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07 September 2017

This week in "Brussels"

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  Articles from 27 July 2017 - 07 September 2017

  Banking Union
EBA updates list of public sector entities for the calculation of capital requirements
The European Banking Authority (EBA) published an updated list of public sector entities (PSEs) that may be treated as regional governments, local authorities or central governments for the calculation of capital requirements, in accordance with the EU Capital Requirements Regulation (CRR).   View Article
IMF: Back to the Future: The Nature of Regulatory Capital Requirements
This paper compares the current regulatory capital requirements under the Dodd-Frank Act (DFA) and the 10-percent leverage ratio, as proposed by the US Treasury and the US House of Representatives' Financial CHOICE Act (FCA).  View Article
BIS: FSI Insights on policy implementation series launched; first papers focus on proportionality, cyber-risk
The Financial Stability Institute (FSI) launched a new publication series, FSI Insights on policy implementation, to contribute to international discussions on a range of policy issues and implementation challenges faced by financial sector authorities.  View Article
IMF: More action needed on European bank profitability
European banking has made considerable progress in the past few years: Banks have built up capital, regulation is stronger and supervision has been enhanced. But profitability remains weak, posing risks for financial stability, the latest Global Financial Stability Report states.  View Article
EBA reports show that banks funding plans paint an optimistic outlook for growth whilst NPLs remain a drag on EU banks new lending
The reports aim to provide important information for EU supervisors to assess the sustainability of banks' main sources of funding. The results of the assessment show that banks plan to increase their lending and to expand deposits as well as market based funding.  View Article
EBA publishes final technical standards on MREL reporting by resolution authorities
The EBA published its final draft implementing technical standards specifying templates and procedures resolution authorities should follow when informing the EBA of the minimum requirement for own funds and eligible liabilities (MREL) that have been set for institutions under their jurisdiction.  View Article
Deutsche Bundesbank: Failing or likely to fail? Putting the European banking union to the test
Deutsche Bundesbank's Andreas Dombret addresses the question of whether the European banking union actually works by examining four recent examples of institutions running into difficulties in the European banking sector.  View Article
ECB: Payment systems: liquidity saving mechanisms in a distributed ledger environment
The ECB and the BOJ, in their role as operators of important market infrastructure services, decided to conduct in-depth experiments to determine whether specific existing functionalities of their respective payment systems could run in a DLT environment.   View Article
BIS: Enhanced statistics on cashless payments and financial market infrastructures
The BIS is updating and enhancing its statistics on cashless payments and financial market infrastructures in the 24 jurisdictions which are members of the Committee on Payments and Market Infrastructure (CPMI), the so-called Red Book statistics.  View Article
European Payment Council: Blockchain: Applications in payments
In recent years, blockchain technology has significantly gained popularity because it has the potential to process financial transactions in ‘real time’ without compromising security.  View Article
EBA consults on fraud reporting requirements under PSD2
The EBA launched a public consultation on its draft Guidelines on reporting requirements on statistical data on fraud under the revised Payment Services Directive. The Guidelines are aimed at contributing to the objective of PSD2 to increase the security of retail payments in the EU.  View Article
BIS: Memorandum of Understanding signed by the Basel Committee on Banking Supervision and the IFRS Foundation
The Basel Committee on Banking Supervision (BCBS) and the IFRS Foundation have announced a new cooperation agreement to foster long-term financial stability, enhance market discipline and further develop sharing of information.   View Article
EBA updates data used for the identification of global systemically important institutions (G-SIIs)
This end-2016 data contributes to the internationally agreed basis on which a smaller subset of banks will be identified as global systemically important institutions (G-SIIs), following the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB) final assessments.   View Article
Consultative document on the implications of fintech for banks and supervisors issued by the Basel Committee
The BCBS released a consultative document on the implications of fintech for the financial sector. The document assesses how technology-driven innovation in financial services, or "fintech", may affect banks and supervisors.  View Article
Financial Times: Regulators get ready to authorise ‘ring-fenced’ UK banks
Regulators at the Bank of England are quietly getting ready to authorise the creation of the three largest new banks to come into existence in the UK.  View Article
Financial Times: Tighter EU curbs urged on winding down banks
Europe’s top official in charge of winding down failed banks has urged the EU to tighten restrictions on when governments can pump money into stricken lenders, in response to recent cases in Italy where senior bondholders were spared losses.  View Article
EBA publishes Final Guidelines on major incident reporting under PSD2
The Guidelines are addressed to all payment services providers and competent authorities in the 28 EU Member States, and contribute to the objective of the PSD2 of minimizing disruption to users, payment service providers and payment systems.   View Article
  Capital Markets Union
European Commission consultation on post-trade in a Capital Market Union: dismantling barriers and strategy for the future
The consultation discusses the main trends and challenges faced by post-trade services providers and their users, and seeks to determine the existence and scale of remaining or new barriers, the risks associated with such barriers and the best ways to address them.  View Article
ISDA: Brexit – CCP location and legal uncertainty
The vast majority of EU clearing currently takes place in London, but there are suggestions that EU regulators might introduce a location policy for euro-denominated swaps to be cleared in the EU.  View Article
ECMI - Developing EU Capital Markets for SMEs: Mission impossible?
