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04 May 2023

Friends Weekly Newsletter




Welcome to our Friends weekly e-mail.

 

My highlights of the week: The holiday-shortened week on the European mainland was complemented by a surge in Brexit commentary. There are a limited number of Parliament plenary sessions until dissolution ahead of elections next (May?) so the rush is on to finish legislation. The institutions joined to commit to finishing all the CMU proposals from the 2020 Action Plan. The co-legislators must finalise 7 measures while the Commission has to present a further 3 proposals soon. The ramifications of the American banking crisis are triggering a wide range of thoughts - some radical - about the size of banks, their capital needs and deposit insurance. EFAMA expressed its concern about backtracking on the consolidated tape and the EBF commented on the EU’s Listing Act to make EU markets more attractive. Across the Channel, the FCA launched a consultation on how to do this for UK markets threatened by competition from the US. However, this seems to have launched a far deeper questioning of the malaise of UK equity markets. The FT joined a chorus of media comments about the attractions of the Paris financial centre. Nealy half of business leaders want stability rather than a bonfire of EU regulations. The people are noticing the Brexit hit: polls show support for Rejoin is trending ever-higher with nearly half of electors now wanting to Rejoin the EU.

Graham Bishop


Articles from 28 April - 4 May 2023

Policy impacting Finance

Remarks by Paschal Donohoe following the Eurogroup meeting of 28 April 2023 : I made the point to all of my colleagues here today that in our statement of last summer we had committed ourselves to completing this work within the current legislative cycle. View Article
POLITICO: FSB's Knott - Top global regulator warns of ‘massive adjustment’ for financial system : Klaas Knot is more worried about risks stashed at “nonbanks” — where authorities have less visibility on hidden losses. View Article
CEPR's Brunetti: Big banks must become globally resolvable – or significantly ‘smaller : This column argues that an in-depth analysis of the global resolution framework by both regulators and academics is needed. The main question is whether a resolution of a global systemically important bank is indeed feasible in plausible scenarios.  View Article
Delors Centre: Two years to go: What to expect from the 2024 European Parliament elections : Dr Manuel Müller offers an overview of what to expect from the election: On which date (and why does that matter)? What electoral law will apply? Will the lead candidate procedure come into play again? How are the European parties doing in the polls? What will happen with voter turnout? View Article
BusinessEurope: Single Market at 30: it’s time for barrier-free trade and investment in the EU : "Thirty years of the Single Market is a significant milestone to celebrate, but there are also matters of concerns due to persisting barriers and even rising fragmentation in the EU",  View Article
FT: Reading the ‘Assessment of the European Central Bank’s Supervisory Review and Evaluation Process’ so you don't have to : In praise of box-ticking  View Article

Banking Union

EBA makes supervisory reporting requirements easier to navigate : EBA launches signposting tool for supervisory reporting to assist banks in identifying and understanding the reporting requirements. The signposting tool comes in response to one of the recommendations from the June 2021 EBA Report on the cost of compliance with supervisory reporting requirements. View Article
Bruegel's Veron: The US and Swiss messes may nudge the EU towards better international bank capital standards compliance : EU banking union remains incomplete – and it is likely that the absence of banking sector turmoil in the EU will mean that pre-existing political obstacles will continue to prevent its completion any time soon.  View Article
ESBG calls upon European Institutions to ensure a level playing field in response to EPI's new instant payment solution : The solution EPI is currently building, will obviously need to establish itself in the existing competitive landscape as the unified solution and common innovation platform of the European payment ecosystem.  View Article

Capital Markets Union

Capital Markets Union: EU renews commitment to integration and development of capital markets : As representatives of the European Parliament, Member States and the European Commission, we will show political courage and determination to conclude legislative work on all the outstanding CMU legislative proposals. View Article
EBF Position Paper on the Listing Act Proposal : Listing Act – making public capital markets more attractive for EU companies and facilitating access to capital for SMEs View Article
EFAMA: Policymakers threaten to backtrack on pre-trade data for EU consolidated tape : This would be a legislative setback that European capital markets can ill afford with competing markets globally offering better trading conditions, and demonstrating the growth to prove it. (Tanguy van de Werve, DG of EFAMA) View Article
CEPR's Mueller, Nguyen, Nguyen: Loan securitisation during the transition to a low-carbon economy : This column shows that banks use corporate loan securitisation to shift climate transition risk to less-regulated shadow banking entities. This behaviour affects carbon premia in loan contracts. View Article
IPE: FINMA faces further legal action for AT1 bonds write down : The investors, represented by law firm Pallas Partners, believe the Swiss government’s emergency ordinance of 19 March, amending one issued on 16 March to give FINMA power to order the write down of AT1 capital, is invalid, and the AT1 notes must be re-stated, according to a statement issued by the law firm. View Article
IAIS: The role of supervisors in addressing natural catastrophe protection gaps : Insurance supervisors can contribute to shared efforts among public and private sectors to address protection gaps, including through supporting disaster risk assessment and risk management practices.  View Article
InsuranceEurope: The IDD works well and must remain flexible and consumer-centric : The minimum harmonisation and principles-based approach taken in the IDD allows the rules to be appropriately applied at national level, and takes accounts for the structure of the local market and consumers’ expectations. View Article

