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10 October 2013

This week in "Brussels"
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Articles from 03 October 2013 - 10 October 2013

Banking

Barnier says ESM could take on banking resolution
Barnier has suggested the bloc's executive Commission could take on the role of the new banking resolution agency for a limited period only, later handing over the role to the ESM. 
WSJ: EU states divided on planned bank resolution mechanism
The fear is that under the current plan, a government could be forced to spend money winding down one of its banks against its will. 
FT: Setback for Brussels as lawyers back Berlin line on Banking Union
Brussels' blueprint for European Banking Union has suffered a serious setback after the legal adviser to EU finance ministers sided with Germany and concluded the proposed manner of centralising some powers to shut banks breached the law. (Includes Schäuble comment.) 
FT: EU Banking Union faces fight over safety net funding
Europe's Banking Union project faces a protracted fight over who pays to repair the system, as the EU debates public backstops to plug any holes exposed by next year's stress-test of lenders. 
VP Rehn's blog: Banking on a sustainable recovery in Europe
"Cleaning up balance sheets is a pre-condition for growth but also for resuming the path towards more genuine financial integration in Europe, namely through the creation of the Banking Union." 
FT: Penalties planned for banks receiving ECB aid
EU regulators overseeing next year's long-awaited stress tests of the region's banks are preparing to penalise any lender that remains reliant on the ECB's landmark cheap funding scheme. 
Peterson Institute/Ubide: How to form a more perfect European Banking Union
This Policy Brief argues that although some aspects of the current Banking Union project will improve the soundness of the euro area banking system, potential unintended consequences may flow from the project, which many analyses have overlooked. 
Simon Nixon: High hopes, and hurdles, for bank supervisor
Success hinges on the ECB's ability to face down powerful political interests, an unprecedented test of its bureaucratic skill, writes Nixon for the WSJ. 
EBF publishes recommendations on macro-prudential oversight
The EBF made recommendations in nine areas, including stress test planning, transition to the SSM and communication strategy. 
BIS: Progress report on implementation of the Basel regulatory framework
This updated progress report provides a high-level view of Basel Committee members' progress in adopting Basel II, Basel 2.5 and Basel III, as of end September 2013. 
ECB/Coeuré: Liquidity regulation and monetary policy implementation – From theory to practice
Coeuré discussed the recent developments on liquidity regulation and the interplay between the new liquidity requirements and monetary policy implementation. 
Revised deadlines for the delivery of the EBA technical standards
Having considered the grounds put forward by the EBA, the European Commission responded with an agreement to the revised deadlines for the submission of certain CRR regulatory products. 
EBA publishes end of term report of its Banking Stakeholder Group (BSG)
The document covers the outputs of the Group between March 2011 and September 2013, as well as information on the BSG's working methodology and its interaction with the EBA. 
Bruegel/Darvas & Merler: The European Central Bank in the age of Banking Union
In addition to the ECB's primary objective of price stability, and secondary objective of supporting EU economic policies, the authors also identify 10 new tasks related to monetary policy and financial stability. 

Securities

ESMA publishes 2014 Work Programme
The Work Programme is an extension of the High-Level Work Programme submitted to the European Commission as part of the budget request for 2014. 
ESMA/Maijoor address to BWF/ICMA Capital Markets Conference in Frankfurt
Maijoor guided the audience through the past, present and future of EMIR and ESMA, also looking at ESMA's main objectives. 
ESMA publishes guidelines on written agreements between members of CCP colleges
ESMA has published Guidelines and Recommendations which define the written agreement that a CCP's national supervisor should propose as part of its establishment of a supervisory college under EMIR. 
Banking Technology: US-Europe derivatives rulemaking deal "falls at first hurdle"
Senior financial industry executives have expressed disappointment at the failure of the US and European securities regulators to realise a deal over derivatives reforms and swap execution facilities, the new category of US execution venues brought in under the Dodd-Frank Act. 
IPE: Ills of derivatives largely overstated
The alleged opacity and lack of regulation for derivatives trading is "largely overstated" in asset management, and asset managers should be seen as professional investors and not "naïve derivatives users", a report has claimed. 
Reuters: EU policy-makers grapple with scope of commodity trade law
The proposed changes to EU rules that could come into effect from next year would deal a shock to multi-trillion dollar markets used to trading beyond regulatory scrutiny. 
ISDA: CDS Market Summary - Market Risk Transaction Activity
This research paper claims that in the post-compression era, market risk transaction activity, not notionals outstanding at a point in time, is the optimal measure for understanding and analysing CDS market activity.  
Joint Committee of ESAs publishes list of identified Financial Conglomerates 2013
The latest version of the list shows 75 financial conglomerates with the head of group in an EU/EEA country, one with the head of group in Australia, two with the head of the group in Switzerland, and two with the head of group in the US. 
IRSG response to Swinburne report on non-bank resolution
The IRSG Post Trade workstream has commented on Kay Swinburne MEP's draft own-initiative report on a recovery and resolution framework for non-bank financial institutions. 
Fed/Dudley: Introductory remarks at workshop on "Fire Sales" as a driver of systemic risk in tri-party repo & other secured funding markets
Dudley gave a brief overview of some of the problems that had surfaced in this market during the financial crisis of 2008, recognised the improvements that had occurred since then, and highlighted significant vulnerabilities that persist. 

