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09 October 2014

This week in "Brussels"


Headlines include: Bloomberg: Global banks face 25% loss-absorbency rule in FSB plan, FT: Banks to change rules governing derivatives market, Frequently asked questions on the Basel III leverage ratio framework.

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Asset Management Corporate Governance/Accounting Financial Services Policy
Graham's Articles, Comments & Speeches Think Tanks/EP groups About this email

  Articles from 02 October 2014 - 09 October 2014

  Banking
 
 
Bloomberg: Global banks face 25% loss-absorbency rule in FSB plan
The largest global banks will have to hold more capital and liabilities than previously reported that can automatically be written off in a crisis -- as much as a quarter of risk-weighted assets -- as regulators take on lenders deemed too big to fail.
FT: Banks to change rules governing derivatives market
The world's biggest banks have agreed to change rules that govern the $700 trillion derivatives market.
Bank for International Settlements: Frequently asked questions on the Basel III leverage ratio framework
The BCBS has issued FAQs on the Basel III leverage ratio. To promote consistent global implementation of the requirements, the BCBS has agreed to periodically review FAQs and publish answers along with any technical elaboration of the standard and any interpretative guidance that may be necessary.
Bank for International Settlements: Operational risk - Revisions to the simpler approaches - consultative document
Bank for International Settlements: This consultation paper sets out the Committee's proposed revisions to the standardised approach for measuring operational risk capital.
Bank for International Settlements: Seventh progress report on adoption of the Basel regulatory framework
This updated Progress report on adoption of the Basel regulatory framework provides a high-level view of Basel Committee members' progress in adopting Basel II, Basel 2.5 and Basel III standards as of end-September 2014.
Bank for International Settlements: Review of the principles for the sound management of operational risk
This paper reviews banks' implementation of the 2011 Principles for the Sound Management of Operational Risk. The principles embody the lessons from the financial crisis and evolving sound practice in operational risk management.
European Banking Authority reports on Additional Tier 1 (AT1) of EU institutions
The report presents the first results of the review done by the EBA on the issuances of Additional Tier 1 (AT1) capital instruments. The CRR tasks the EBA with monitoring the quality of own funds instruments issued by institutions across the EU. This review is preliminary.
European Banking Authority consults on treatment of liabilities in bail-in
The EBA launched a consultation on draft Guidelines clarifying the interrelationship between the sequence in which liabilities should be written down or converted when the bail-in power introduced by the BRRD is used, and the hierarchy of capital instruments in the CRR.
European Banking Authority consults on group financial support
The EBA launched a consultation on draft RTS and Guidelines specifying the various conditions for the provision of group financial support, and on draft ITS on the disclosure of group financial support agreements.
Risk.net: German banks attack Basel charge for banking book rate risk
Market participants have slammed regulators' attempts to draw up a standard capital charge for interest rate risk in the banking book, saying draft plans are not satisfactory and will struggle to reflect the risk profile for some products, including mortgages.
Bank of England announces proposals to strengthen the financial system through structural reform
The Bank of England has published four papers that propose changes to improve the resilience and resolvability of deposit-takers and reduce the disruption to customers and the system if a deposit-taker or insurer fails.
 
  Securities
 
 
Cross-border concerns are ISDA priority
The International Swaps and Derivatives Association’s CEO, Scott O’Malia, reflects on his first weeks.
Financial Times: Financial crisis overhaul for credit swaps
More than 1,400 institutional investors, hedge funds and banks have signed up to the provisions for credit default swaps (CDS), which were developed by banks, market infrastructure operators and the International Swaps and Derivatives Association (ISDA).
AFME understanding of T+2 Approach for migration on October 6
AFME members have agreed that, for the purposes transition to T+2, they will follow the approach outlined by Bloomberg and Reuters as clients require certainty about treatment of their transactions with effect from 6th October.
International Capital Market Association: CSD Regulation - Migration to T+2
The settlement period for most securities has been harmonised and set at a maximum of two days after the trading day for the securities traded on stock exchanges or other regulated markets.
NYSE Regulation to perform market surveillance, investigation and enforcement program for NYSE Group exchanges
NYSE Group announced NYSE Regulation will directly perform the market surveillance, investigation and enforcement functions for NYSE Group’s three equities exchanges and two options exchanges upon the expiration of the contract with FINRA on December 31, 2015.
IFR: ESMA lightens frontloading burden
Europe’s key derivatives regulator has reduced the burden that swaps counterparties face as part of a requirement to retrospectively load derivatives into central clearing. However, in its attempt to ease congestion, ESMA may have unleashed a new stumbling block for the industry.
ESMA consults on draft standards for the clearing of foreign-exchange non-deliverable forwards
ESMA published a consultation on regulatory technical standards (RTS) it has to develop under the European Markets Infrastructure Regulation (EMIR) for the clearing of foreign-exchange non-deliverable forwards.
ESMA publishes 2015 Work Programme
ESMA published its 2015 Work Programme which sets out its planned activities, budget and staffing levels for the coming year.
 