Environmental, Social, Governance (ESG)

Response of the Platform on Sustainable Finance to the call for feedback on the draft Taxonomy Delegated Acts : The Platform has made a series of recommendations aimed at improving the usability and applicability of criteria of specific activities; Some criteria are not described with sufficient clarity to allow their standardised application and verification. View Article

Fin Tech Regulation

ISDA: Navigating Bankruptcy in Digital Asset Markets: Digital Asset Intermediaries and Customer Asset Protection : This whitepaper – the second of two papers covering digital assets – examines how digital assets may be held by customers through intermediaries and considers how those assets can be protected following an insolvency of the intermediary, with a specific focus on English and US law. View Article

Brexit and the City

FCA proposes to simplify rules to help encourage companies to list in the UK; Improving secondary markets : The FCA proposes to reform and streamline the listing rules in the UK to help attract a wider range of companies, encourage competition and improve choice for investors. View Article
AFME welcomes FCA proposals to improve UK listings : These are welcome proposals which will go a long way towards increasing the attractiveness of the UK as a venue for company listings. View Article
City AM: London Stock Exchange chief: FCA rule changes won’t stop the City’s decline on their own : She warned that more needed to be done outside of regulatory tweaks to keep London competitive on the international stage. View Article
Bloomberg Somerset-Webb: Who Would Want to List in London? Certainly Not You : The FCA should press ahead with proposed reforms to UK listing rules. Then think of a few more. View Article
FT: Paris shaking off ‘backwater’ tag as international banks expand : French capital is gaining momentum as a financial hub, but it still lags behind London in size View Article
IRSG response - HMT future financial services regulatory regime for cryptoassets : The group supports a positive approach towards cryptoassets, whilst being mindful of risks. Moves for the UK to build a robust regulatory regime for cryptoassets in collaboration with industry are to be welcomed. View Article

Brexit

Election Maps UK: EU REFERENDUM VOTING INTENTION : As at 30 April 2023: Rejoin 47.7%, Stay out 34.1 View Article
BCC: Reform Needed To UK Labour Market Access : The BCC welcomes the clear and well-evidenced proposals for reform of access to the UK labour market set out in the latest House of Lords' European Affairs Committee report.  View Article
IOD: Nearly half of business leaders would prefer regulatory stability rather than a bonfire of EU-retained law : How to reduce the regulatory burden of EU-retained law, 47% of Institute of Directors’ members stated that they did not want any changes, preferring instead stability in the current regulatory framework. View Article
LSE's Kinnock: Lessons from seven lean years of Brexit : Almost seven years on from the Brexit referendum, there remains uncertainty over the future UK-EU relationship. Reflecting on the lessons, Neil Kinnock argues there remains a clear case for the UK being an economic, political, social, scientific and cultural part of the Europe of the future. View Article
UK and EU's Kinnoul: The future of the UK and EU relationship : Lord Kinnoull, Chair of the House of Lords European Affairs Committee, outlines the findings of a new report from the committee on the relationship between the UK and the EU.  View Article
UKandEU's Surridge: Will Brexit matter at the next election? : Paula Surridge analyses UK in a Changing Europe’s latest Redfield and Wilton Strategies Brexit tracker poll. She looks at the influence of a party’s Brexit stance on the voting behaviour of different groups to examine how much Brexit is likely to matter at the next election.  View Article
Federal Trust's Donnelly: Is Brexit Being Sabotaged? : Despite evidence to the contrary, Dominc Raab does not want to be held accountable for his own past errors; and he claims to be a victim of saboteurs who have undermined him.  View Article
CER's Scazzieri: Can the European Political Community bring the UK and EU closer? : The EPC could help rebuild trust after the acrimony of the Brexit years, promote closer dialogue and help the EU and the UK address shared challenges. View Article

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