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30 May 2013

This week in "Brussels"
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Articles from 23 May 2013 - 30 May 2013

Banking

ECON Committee: Barnier debate highlights next steps for banking union
ECON Committee MEPs quizzed Commissioner Barnier on his upcoming proposals for dealing with banks in trouble. They pressed him to present an ambitious plan. Barnier confirmed that he did not believe a change to the treaties was required for the SRM system to be set up.  View Article
ECB/Constâncio: Implications of the SSM on the ESFS
Constâncio gave a speech at the public hearing on financial supervision in the EU on the implications of the SSM on the European System of Financial Supervision. In his view, the more Member States that take part in the SSM, the better it will be for the functioning of the ESFS.   View Article
ECB/Cœuré: The Single Resolution Mechanism - Why it is needed
Speaking at the ICMA Annual General Meeting and Conference, Cœuré elaborated on the SSM, the SRM and the common system of deposit protection.  View Article
Speech by EBA/Enria at the EC public hearing on financial supervision in the EU
Enria said that the SRM should be accompanied not only by a common resolution toolkit for the whole Union but also by clear and binding criteria in order to be able to manage the crisis and the resolution of cross-border groups smoothly.  View Article
Portuguese government: The banking union is a key priority
Portuguese Minister of State and Finance Vítor Gaspar said that banking union was a key priority for the Portuguese government, and the project must move forward as quickly as possible. (Includes link to BoP Financial Stability Report, May 2013.)  View Article
WSJ: A truce needed for Europe's banking union
The German government and European Central Bank fell out over the initial handling of Greece's debt problems, with Germany insisting on debt restructuring despite ECB resistance.  View Article
Bruegel/Mody: Germany must lead by example on fixing its banks
Berlin's proposal for banking union is a small but vital step for the eurozone, writes Mody.  View Article
Gunnar Hökmark MEP: The safest way to let banks fail
In an op-ed for the WSJ, the EP's lead negotiator on the Bank Recovery and Resolution Directive looks at a once-taboo question: Can a major bank be allowed to fail?  View Article
ECB: Financial Stability Review May 2013
The ECB concludes that several vulnerabilities in the interaction between sovereigns, banks and the macro-economy persist.  View Article
ECB: TARGET 2012 Annual Report shows increase in volume and value of payments processed
The ECB's 2012 TARGET Annual Report shows that payments in euro processed through the Eurosystem's TARGET system increased in 2012, in terms of both volume and value, compared with the previous year.  View Article
EBA consults on draft Technical Standards on liquidity
EBA launched two consultations: i) draft ITS related to supervisory reporting of additional monitoring metrics for liquidity; and ii) draft RTS on additional collateral outflows. Both consultations run until 14 August, 2013.  View Article
EBA consults on draft Guidelines on capital measures for foreign currency lending
These Guidelines complement existing guidelines related to the supervisory review process, internal governance, concentration risk, stress-testing and home–host supervisory cooperation. The consultation runs until 23 August, 2013.  View Article
BoE/Tucker: A new regulatory relationship - The Bank, the financial system and the wider economy
In his speech, Tucker reflected on the changing relationship between central banks and the business community, focusing on three facets of the relationship.  View Article
Bundesbank/Dombret: Boring banking?
Dombret said that in his view banking had become more challenging since the outbreak of the crisis. "Making banking boring does not necessarily mean making finance boring. Only think of the shadow banking issue…"  View Article
CEPS/Micossi: A Viable alternative to Basel III prudential capital rules
Micossi argues that the Basel framework for bank prudential requirements is deeply flawed and that the Basel III revision has failed to correct these flaws, making the system even more complicated, opaque and open to manipulation.  View Article

