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29 May 2014

This week in "Brussels"



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Articles from 22 May 2014 - 29 May 2014

Banking

Financial Stability Review shows progress in strengthening banks and sovereigns
European Central Bank: Banking system stress has eased further as banking union preparations have gathered pace and banks have strengthened balance sheets. Growing search for yield has benefited euro area banks and sovereigns, but could also unearth imbalances should risks be reassessed.  View Article
ECB/Lautenschläger: Making the comprehensive assessment a success
Sabine Lautenschläger, Member of the Executive Board of the European Central Bank, spoke on how we can make the comprehensive assessment a success and addressed some pertinent questions on the measures to deal with capital shortfalls.  View Article
EBA publishes list of Common Equity Tier 1 capital instruments
The EBA published a list of capital instruments across the EU that NSAs have classified as Common Equity Tier 1 (CET1). This list is based on the information received from the 28 NSAs across the EU and includes all the CET1 instruments issued by institutions and evaluated as compliant by the NSAs.   View Article
ECB launches public consultation on draft ECB regulation on supervisory fees
The ECB will take over as supervisor of euro area banks in November 2014 as part of the SSM. The SSM will directly supervise up to 130 institutions and work with national competent authorities to oversee smaller banks. (Includes comments by EBF and Bankenverband.)  View Article
EBA consults on technical standards on supervisory benchmarking
The European Banking Authority launched a consultation on draft ITS and RTS aimed at specifying the EU framework for the conduct of annual supervisory benchmarking of internal approaches for calculating own funds requirements for credit and market RWAs. The consultation runs until 19 August 2014.   View Article
ECB and EBA update classification system for reporting frameworks
The ECB and EBA published a third version of the classification system that aims at providing a better understanding of the links between the two different reporting frameworks of the ECB and the EBA, while creating synergies between datasets that were originally designed for different purposes.  View Article
EBA/EIOPA/ESMA: Joint Committee to hold Consumer Protection Day 2014
The Joint Committee of ESAs is organising the second Joint ESAs Consumer Protection Day on 4 June 2014 in London. The event will bring together consumers, regulators and industry participants to discuss consumer protection-related issues in the financial services area in the European Union.   View Article
BIS/Linde: The financial system ahead of the Banking Union
Mr Luis M Linde, Governor of the Bank of Spain, argued that the Spanish financial system had undergone intense restructuring and recapitalisation, as well as a significant consolidation process and he was thus confident that Spanish banks were prepared for the AQR and stress tests.  View Article

Securities

ESMA consults on MiFID reforms
ESMA launched the consultation process for the implementation of the revised Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). The closing date for responses to both papers is Friday 1 August 2014.  View Article
IMA responses to ESMA’s MiFID II consultation
The IMA published its responses to ESMA’s MiFID II consultation paper in three areas: the detailed rules on the disclosure of costs and charges to underpin MiFID II; market structure; and the use of dealing commissions in payment for research.  View Article
Reuters: EU watchdog to kick off revamp of securities markets
The second round of a battle between banks and bourses kicks off this week when EU regulators publish proposals for the biggest shake-up of the bloc's securities market in history to increase transparency and investor protection.  View Article
ESMA publishes 8th updated Q&A on EMIR implementation
The Q&As are aimed at national competent authorities to ensure convergent supervisory activities. It should also help investors and other market participants by providing clarity on the requirements under EMIR.  View Article
IFR: Pension funds begin clearing swaps
European pension funds have begun clearing over-the-counter derivatives despite being exempt from the regulatory mandate for years to come.  View Article
Reuters: Rating agencies stand by sovereign caps
CRAs sought to shield their ABS rating logic from criticism that their link to sovereign rankings is hampering the resurgence of the sector and neglecting market performance.   View Article
BIS: Implementation monitoring of PFMIs - update to level 1 assessment report
The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) continue to closely monitor the implementation of the Principles for financial market infrastructures (PFMIs).  View Article
AFME/ALFI: Reactions to ESMA's DTS for regulation on improving EU securities settlement
AFME recommends that further discussions should take place to consider what processes could be put in place to enforce the CSDR buy-in rules in ‘non-CCP’ scenarios. ALFI sees the benefits of T+2 settlement for exchange traded financial instruments held by investment fund portfolios.  View Article
Risk.net: EU regulators concerned by CFTC's foreign CCP rules
European regulators are warning that planned US rules for foreign clearing houses that would bar them from accepting US clients could prevent US central counterparties (CCPs) being approved under Europe's own rules.  View Article
Risk.net: Banks breach EU and US reporting rules to avoid privacy clash
Two dealers told media they were breaching European and US derivatives reporting rules in order to avoid a clash with some countries' privacy laws, which make it illegal to reveal customer identities.  View Article
Risk.net: Europe little to learn from US clearing roll-out
European authorities are engaging with central counterparties and clearing members to avoid problems associated with the roll-out of clearing in the US, says Kate Wormald from Oesa Partners.  View Article
FSMA: Ban on the marketing of certain financial products
The marketing of certain financial products to retail clients in Belgium will be banned starting on 1 July 2014. The Regulation to this effect was approved by a Royal Decree published in the Belgian Official Gazette.  View Article

