Articles from 17 Dec 2021 - 13 Jan 2022
General Financial Policy
Schuman Fondation: The Challenges of the French Presidency of the Council :In its presidency programme, France identifies three main objectives: a more sovereign Europe, a new European model for growth, a humane Europe.
Remarks by President Michel following his meeting with President Macron : I really want to praise the leadership of the French Presidency, and of President Macron in particular, for being the driving force, for quite some time now, behind the debate on the idea of European sovereignty or strategic autonomy as it is sometimes called...
POLITICO: New Bundesbank boss warns high inflation could last longer than expected : ‘Monetary policy must be on guard,’ Joachim Nagel warns.
Bruegel: A role for the Recovery and Resilience Facility in a new fiscal framework : Discussions on reforming European Union fiscal rules must consider a more permanent but targeted role for the Recovery and Resilience fund to meet climate ambitions. View Article
Banking Union
EBA: Asset quality has further improved, but cyber risk remains a source of concern for EU banks : The NPL ratio declined to 2.1% and the stage 2 ratio contracted to 8.7%. Return on equity (RoE) was reported higher than pre-pandemic levels at 7.7%.
EBA alerts on the detrimental impact of unwarranted de-risking and ineffective management of money laundering and terrorist financing risks : Providing access to at least basic financial products and services is a prerequisite for the participation in modern economic and social life and de-risking, when unwarranted, can cause the financial exclusion of legitimate customers.
EBF feedback to the European Commission’s proposed AML Package : The European Banking Federation (EBF) is fully supportive of the Commission’s overarching objective to address the ineffectiveness of the current EU AML framework. Bearing in mind the necessary lead-time and efforts to get the AML Package adopted and implemented, this momentum is a unique opportunity to improve the framework.
CEPS: Consumer Credit Directive review - Change needed : The existing CCD has introduced a number of benefits for consumers, however, it is now somewhat outdated due to various technological and market developments since its adoption.
Capital Markets Union
Insurance Europe: Major changes to EU product liability rules could undermine insurers’ ability to cover certain risks : New rules should only be considered in the case of a clear protection gap, which currently does not exist.
EIOPA publishes report on the application of the Insurance Distribution Directive : EIOPA has identified some difficulties in applying the demands-and-needs test, and continues to raise concerns related to the sale of unit-linked life insurance products and mortgage and consumer credit protection policies.
IOSCO Investment Funds Statistics Report : It covers hedge funds and open-ended and closed-ended funds, is the first of its kind by IOSCO and is underpinned by a broad data survey to which 50 IOSCO members have contributed; representing almost $ US50 trillion, or 67% of total asset under management of the global investment funds universe.
AFME: Industry Approach to CSDR Settlement Discipline Regime : We support the political agreement by the EU legislators on changes to Regulation (EU) No 909/2014 (“CSDR”) that allow for a delay to the implementation of mandatory buy-ins.
ICMA Quarterly Report First Quarter 2022 : The Quarterly Assessment is on EU/UK capital market fragmentation in a global context
Automation of debt issuance: ICMA references over 45 solutions : Digitisation of debt issuance continued apace in 2021. ICMA’s latest review of its primary markets technology directory, conducted in Q4 of last year, saw the addition of more than 10 platforms or applications for the issuance of debt instruments.
Better Finance: Shareholder Rights Directive II fails to deliver for European cross-border shareholders : Some of the main obstacles to shareholder engagement derive from the complex chains of intermediaries and the use of omnibus accounts – with intermediaries or nominees who hold shares for individual investors ...
Environmental, Social, Governance (ESG)
EU Taxonomy: Commission begins expert consultations on Complementary Delegated Act covering certain nuclear and gas activities : To ensure transparency, the Commission will amend the Taxonomy Disclosure Delegated Act so that investors can identify if activities include gas or nuclear activities, and to what extent, so they can make an informed choice.
GRI looks forward to working with new ISSB chair : Financial and sustainability standard setters need to work together...The announcement by the IFRS Foundation that Emmanuel Faber is to be the first chair of their newly established International Sustainability Standards Board (ISSB) has been welcomed by GRI.