Securities

Council confirms agreement with EP on transparency requirements for issuers of securities
The Permanent Representatives Committee approved today, on behalf of the Council, a compromise reached with the European Parliament on updated transparency requirements for issuers of securities on regulated markets.  View Article
AMF publishes guide for investment management companies on the impact of the European regulation on clearing OTC derivatives
With the aim of helping investment management companies fulfil their obligations under the European regulation on OTC derivatives, CCPs and trade repositories (EMIR), the AMF has published a guide explaining the implications of this new framework.  View Article
FT: European regulators clash with US over derivatives market reforms
European regulators have clashed with the US over the timing of reforms to the $633 trillion derivatives market, in a letter urging further delays to guidelines that would extend Washington's reach overseas.  View Article
AIMA paper highlights areas for deeper international coordination of OTC derivatives regulations
AIMA has produced a paper that highlights the key areas where deeper coordination of OTC derivatives regulation is required to achieve the G20 objective of maintaining global markets.  View Article
IPE: Pension funds lack discipline in derivatives
Euroclear has warned that new rules in Europe will force pension funds and assets managers to be more disciplined with their derivatives trades in future.  View Article
CME Group: Understanding deliverable swap futures
With the Dodd-Frank clearing mandate underway, market participants are looking for more capital-efficient alternatives for their OTC activity.   View Article

Insurance

Commission consults on insurance cover for the provision of services in another Member State
The objective of this consultation is to determine the risks and obstacles individual entrepreneurs and businesses face when attempting to secure insurance cover for another Member State. The consultation runs until 16 August, 2013.  View Article
EIOPA/Bernardino interview: Solvency II guidelines
In an interview with Insurance Risk, Bernardino said: "I believe it is still possible to have Solvency II starting in 2016. If that is not the case, then later in the year or next year we will see what to do."  View Article
EIOPA/Bernardino: Introductory statement at the public hearing on the Financial Supervision in the EU
Bernardino said that in his view there were three key areas clearly needed for evolution: the strengthening of EIOPA's operational independence, the reinforcement of EIOPA's independent challenging role towards NCAs, and the enhancing of EIOPA's mandate and powers.  View Article
Insurance Europe comments on OECD draft high-level principles of long-term investment financing by institutional investors
Insurance Europe supports the substantial work developed by the OECD on long-term investment and looks forward to contributing to it further.  View Article
Insurance Europe: US tax proposals will prove costly for consumers
Insurance Europe strongly opposes bills attempting to introduce a tax on reinsurance ceded by non-US companies to their offshore affiliates, saying the proposals would create unequal treatment for EU insurers that already pay substantial rates of tax.  View Article
Risk.net: Shadow bank reforms 'should prompt review' of Solvency II money market fund charge
European policy-makers are being urged to reconsider the capital charge imposed by Solvency II on investments in money market funds, in light of plans to tighten regulation of shadow banks.  View Article
Risk.net: Life and Pensions Nordics - Regulators and insurers must respond to guarantees challenge
Solvency II must support long-term guarantees but insurers must develop simple products, says Nordea Life and Pensions' chief risk officer.  View Article
Building public trust and confidence is insurance sector's biggest challenge says CII
A report published by the CII says the general insurance sector has already taken major strides to improve standards, but stresses the importance of the profession not resting on its laurels and instead driving its own destiny.  View Article
AMICE letter to the IAIS on branch structures
In addition to other arguments in favour of permitting/maintaining branch structures, the mutual and cooperative insurance sector has a particular interest in keeping its policyholders in a host country as direct contract partners of the mutual/cooperative parent in the home country  View Article

