Articles from 19 - 25 March 2021
General Financial Policy
Work begins on the Conference on the Future of Europe : The work on the Conference on the Future of Europe has officially started with the constitutive meeting of the Executive Board held on 24 March.
Breugel: New EU insolvency rules could underpin business rescue in the COVID-19 aftermath : Corporate bankruptcies are set to rise in the context of COVID-19. EU countries should speed up adoption of recent insolvency reforms and, in addition, offer consistent treatment to restructuring finance.
Banking Union
The EBA takes steps to address ‘de-risking’ practices: Three instruments clarify that compliance with anti-money and countering terrorist financing (AML/CTF) obligations in EU law does not require financial institutions to refuse, or terminate, business relationships with entire categories of customers that they consider to present a higher ML/TF risk.
Retail payments: Council supports action to promote instant payments and EU-wide payment solutions : EU member states want to make it easier for consumers to pay in shops, and to make e-commerce transactions widely available, convenient and safe across the EU.
The Economist: America used to be behind on digital payments. Not any more : PayPal, Stripe and others are only just getting started
Capital Markets Union
The Commission welcomes the European Parliament’s and the Council’s technical approval of rules on the pan-European personal pension product : Personal pensions: Commission welcomes the European Parliament’s and the Council’s technical approval of rules on the pan European personal pension product (“PEPP”), an EU framework to address pension gaps and pave the way for an EU-wide personal pensions market
CCP Supervisory Committee Chair delivers keynote speech at the Derivatives Forum Frankfurt 2021 : Supervisory convergence aims to ensure that the requirements in EMIR are applied comprehensively and consistently to EU CCPs and that the supervisory activities of national competent authorities are fully aligned when mitigating risks for financial stability.
ICMA publishes landmark 40th survey of the European repo market : The survey, which calculated the amount of repo business outstanding on 9 December 2020, from the returns of 60 financial institutions sets the baseline figure for the outstanding size of the European market at EUR 8,285 billion compared with EUR 7,885 billion in June 2020 and down from the record high of EUR 8,310 billion in the December 2019 survey.
Vox: ‘Dash for cash’ versus ‘dash for collateral’: Market liquidity of European sovereign bonds during the Covid-19 crisis : In March 2020, a ‘dash for cash’ driven by the Covid-19 crisis affected the liquidity of the US Treasury bonds market as well as numerous other financial markets around the globe. This column investigates how euro area sovereign bond markets fared during the same period.
Better Finance: Capital Markets Union at Risk as European “Retail” Investors have less and less access to Equity Market Data : New research by BETTER FINANCE[1] found that the equity market data published by the four largest EU equity markets (in 2019, according to ESMA) on their websites are either totally or partially[2] de facto not accessible for non-professional users.
CEPS: Can responsible investing encourage retail investors to invest in equities? : The low participation of retail investors in the equity market is a concern for many countries. It is a necessary condition for the development of capital markets in Europe and a key factor for funding post-Covid economic recovery.
Environmental, Social, Governance (ESG)
Wirecard: MEPs call for new audit rules, protection for whistle-blowers and EU supervision : MEPs on the Economic and Monetary Affairs and Legal Affairs committees exchanged views with experts on lessons learned from the Wirecard collapse and shortcomings in supervision.
MEP Giegold: 200+ finance professionals call for credible rules in an open letter to the EU Commission : The EU Commission is currently finalising the delegated acts that shape the rules for Sustainable Finance. The so-called taxonomy will determine which financial products and investments can be labelled as green and sustainable and which cannot.
CFA Institute Launches First Global Certificate in ESG Investing : New global education program sets standard, enabling investment practitioners to analyse and integrate ESG factors in their daily practice
IPE: Deconstructing 5 Myths about ESG in Index Investing and Tracking Error Considerations : Indexing: A Smart Choice for Sustainable Investing. Indexing is a great choice for investors wishing to incorporate ESG in their portfolios and achieve long-term sustainable returns.
Fin Tech Regulation
Digital Day 2021: EU countries commit to key digital initiatives for Europe's Digital Decade : Ministers representing EU Member States signed three Declarations to pool efforts and resources to promote international connectivity, incentivise the rollout of clean digital technologies and improve the regulatory environment for start-ups and scale-ups. These tangible commitments will help accelerate Europe's green and digital transformation and will contribute to the vision and goals of Europe's Digital Decade.
Blomberg: Bitcoin Rally Stirs BofA Alarm on ‘Enormous’ Surge in Energy Use : Coin accounts for 0.4% of global energy consumption, BofA says Consumption may rival that of some of the largest countries
BIS: Multi-CBDC arrangements and the future of cross-border payments : Cross-border payments are inefficient, and technology could play a role in making them better. One means could be through interoperating central bank digital currencies (CBDCs), forming multi-CBDC (mCBDC) arrangements.
BuBa: DLT-based securities settlement in central bank money successfully tested : Deutsche Börse, Deutsche Bundesbank and Germany’s Finance Agency have developed and successfully tested a settlement interface for electronic securities, working with a range of other market participants.
Friends' Standard Services
171st Brussels 4 Breakfast: video with Graham Bishop, Fiona Wright (Brunswick) and Brian Polk (PWC) : There are the negotiations on a MoU, there's the progress (or lack of it) on longer term relations between the EU and UK (and on which 'third country' model the EU should apply). There's also Fabio Panetta's important intervention in the clearing debate, there's the new focus on AML ... View Article
Graham Bishop: The politics of Brexit: Ending the City’s Dominance of European Finance : The Victorian statesman Lord Palmerston famously said 200 years ago “Nations have no permanent friends or allies, they only have permanent interests”. Today, differing views on “permanent interests” fundamentally divide the United Kingdom from the European Union. View Article
Economic Policies Impacting EU Finance
MEPs lay out plans for a tax system fit for the digital age : MEPs called for a reset of outdated international tax rules, including the setting of a minimum effective corporate tax rate and that the EU should go it alone if global negotiations fail.
Taxation: Council adopts new rules to strengthen administrative cooperation and include sales through digital platforms : A large and growing number of individuals and businesses use digital platforms to sell goods or provide services. However, income earned through digital platforms is often unreported and tax is not paid, in particular when digital platforms operate across several countries
Brexit
SRB approach to the eligibility of UK law instruments without bail-in clauses after Brexit : The Single Resolution Board (SRB) has published a communication on its approach to liabilities governed by UK law without a contractual bail-in recognition clause as eligible for minimum requirement for own funds and liabilities (MREL).