Insurance

BoE/Carney: Regulating the insurance industry to support the real economy
Article by Mark Carney, Governor of the Bank of England, supporting insurance industry regulation in order to support the real economy.  View Article
Risk.net: European supervisory culture needs to evolve
European regulators need to develop a more rigorous supervisory culture to effectively monitor firms under the Solvency II regime, said panellists at Insurance Risk Nordics in Stockholm.  View Article
InsuranceEurope's comments on the OECD draft Commentaries on the CRS
With this paper, InsuranceEurope wishes to provide additional comments on the OECD draft Commentaries on the Common Reporting Standard (CRS). This submission should be read in conjunction with their previous submission on the draft Commentaries of 21 March 2014.  View Article

Asset Management

PensionsEurope's statement on the proposal for IORP II
PensionsEurope welcomed the Commission’s commitment to high standards of pension scheme governance and communications, but cautioned that some of the proposals risk creating unnecessary extra burdens for schemes.  View Article
Risk.net: BoE and Citadel clash over SIFI status for funds
Asset managers face growing liquidity risks – the result of reforms that have made banks less able to play their traditional market-making role – and the financial system is not well equipped to manage them, according to Bank of England financial stability expert.  View Article
Compliance Complete: Firms still awaiting FCA guidance on 'wholesale consumers'
The Financial Conduct Authority has yet to produce the feedback statement and final guidance that it promised in its July 2013 approach document, which includes its controversial concept of 'wholesale consumers'.   View Article
Hedgeweek: Clearstream issues report to help depositary banks comply with AIFMD
Clearstream has issued the Domestic Markets Monitoring Report to support depositary banks in managing their new obligations as stipulated by the Alternative Investment Fund Manager Directive (AIFMD).  View Article
IPE: Rethink on 'asset ceiling' requirements could have impact on UK schemes
The International Financial Reporting Standards Interpretations Committee (IFRS IC) has instructed its staff to look again at the drafting of a proposal to amend its guidance on the so-called asset ceiling requirement.  View Article
Pensions & Investments: SEC Chairwoman discusses money market reform
New rules imposing safeguards on money market funds will be out "in the very near term", SEC Chairwoman Mary Jo White said at an Investment Company Institute conference in Washington.  View Article
FT: Asset managers seek to deflect new rules
The asset management industry is playing US regulators against their international counterparts and stirring national sentiment on Capitol Hill in an attempt to head off new regulation of its biggest firms.  View Article

Corporate Governance/Accounting

Deloitte comments on IFAC supplementary financial measures proposals calls for global coordination
Deloitte has responded to the PAIB of the IFAC on its ED for an IGPG on 'Developing and Reporting Supplementary Financial Measures—Definition, Principles, and Disclosures'. Deloitte supports the objective of developing guidelines on supplementary financial measures.  View Article
IASB and FASB: New converged standard on revenue recognition
The IASB and the FASB jointly issued a converged Standard on the recognition of revenue from contracts with customers. The Standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally.   View Article
EBF comments EFRAG’s Research Paper: The business model in financial statements
EBF published its comments on EFRAG’s Research Paper: The role of the business model in financial statements. Using a business model is an effective way for entities to present financial information to investors in a way that is appropriate to that entity’s operating environment.   View Article

Financial Services Policy

ECB/Draghi: Monetary policy in a prolonged period of low inflation
In this seminal speech, Mario Draghi discussed the factors behind low inflation in the euro area, and how they interact, percolate through the real economy and may affect medium-term price stability.  View Article
ECB/Praet: Monetary policy and balance sheet adjustment
Peter Praet, Member of the Executive Board of the ECB, laid out his thoughts on how the process of balance sheet correction that is taking place in the euro area could influence the shaping of monetary policy in the current conditions.  View Article
BoE/Carney: Inclusive capitalism - creating a sense of the systemic
Mark Carney, Governor of the Bank of England, spoke on the problem of growing exclusivity of capitalism, arguing that the combination of unbridled faith in financial markets prior to the crisis and the recent demonstrations of corruption in some of these markets has eroded social capital.  View Article
Bundesbank/Weidmann: The macroeconomic importance of capital markets
Jens Weidmann, President of the Deutsche Bundesbank, argued that balanced rules to protect investors and measures to secure financial stability are necessary and in the interests of all capital market participants.  View Article

International/G20

TTIP: 5th round of negotiations
For the 5th round of TTIP discussions between EU and US representatives, a detailed appraisal of the Commission’s impact assessment, written at the request of the EP’s Committee on International Trade, has been published.  View Article

Graham Bishop’s Articles and Speeches

The EP election: sceptics to be marginalised in four weeks?
After all the media hype about the rise of the Eurosceptics, the central and practical reality is that the 'big four' political families who are willing to share more sovereignty when necessary - 'more Europe' in the conventional shorthand – still control 70 % of the seats in the new Parliament.  View Article





© Graham Bishop


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