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22 May 2014

This week in "Brussels"

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Articles from 15 May 2014 - 22 May 2014


Member States sign agreement on bank resolution fund
Representatives of 26 EU Member States today signed an intergovernmental agreement onthe transfer and mutualisation of contributions to a single resolution fund that will beestablished as part of Europe's Banking Union.  View Article
Barnier: State of the (Banking) Union
Michel Barnier took stock of developments in the Banking Union and more broadly in financial regulation reform as an illustration of the EU’s added value to economic recovery.  View Article
Bloomberg: EU lawmakers push back against ECB on bank creditor loss rules
European Union lawmakers said the European Central Bank shouldn’t try to influence how losses are imposed on creditors at banks that must resort to public funds in the aftermath of a health check this year.  View Article
FT: Europe banks face clampdown on debt sales
The EBA is concerned about the sale of bank debt that could be bailed-in if the bank’s capital got too low or it faced bankruptcy. Over the past few months, banks have rushed to sell larger amounts of debt that can be converted into equity as they attempt to strengthen their capital buffers.  View Article
EBA 2013 Annual Report
The past year has been characterised by difficult market conditions for the EU banking sector and by a complex process of institutional and regulatory repair. The Annual Report illustrates the progress achieved by the EBA towards a more stable banking and financial sector in the European Union.  View Article
EBA publishes revised list of incorrect ITS validation rules
The EBA issued a revised list of incorrect validation rules found in its Implementing Technical Standards (ITS) on supervisory reporting. The Authority informed that data submitted in accordance with these ITS should not be validated against the previously published set of incorrect rules.  View Article
EBA publishes opinion on measures to address macroprudential or systemic risk
The EBA published an opinion following the notification by the National Bank of Belgium (NBB) of its intention to modify capital requirements in order to address an increase in macroprudential or systemic risk that could have a severe impact on the financial system and the Belgian real economy.   View Article
EPC consults on the evolution of SEPA Credit Transfer and SEPA Direct Debit schemes
The EPC launched a three-month public consultation on possible modifications to the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) Rulebooks. The EPC encourages all Single Euro Payments Area (SEPA) stakeholders to provide feedback by 15 August 2014.   View Article
BCBS/Ingves: Global liquidity regulation, supervision and risk management
Mr Stefan Ingves, Chairman of the BCBS, concluded that regulators don't run banks, and ultimately it is for the banking industry to learn from recent experience to ensure it betters measures, manages and prices liquidity risk in the future.  View Article
Markets Media: Banks face 2016 risk deadline
Global systemically important banks, or G-SIBs, are having a tough time complying with principles laid down by the Basel Committee on Banking Supervision for risk data aggregation and risk reporting.  View Article
Call for papers for EBA policy research workshop
EBA launched a call for research papers in view of its third policy research workshop taking place on 25-26 November 2014 in London on the topic "How to measure the riskiness of banks".  View Article

Securities Repositories call on ESMA to help fix EMIR reporting problems
ESMA needs to help fix the region's still-new derivatives reporting regime, according to two of Europe's six authorised trade repositories (TRs).  View Article
IFR: End-users prep for EMIR clearing
European swaps users are signing up to clearing arrangements well ahead of a regulatory mandate to shift over-the-counter derivatives into central counterparties.  View Article
FT: European securitisation - Five steps to recovery
Issuance of asset-backed securities has been shrinking in Europe. Simon Lewis, chief executive of the Association for Financial Markets in Europe (AFME), comments on the state of the market for European securitisation.  View Article
Bloomberg: ABS supply-demand imbalance not expected to change soon
Demand for asset-backed securities is outstripping supply, and investors might see the market shrink further if the European Central Bank steps in to buy ABS as part of quantitative easing, experts say.   View Article
Reuters: Firms may leave risk unprotected due to 'onerous' derivatives rules
Companies will stop managing certain risks and leave themselves unprotected if derivatives trading rules become too onerous and expensive, said Colin Tyler, head of the Association of Corporate Treasurers (ACT).  View Article
ESMA announces creation of Consultative Working Group for MDRWG
Following the call for expressions of interest published in December 2013, ESMA announced the creation of the Consultative Working group of the Market Data Reporting Working Group.   View Article
ABBL response to EU Commission's FX status consultation
The ABBL thinks the time is well chosen to discuss the status of FX trades as financial instruments (or not), even though this clarification should have come before reporting to Trade Repositories and the application of EMIR began earlier this year.  View Article
FT: BoE urges more transparency in clearing
The Bank of England urged clearing houses and large broker-dealers to publish their derivatives risk calculations, warning that more transparency was necessary to avoid future systemic risks. The bank sounded its warning in a white paper that examined the impact of margin calls on stressed markets.  View Article