AFME publishes recommendations for a successful EU Green Bond Standard : AFME supports the proposals to provide investors with transparency, comparability and confidence in the credibility of the bond’s environmental credentials. ... it is important that the new EU GBS label is seen as a credible standard and also attractive to issuers and investors.
Protecting Customers
EBF response to ESMAs Call for Evidence on certain aspects relating to retail investor protection : In the context of the CMU action plan, it is essential to ease retail investors’ access to financial markets while ensuring a high level of investor protection.
BETTER FINANCE response to ESMA's Call for Evidence on Retail Investor Protection Topics : BETTER FINANCE welcomes this call for evidence from ESMA on retail investor protection topics but regrets that it is confined to securities markets (MiFID II) topics only as these financial instruments make up for only a third of the financial balance sheets of EU27 households
Fin Tech Regulation
SUERF: The encrypted threat: Bitcoin’s social cost and regulatory responses : While Bitcoin raised the attention for the potential of distributed ledger technology (DLT), it fails to deliver on its promises but comes at high costs. It is unfitted and inefficient as a means of payment but used extensively for illicit activities. It is unsuitable as an investment asset and neither empowers, nor relieves the sovereign individual from the state.
Economic Policies Impacting EU Finance
EURACTIV:Macron, Draghi call for reform of EU fiscal rules : French President Emmanuel Macron and Italian Prime Minister Mario Draghi called on Brussels to reform its fiscal rules to allow greater investment spending while acknowledging the necessity to reduce debt. View Article
Brexit and the City
FT: The EU vs the City of London: a slow puncture : Brexit hurt the financial centre but lack of political will is holding back Europe’s efforts to reduce its dependence on the UK
City AM: Brexit passporting: Little appetite among EU finance firms to stay in London as FCA applications disappoint : It appears that many European financial services firms are not interested in continuing to be authorised in the City, as only half of EU firms that were given a temporary license to operate in the UK – immediately after Brexit – have applied for full authorisation, a Freedom of Information request has revealed.
FESE: Exchanges raise concerns over ESMA’s Annual Statistical Report on 2020 data : In 2020, the UK was still part of the EU single market, accounting for 70% of turnover in EEA equity. By excluding the majority of trading in EEA instruments, the report portrays a misinterpreted picture of markets, says the Federation of European Securities Exchanges (FESE).
EY Financial Services Brexit Tracker: Brexit activity muted over 2021, with total relocations revised down and few major operational announc : EU regulators show ongoing pragmatism in managing stability and other risks as they build greater financial strength, but maintain pressure on firms to complete headcount and operational moves that have been delayed by the pandemic
Bloomberg: Morgan Stanley Boosts Paris as Trading Hub With Research Center : Bank could hire, relocate 50 staff, person familiar says; Paris becoming EU trading hub as banks, funds seek talent
Bloomberg: JPMorgan's Paris Traders Are Only Part of the Threat to London : A year after Brexit, the EU’s finance hubs are taking shape. Bloomberg reporters look at the merits of Paris, Frankfurt, Dublin, Amsterdam and Milan.
Brexit
UKandEU's Faull: This England? Blessed plot? Conspiracy of cartographers? : The governance of the United Kingdom is complex (and even more so if one adds the Isle of Man and Channel Islands). Scotland has a devolved Parliament and government; so does Wales, albeit with fewer powers.
CER:One year on, it’s clear that Brexit has failed on its advocates’ own terms : Now that the Brexit deal has been in force for a year, it’s worth looking at initial claims from the politicians who forced through an exit from theEU’s single market.David Davissaidthetrade dealwould deliver “the exact same benefits” as membership of the EU.
Briefingsfor Britain: Brexiteers beware – David Frost’s departure is disastrous : Lord Frost was not only an effective negotiator but also one of the few UK ministers to fully grasp the intellectual case for Brexit. His resignation looks to have resulted, at least in part, from the UK government backsliding on the Northern Ireland protocol and failing to take bold moves
POLITICO: EU’s Šefcovic warns of Brexit deal ‘collapse’ if UK exits Northern Ireland Protocol : Continuous British threats to exit post-Brexit trade rules for Northern Ireland are "enormously disruptive," European Commission Vice President Maroš Šefcovic said, warning the entire deal with the U.K. would collapse if such rules were canceled.