKandEU: The Windsor Framework: Stormont being heard… and what next? : David Phinnemore unpacks the first test for one of the processes in the Windsor Framework designed to give the Northern Ireland Assembly a say over the application of EU rules in Northern Ireland. He highlights that the UK government now faces a decision and explores what might come next. View Article
Federal Trust's Palmer/Donnelly: Video: Brexit – Can Labour bring the UK closer to the EU? : They expect that Labour’s European policy will evolve over its period in office. They warn however that cooperation with the EU may be limited if the Labour Party cannot overcome the traditional distrust of British politicians towards the EU’s institutions. View Article
IRSG Report - Financial Services Priorities for the Italian G7 and Brazilian G20 Presidencies : The report outlines seven priorities with corresponding recommendations, namely on carbon pricing, sustainability disclosures, AI, cyber security, data flows, WTO reform and global regulatory fragmentation. View Article
Follow us on  
About this email
If you do not wish to receive these e-mails, please click this link If you wish to add a colleague, please inform: office@grahambishop.com
Euro Comment Limited PO Box 2002, Battle, East Sussex, TN33 0WL, UK Tel:+44 (0)1424 777123 Email: office@grahambishop.com (Registered in England and Wales No. 7984039)
|