The European Commission’s renewed activities to develop market-based financing need to be stepped up in order to develop a credible capital market to finance SMEs in the EU, writes Apostolos Thomadakis.  View Article
EurActiv: The Capital Markets Union can deliver Europe a sustainable future
The European Commission’s mid-term review of the Capital Markets Union Action Plan shows it is serious about sustainable finance, but more remains to be done, write Christian Thimann and Steve Waygood.  View Article
Hedgeweek: Only 6 per cent of asset managers ready for MiFID II best execution standards
Just 6 per cent of asset management firms believe they are currently ready to meet best execution requirements under MiFID II, according to “Re-Engineering Best Execution,” a new survey carried out by Liquidnet.  View Article
Financial Times: MiFID vies with Brexit as City traders’ main problem
The arrival in January of MiFID II, sweeping European legislation that aims to inject greater transparency and reinforce investor protections, is looming uppermost for many trading entities in London.  View Article
  Clients Union
EIOPA: European Supervisory Authorities publish Q&A on the KID for PRIIPs
The European Supervisory Authorities published further guidance on the requirements for Packaged Retail and Insurance-based Investment Products laid down in the European Commission's Delegated Regulation 2017/653.   View Article
ESMA updates its MiFID II guidelines on transaction reporting, order record keeping and clock synchronisation
The update corrects some unintended factual mistakes, typos and inconsistencies in the technical part of the Guidelines.  View Article
Financial Times: UK assures on ‘close’ EU data protection laws after Brexit
Britain is pushing to closely mirror the EU’s data protection laws after Brexit, in a bid to ensure the free flow of data across borders which is vital in underpinning the digital economy.  View Article
POLITICO: UK’s data flows under EU surveillance
The UK’s beefed-up surveillance law — the Investigatory Powers Act, which came into force at the end of last year — seems to violate EU fundamental rights and will cause problems for any eventual arrangement on data flows post Brexit.  View Article
ACCA: Businesses must grip ethics in the digital age
The report Ethics and Trust in a Digital Age, released by ACCA, raises questions about how prepared businesses are to face new ethical challenges such as ransomware attacks; crypto-currency transactions; intellectual property disputes and customer privacy.  View Article
European Commission boosts consumer protection for insurance products
The Commission has laid down rules for an Insurance Product Information Document (IPID), which will have to accompany all non-life insurance policies from 2018. These new rules will allow consumers to have all information necessary to make an informed decision when buying insurance products.   View Article
IAIS: Aggregate report on the self-assessment and peer review of ICPs 13 and 24
This report contains the aggregate findings of the self-assessments as well as the Expert Team’s recommendations and suggestions on steps the IAIS and its partners, as well as IAIS Members, could take to enhance ICP observance and understanding.  View Article
Insurance Europe: Comments provided to IAIS on revisions to ICP 13
Insurance Europe has responded to the International Association of Insurance Supervisors' (IAIS) consultation on revisions to Insurance Core Principle (ICP) 13 regarding reinsurance and other forms of risk transfer.   View Article
Insurance Europe: Response provided to IAIS consultations on ICP 18 and 19
Insurance Europe has responded to the International Association of Insurance Supervisors’ (IAIS) consultations on revisions to Insurance Core Principle (ICP) 18 on intermediaries and ICP 19 on market conduct.  View Article
EIOPA’s Risk Dashboard – first quarter 2017 - shows relative stable risk exposure of the European Union insurance sector
The European Insurance and Occupational Pensions Authority (EIOPA) published its updated Risk Dashboard based on the first-quarter 2017 data. The Risk Dashboard presents EIOPA's quarterly risk assessment of the European Union insurance industry.   View Article
Insurance Europe: Response to consultation on first batch of EIOPA advice on Solvency II review
Insurance Europe has responded to a European Commission consultation on the first batch of advice that it received from the European Insurance and Occupational Pensions Authority on the upcoming review of Solvency II.  View Article
Commercial Risk Europe: BEPS not a threat to captives if used correctly
Spanish and European captive owners should not be overly concerned about the OECD’s Base Erosion and Profit Shifting initiative, as long as their captive is being used correctly as a genuine risk management tool, rather than for fiscal purposes, according to Daniel San Millán.  View Article
Insurance Europe: Response provided to POG and IBIPs consultation
Insurance Europe has responded to a public consultation through the European Commission's Better Regulation portal on the draft delegated acts (DAs) on product oversight and governance (POG) and insurance-based investment products (IBIPs).  View Article
Commercial Risk Europe: UK introduces new rules for insurance-linked securities to boost market