Insurance

EIOPA publishes Action Plan 2014/15 for colleges / List of cross-border insurance groups for which a college is in place
The focus of the Action Plan is the further development of consistent risk-based supervision according to Solvency II requirements. The list of groups for which a College is in place aims at increased transparency. 
Risk.net: Solvency II interim reporting requirements were 'too ambitious' – EIOPA
Original proposals for Solvency II interim measures were overly "ambitious", according to the leader of the project to develop the guidelines at EIOPA. 
Risk.net: Shadow banking crackdown raises transparency concerns for insurers
Proposals to increase transparency of shadow banking activities could require insurers to disclose commercially sensitive information on securities lending, experts are warning. 
Insurance Insight: Europe - Regulatory remuneration
European insurers are facing an unprecedented rate of regulatory change, a burden that comes with serious cost implications. Are they coping with the increasing cost of regulation? 
Risk.net: Systemic risk definition for insurers flawed, says former IAIS counsellor
Insurance standard-setters should have developed a more sophisticated definition of activities that cause systemic risk in their assessment methodology for identifying G-SIIs, says a former economic counsellor at the IAIS. 
Risk.net: National authorities have 'moral obligation' to introduce systemic risk measures - IAIS secretary general
The FSB has a "clear political mandate" to impose enhanced measures for the regulation of SIIs, which national authorities should respect, insists Yoshihiro Kawai, secretary general of the IAIS. 
IAIS commits to develop a global insurance capital standard by 2016
The IAIS announced its plan to develop a risk-based global insurance capital standard (ICS) by 2016. Full implementation will begin in 2019 after two years of testing and refinement with supervisors and internationally-active insurance groups (IAIGs). 
GFIA: First annual report published
The report sets out the advocacy activities the GFIA has undertaken on behalf of the world's insurers since it was founded on 9 October, 2012. 

Asset Management

EIOPA appoints new stakeholder groups
Following an open selection process, EIOPA's Board of Supervisors has appointed the members of its Insurance & Reinsurance (IRSG) and Occupational Pensions Stakeholder Groups (OPSG). 
FT: Hedge funds step into the shadows
Some of the world's best-known hedge funds have stepped into the shoes of Wall Street banks and expanded into the $5 trillion "repo" market, where financial companies lend out their assets in exchange for short-term loans. 
IPE: PensionsEurope to launch advisory group for multinationals
PensionsEurope is in talks with a number of companies in Europe and abroad to join its newly-launched multinational advisory group, which aims to give large companies a voice on pensions-related issues. 
IPE: Dutch government moves to middle path on new FTK after consultations
The new Dutch financial assessment framework (FTK) is to accommodate a single pensions contract, rather than two, as had been envisaged initially. 
IPE: ERAFP calls on French regulators to allow infrastructure investment
The €14 billion pension fund for French civil servants (ERAFP) has asked local regulators to soften rules towards alternative asset classes, allowing it to make its first investments in infrastructure. 
IPE: Irish auto-enrolment 'a bit of time away', minister concedes
The introduction of auto-enrolment in Ireland will likely be postponed until the country's economy recovers and its Social Insurance Fund is no longer running a deficit, the minister for Social Protection has said. 
IPE: Can a pension fund be too big to fail?
Will the Financial Stability Board extend the 'too-big-to-fail' resolution to pension funds? Pension experts are adamant this should not be the case. 

Corporate Governance/Accounting

FRC: Accounting standards are part of legally-binding corporate reporting framework
The FRC welcomes the involvement of investors and others in the debate about the effectiveness of the financial reporting framework. On the specific issue of its legality, the Department for Business has confirmed that the concerns expressed by some are misconceived.  
Reuters: UK wants 'prudence' back in IFRS
Britain still believes a specific reference to "prudence" would improve IFRS, but reasserted that the rules as they stand are legally binding, hoping to end any uncertainty over the matter. 
IFAC and IPSASB represented at World Bank Group-IMF seminar
IFAC Chief Executive Officer Fayez Choudhury and IPSASB Deputy Chair Ron Salole recently participated in a World Bank Group-IMF seminar, "Strengthening Fiscal Transparency and Government Accounting", held in Washington, DC. 
IASB increases support for teachers of IFRS
The IFRS Foundation Education Initiative announced the publication of its free-to-download Framework-based teaching material in all of the United Nations languages (Arabic, Chinese, English, French, Russian and Spanish) and Portuguese. 

Financial Services Policy

IMA/Patterson: Euro squabbling delaying disclosure rules
In an article for Money Marketing, Patterson writes that the EP needs to stop arguing about what qualifies as a PRIP and push on with introducing the much-needed key information document. 
Telegraph: UK's CBI boss in talks with Germany to reform EU laws
The Confederation of British Industry is to work with its German counterpart in an attempt to reform parts of the EU's regulations. 
MEPs pave the way for greater professional mobility in the EU
"The text adopted today will make it easier for professionals who wish to establish themselves or provide their services in other Member States to have their qualifications recognised, whilst guaranteeing an improved level of protection for consumers and citizens", said Barnier. 

International/G20

IMF says countries should 'buckle up', the move to financial stability could be bumpy
"Investors' faith in euro area bank balance sheets must be restored ... and Banking Union completed", the IMF has said in its latest Global Financial Stability Report. 
Global growth patterns shifting, says IMF WEO
Global growth is still in low gear and the drivers of growth are shifting, says the IMF's latest World Economic Outlook (WEO) report. The euro area is expected to pull out of recession gradually, with growth reaching 1 per cent in 2014. 
IMF: Central banks can plan smooth exit from policies to fight crisis
The IMF's latest paper takes stock of unconventional monetary policies and focuses on their global impact so far, looking ahead towards exit challenges and prospects for global policy collaboration. 

Graham Bishop’s Articles and Speeches

Graham Bishop: Timeline to Merkel III German Government and EU policy developments
"Europe" has been on tenterhooks for this election for many months – but now the outcome seems inconclusive! 





© Graham Bishop

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