Asset Management

Commissioner Barnier: Occupational Pension Funds (IORP) - Next steps
Commissioner Barnier has indicated his intention to come forward with a proposal for a Directive to improve the governance and transparency of occupational pension funds in the autumn of 2013. At this stage, the proposal for a Directive will not cover the issue of the solvency of pension funds.   View Article
PensionsEurope welcomes Barnier's decision to postpone new solvency rules for IORPs
CEO Matti Leppälä said: "The changes in pension landscape, and especially the shift from defined benefit to defined contribution schemes, pose many new challenges in pension fund governance and disclosure of information to scheme members and beneficiaries".  View Article
NAPF welcomes EU decision to postpone new solvency rules for pensions
NAPF commented on Commissioner Barnier's decision not to introduce new solvency rules for pension schemes in the new version of the IORP Directive. The solvency rules have been postponed indefinitely and will become a task for the next commissioner in November 2014.  View Article
IPE: European schemes breath sigh of relief on delay of solvency rule
Pension funds have responded positively to the European Commission's decision to postpone the implementation of pillar one of the revised IORP Directive.  View Article
Deutsche Bank: Deficits in French pension schemes – Need for reform
One of the areas where reforms are necessary in France which is receiving wide attention is the state pension system.   View Article
IPE: ATP warns of regulatory risk in infrastructure investment
ATP has said that Danish pension funds are willing to take on a wide range of risks when it comes to investing in greenfield infrastructure projects but the government should in return ensure a stable and favourable regulatory framework.  View Article
IPE: UK should look to Australia, force DC mergers, opposition party says
The opposition Labour party has insisted that the UK pensions regulator should be allowed to force the merger of small defined contribution (DC) funds unable to deliver low-cost pensions.  View Article
FESE members support the draft OECD long-term financing principles and make some recommendations
FESE recommends setting up public/private partnerships to produce and disseminate high quality and credible research on SMEs.  View Article
EFAMA: UCITS enjoyed largest quarterly net inflows since 2006 in the first quarter of 2013
EFAMA published its latest Quarterly Statistical Release which describes the trends in the European investment fund industry during the first quarter of 2013.  View Article
AIMA Investor Steering Committee publishes 'Beyond 60-40'
The AIMA ISC, a committee of institutional investors that undertakes educational initiatives and provides practical guidance within AIMA, has published a new paper on the evolving role of hedge funds in institutional investor portfolios.  View Article

Corporate Governance/Accounting

President Van Rompuy: Strengthening public sector accounting for sound fiscal policies in Europe
In his opening speech at the conference on European public sector accounting standards, Van Rompuy discussed the crisis and the quality of statistical data. "Harmonised public sector statistics are a common language and the basis for sound fiscal policy-making, both nationally and Union-wide."  View Article
Statement by Commissioner Barnier welcoming the agreement reached on the revision of the Transparency Directive
With this agreement, listed companies, including small and medium-sized issuers, will no longer be obliged to publish quarterly financial information, which will contribute to less administrative burden and should help to discourage short-termism on financial markets.  View Article
"Tax avoidance by big business cheats SME growth at a time when we most need it", says Sharon Bowles MEP
The ECON chair has welcomed the U-turn from the European Council on greater corporate transparency but has urged them to ensure it comes by the end of the parliamentary mandate next year.  View Article
Competitiveness Council results on audit reform
The reform of the audit market is intended to improve quality and independence of audits, to increase transparency and reinforce investors' confidence, as well as to reduce the current market concentration.  View Article
FRC: Audit Quality Inspections Annual Report 2012/13
The FRC published the 'Audit Quality Inspection Annual Report' for 2012/13. It includes an overall assessment of audit quality, together with a number of key messages for audit firms and audit committees.  View Article
FT: FRC warns on decline of UK audits
According to the results published in the Audit Quality Inspections Annual Report by the FRC, it is a warning "the quality of audits of small UK companies has deteriorated over the past year even as overall standards have improved".  View Article
EFRAG’s feedback statement on 'Novation of Derivatives and Continuation of Hedge Accounting – Proposed amendments to IAS 39 and IFRS 9'
EFRAG published its feedback statement for its final comment letter on the ED, 'Novation of Derivatives and Continuation of Hedge Accounting – Proposed amendments to IAS 39 and IFRS 9'.   View Article
EuropeanIssuers' position relating to shareholders' vote on executive remuneration "say on pay"
EuropeanIssuers published its position paper on the European Company Law and Corporate Governance Action Plan. The EC intends to propose in 2013 an initiative aimed at granting shareholders the right to vote on remuneration policy and/or the remuneration report.  View Article
IASB: Narrow scope amendments to IAS 36 'Impairment of Assets'
The IASB published 'Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)'. The amendments are to be applied retrospectively for annual periods beginning on or after 1 January, 2014. Earlier application is permitted for periods when the entity has already applied IFRS 13.  View Article
EFRAG's draft comment letter on the IASB's draft ED/2013/5, 'Regulatory Deferral Accounts'
EFRAG published its draft comment letter on the IASB's ED/2013/5, 'Regulatory Deferral Accounts'. Comments on the letter are invited by 21 August, 2013.  View Article
IASB: Feedback statement on disclosure forum
The IASB published a Feedback Statement summarising the discussions at a forum hosted by the IASB on financial information disclosure. It calls for behavioural change regarding financial information disclosure.  View Article