Insurance Firms prepare for Solvency II pillar III scrutiny
Pillar III reporting requirements are set to cause upheaval for European insurers as they are forced to reveal much more about their business – not just to stakeholders and regulators but also to each other.   View Article EIOPA chairman says stress tests 'preventative' not a 'repair tool'
As EIOPA unveils stress tests for European insurers, chairman Gabriel Bernardino speaks about comparisons with bank stress tests, implementing Solvency II and adjusting to impending global capital standards.  View Article
InsuranceEurope: Current alternative performance measures are adequate
InsuranceEurope does not support ESMA’s proposed guidelines on alternative performance measures (APMs) as it does not believe that the current requirements for APMs have been proven to be inadequate.  View Article
InsuranceEurope comments on BioIS study on ELD effectiveness
InsuranceEurope supports the European Commission’s efforts to simplify the ELD so as to ensure its effectiveness and application across the EU.   View Article

Asset Management

Reuters: Draft LCR poses new questions on benefits to ABS
ABS backed by assets other than mortgages are set to make it to the liquidity buffer elite if unofficial proposals by EU policymakers become law, but they may still be left lagging behind their luckier counterparts - covered bonds  View Article
FT: Generalist asset managers wade into private debt
Hedge fund managers have been entering the territory of mainstream asset managers in recent years, creating versions of their funds suitable for wider audiences. Now some mainstream managers are wading into one of the fiefdoms of hedge fund companies: private debt.  View Article

Corporate Governance/Accounting

FEE comments on IASB's post-implementation review
FEE issued a comment letter to the IASB on the IASB request for information on the post-implementation review: IFRS 3 Business Combinations.  View Article
IFAC: IAASB notes progress toward the clarified ISAs
The IAASB is pleased to note that the number of jurisdictions using, or committed to using, the clarified ISAs has passed 100—marking an important achievement in global convergence.  View Article
ECIIA: Sustainability management moves up a gear
In the latest issue of the ECIIA’s European Corporate Governance magazine, ECIIA Management Board member Silvio de Girolamo writes that the body’s Sustainability Reporting Guidelines (G4) represent something of a revolution.  View Article

Financial Services Policy

ECB/Cœuré: Completing the single market in capital
Benoît Cœuré argued that de-fragmentation must have an aim, and that aim goes deeper than price convergence. True financial integration implies a single market in capital, where there is efficient allocation and effective diversification.  View Article
ECON/Bowles MEP: Can we kick start growth?
Sharon Bowles MEP, chair of the outgoing ECON committee, spoke on regulation, its consequences on growth and how to fill or address the funding gap.  View Article
Bundesbank/Dombret: Regulation standing still means falling behind
Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, argued that regulation is aiming at a target which is forever receding and therefore progress had to be achieved quickly both from the point of view of banking supervision or in terms of financial stability.  View Article
FN: EU elections could help Left to renew push on regulation
This week’s EP elections may trigger a tougher environment for financial regulation in Europe. Although anti-EU parties are expected to fare well, polls predict stronger gains for parties in the European United Left/Nordic Green Left grouping, which has taken a hard line on banking and markets.  View Article
FCA/Lawton: The new market infrastructure
David Lawton, Director of Markets at FCA, delivered the keynote speech at the Economist Bellwether Conference. Firms need to adapt their business models to meet regulators’ and policy-makers’ expectations and put customers at the heart of their businesses, he said.  View Article
BaFin/König: Consumer protection and regulation
BaFin President Dr Elke König opened the supervisory authority’s annual press conference with a speech in which she explained that, for BaFin, the ideal consumers are responsible consumers who confidently and independently take their own investment decisions.  View Article


Council refuses to allow transparency on TTIP negotiations
With public resistance continuing to grow, the EU Member States decided to refuse publication of the mandate that was given to the European Commission to negotiate the EU-US trade agreement.  View Article US congressional committee blasts SIFI designation process
US insurance regulators and lawmakers are demanding to know more about how the FSB designates non-bank globally systemically important financial institutions amid concerns that FSB decisions are influencing the designation process for US systemically important financial institutions (SIFIs).  View Article

Graham Bishop’s Articles and Speeches

Graham Bishop's Blog: Commission President Debate on Europe-wide TV on 15 May 2014
Watching the great debate last night, the central question in my mind last night was: are we looking at the next President of the European Commission? Clearly, there were only three real candidates in the frame: Juncker, Schulz and Verhofstadt.  View Article
Graham Bishop's Blog: The euro crisis - The European Commission’s first attempt at counting of the cost
The Commission has published an overall assessment of the impact of the massive change in financial markets since the euro crisis struck in 2007/8. But it is close to impossible to provide a definitive answer as many of the 40 regulatory changes have only just been enacted.  View Article
Brussels for Breakfast (99) with Graham Bishop and Hans Hack (FTI Consulting)
The May B4B meeting was again dominated by discussion of the imminent European elections and future priorities of the next Financial Services Commissioner. In banking, the AQR and stress test remain on track.  View Article

© Graham Bishop

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