  Insurance
 
 
Insurance Europe: Providing insight - How to balance regulation and growth
Insurance Europe published an insight briefing called Insurers, regulation & stability, which examines the balancing act required to ensure appropriate regulatory scrutiny, while also providing a workable, competitive framework for insurers to maintain their role as long-term investors.
Geneva Association: How should resolution regimes for insurers be established?
Mr. Shinya Kobayashi, Policy Advisor for the IAIS, investigates how resolution regimes for insurers have been strengthened in Japan and analyses how the developments in Japan can help the establishment of resolution regimes for insurers in the global context.
Risk.net: Watered-down matching adjustment would be ‘utterly worthless'
Certain UK insurers are reconsidering whether to apply for the Solvency II matching adjustment (MA) as regulatory communications suggest the benefits of the measure could be significantly watered down.
EIOPA: Consultation paper on conflicts of interest in direct and intermediated sales of insurance-based investment products
The European Insurance and Occupational Pensions Authority welcomes comments on the Consultation Paper on Conflicts of Interest in direct and intermediated sales of insurance-based products (PRIIPs).
 
  Asset Management
 
 
IPE: Jonathan Hill to 'deepen single rule book', including solvency rules
The EP should be involved in the drafting of delegated acts, according to Jonathan Hill, who insisted he did not want to “discourage” the development of a Continental pensions market.
Hedgeweek: Regulation puts US hedge funds firmly in the spotlight
The SEC has become increasingly active in monitoring the activities of hedge funds to ensure protection of investor interests. The fact that they now have enormous amounts of information on hedge funds under Dodd-Frank is proving effective, not to mention improved technology capabilities.
Hedgeweek: Regulation drives wider range of reporting solutions
With the AIFMD, together with the introduction of EMIR and Foreign Account Tax Compliance Act (FATCA), fund administrators are facing big challenges in getting up to speed on the directives.
Hedgeweek: Getting around AIFMD
The EU’s Alternative Investment Fund Managers Directive (AIFMD) has essentially created a vast ‘Fortress Europe’.
IOSCO issues report on market-based financing for SMEs and infrastructure
IOSCO published a research note on market-based long-term financing solutions for SMEs and infrastructure.
PensionsEurope Position Paper on the proposal for an IORP II Directive
PensionsEurope welcomes that the proposal for an IORP II Directive does not contain new solvency capital requirements for IORPs. This would be very detrimental to the occupational pension sector, the members and the beneficiaries.
EIOPA’s Work Programme 2015
EIOPA’s strategy was restructured into five strategic goals, aimed at improving the functioning of the internal market, in particular by ensuring a high, effective and consistent level of regulation and supervision in the EU, with a focus on insurance and pensions.
 
  Corporate Governance/Accounting
 
 
IASB/Hans Hoogervorst: 'Keeping capitalism honest'
Hans Hoogervorst, Chairman of the IASB, participated in a panel discussion entitled: “Is improved corporate governance a key driver for sustained market development” at the 2014 IOSCO Annual Conference in Rio de Janeiro, Brazil.
FEE responds to the European Commission's questionnaire on the IAS Regulation
FEE has published its response to the EC questionnaire on the impact of IFRS in the European Union. The published results will feed into the EC’s review of the IAS Regulation.
EFRAG commented on the IASB’s ED Investment Entities: Applying the Consolidation Exception
EFRAG published its final comment letter on the IASB’s ED Investment Entities. It disagrees with the second proposal on consolidating entities; but agrees in other areas.
ACCA: Implementing the new audit reform
A roundtable hosted by Sajjad Karim MEP, and jointly organised by ACCA and EGIAN at the European Parliament concluded that the challenge is implementing the new requirements in a consistent and constructive way.
 
  Financial Services Policy
 
 
Mario Draghi on ECB purchase plan and inflation
ECB President Mario Draghi spoke at a news conference in Naples, Italy, about interest rates, the euro-area economy and details of the ECB's purchase of covered bonds and asset-backed securities.
European Central Bank: Interview with Danièle Nouy
Interview with Danièle Nouy, Chair of the Supervisory Board of the Single Supervisory Mechanism. 'Consumers of banking services can indeed view the SSM as part of an adequate response to the effects of the crisis' he said to the Times of Malta.
Sabine Lautenschläger: National supervision in a European system - what is the new balance?
Speech Ms Sabine Lautenschläger, Member of the Executive Board of the European Central Bank, at the Fifth FMA (Austrian financial market authority) supervisory conference.
 
  Grahams Articles, Comments & Speeches
 
 
Benefits of the Capital Market Union: getting the regulatory framework right
A banking union would pool sovereignty massively, but a capital market union can offset that whilst deepening the single market
 
  Think Tanks/EP groups
 
 
A Socialist PM in the City – a look at France beyond the clichés
Last Tuesday the French Prime Minister, Manuel Valls, was in London, meeting David Cameron and speaking about the economy at London’s Guildhall. Mr Valls’ visit was the second in two months by a senior French Minister emphasising the commitment of the Hollande government to serious economic and structural reform, writes BI Research Director Nick Kent.
 

 


© Graham Bishop

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