Financial Services Policy

European Commission: Moving Europe beyond the crisis - Country-Specific Recommendations 2013
The Commission has adopted recommendations to EU Member States designed to move Europe beyond the crisis and strengthen the foundations for growth. These recommendations provide guidance to governments on how to boost their growth potential, increase competitiveness and create jobs in 2013-2014.   View Article
Commissioner Šemeta: Country-Specific Recommendations – Taxation aspects
The Commission issued Country-Specific Recommendations on taxation to all Member States except for Finland and Denmark. These reflect the fact that there has been a marked increase in the overall tax burden across the EU due to the crisis.  View Article
TBAG Report 2013: Workable solutions for efficient and simplified fiscal compliance procedures related to post-trading within the EU
The latest report from the Tax Barriers Business Advisory Group makes a series of pragmatic recommendations which the Group urges be considered for implementation, either by voluntary adoption by Member States (preferred) or by Directive.  View Article
ESMA/Maijoor: ESAs – Achievement and challenges
Speaking at the public hearing on the ESFS, Maijoor said that although there had been a fundamental change in EU financial supervision, it was time to raise the bar.  View Article
VP Almunia: Presenting the Annual Competition Report for 2012
"Almost six years have passed since the crisis started, and Europe tries to tackle the deep economic, social and political consequences of it. Against this background, the robust enforcement of EU competition law is more urgent than ever."  View Article
Finance Watch: Discussion paper in the context of the PRIPs regulation proposal
Finance Watch published a discussion paper, 'Product Rules for Packaged Retail Products: Why, When, How?' Based on existing product regulations, Finance Watch proposes a set of six principles which could be used either for banning detrimental features or for a warning label on the KID.  View Article
ACCA welcomes recent call from 27 EU leaders to accelerate work in the fight against tax fraud, tax evasion and aggressive tax planning
To accompany the much-needed fiscal consolidation exercise across the EU currently being put in place, ACCA fully endorses the importance of better coordination of taxation matters at national, EU and international level.  View Article
Europe's banks caution Finance Ministers on negative impact of FTT
In a joint letter to the ECOFIN council, the nine associations write: "We hold serious reservations that policymakers are persevering in putting forward a measure that can clearly unbalance and even harm the internal market for financial services and distort competition among operators".  View Article
BBA, CBI and EEF: FTT is a tax on growth
BBA, CBI and EEF have written to President Van Rompuy to call for the current proposals for the FTT to be substantially reconsidered. "We believe the FTT will cut growth, increase unemployment, reduce investment and raise the cost of doing business in Europe", the letter says.  View Article
BBA: A Financial Transaction Tax would damage more than just Europe's banks
We should all be focused on promoting economic growth and creating new jobs, but this tax will do the opposite, comments Anthony Browne on the BBA blog.  View Article
Germany: Financial transaction tax unlikely to come in soon
German government officials are playing down prospects for introducing a financial transaction tax in the near future, after a member of the opposition Social Democrats (SPD) broke ranks and described the project as "rubbish".  View Article
FT: France seeks overhaul of planned EU 'Robin Hood' tax
France is agitating for a full overhaul of Europe's planned financial transaction tax to scale back its reach over derivatives markets, while controversially extending the levy to currency trades.  View Article
Elizabeth Corley: Brussels should drop the tax on financial transactions
The proposed FTT risks unintended consequences for market quality, writes Allianz Global Investors CEO Corley in the FT.  View Article

European Council/Parliament

ECON Committee: A taxing problem - The cost of failing to act on fiscal evasion
From closing banks abetting tax evasion to compiling a blacklist of tax havens, the EP means business when it comes to tackling tax fraud. MEPs have called on Member States to step up their fight against tax evasion.  View Article

International/G20

IMF publishes 'Sovereign debt restructuring - Recent developments and implications for the Fund's legal and policy framework'
This paper reviews the recent application of the Fund's policies and practices on sovereign debt restructuring.  View Article





© Graham Bishop

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