The UK government has published new rules for insurance-linked securities (ILS) that aim to keep the UK at the forefront of the global reinsurance market. The government said the new regulations introduce “a competitive regulatory and tax regime for ILS, which will ensure that UK gets a share of this rapidly growing market”.   View Article
  Asset Management
Investment & Pensions Europe: Commission consults on mediation of investor, public authority disputes
The European Commission has launched a consultation to help it decide whether there is a need for an EU framework for the amicable prevention and resolution of disputes between public authorities and investors.  View Article
Hedgeweek: Why 2017 must be the year of compliance. Part 1: GDPR
There are two major pieces of legislation coming into effect in early 2018, which will affect alternative investment firms in the UK, and firms worldwide who are holding data on European citizens, or trading with firms in the EU.   View Article
Investment & Pensions Europe: Schemes 'unprepared' for incoming EU data laws
Pension trustees feel “out of their depth” on data protection and cybersecurity issues, according to a recent survey.  View Article
Investment & Pensions Europe: German regulator giving ‘high priority’ to new DC plans
Defined contribution schemes, a new second pillar arrangement in Germany, have “high priority” at the country’s financial markets regulator, according to an official at BaFin.  View Article
Investment & Pensions Europe: Dutch cabinet opposes permanent exemption from central clearing
The Dutch government has indicated that it opposes a permanent exemption for pension funds from central clearing of swap contracts, arguing it would undermine general support for reform.  View Article
  Corporate Governance/Accounting
EBF response to the FSB consultation on sound compensation practices
The European Banking Federation has responded to the consultation of the Financial Stability Board on “Supplementary Guidance to the FSB Principles and Standards on Sound Compensation Practices.”  View Article
GPPC: The auditor’s response to the risks of material misstatement posed by estimates of expected credit losses under IFRS 9
The paper is addressed primarily to the audit committees of systemically-important banks, although much of its content will be relevant to other banks and financial institutions, and aims to promote the implementation of accounting for expected credit losses to a high standard.  View Article
IASB: BCBS and IFRS Foundation sign Memorandum of Understanding
The BCBS and the IFRS Foundation have announced a new cooperation agreement to foster long-term financial stability, enhance market discipline and further develop sharing of information.  View Article
IFAC: IPSASB works to improve reporting on financial instruments
The IPSASB has released Exposure Draft (ED) 62, Financial Instruments, for comment. It is based on IFRS 9, Financial Instruments, developed by the IASB.  View Article
IPSASB seeks views on updating accounting approaches for revenue and new approaches for non-exchange expenses
The IPSASB released its Consultation Paper Accounting for Revenue and Non-exchange Expenses and seeks constituent views on potential recognition and measurement approaches for revenue and non-exchange expenses.  View Article
ICAEW: non-comparable disclosure under IFRS is a problem
ICAEW published a new briefing that reports the difficulties met when collecting data on the three topics investigated - pension discount rates, impairment and capitalisation of development costs - in order to study international differences in IFRS practice.  View Article
EFRAG’s final comment letter on the IASB’s ED/2017/2 on improvements to operating segments
EFRAG has published its final comment letter in response to the IASB's ED/2017/2 Improvements to IFRS 8 Operating Segments – Proposed amendments to IFRS 8 and IAS 34.  View Article
EFRAG requests comments on its draft endorsement advice on IFRIC 23 Uncertainty over Income Tax Treatments
EFRAG is consulting on its assessment of IFRIC Interpretation 23 Uncertainty over Income Tax Treatments against the endorsement criteria in the IAS Regulation, including the technical criteria and whether IFRIC 23 is conducive to the European public good.  View Article
Accountancy Europe response to PCAOB proposed amendments to auditing standards for auditor’s use of the work of specialists
Accountancy Europe responded to the PCAOB consultation on proposed amendments to auditing standards for auditor’s use of the work of specialists.  View Article
Accountancy Europe response to PCAOB proposed auditing standard on auditing accounting estimates
Accountancy Europe responded to the PCAOB consultation on proposed auditing standard on Auditing Accounting Estimates, including Fair Value Measurements and amendments to other PCAOB auditing standards.  View Article
IFAC: IAASB welcomes PCAOB's new enhanced auditor reporting standard
The IAASB welcomes the adoption by the US PCAOB of a new auditing standard to enhance auditor’s reports by providing additional, relevant information to users, including critical audit matters.  View Article
Accountancy Europe comments on the IAASB’s proposal to modernise the financial estimate audits in support of audit quality
The letter supports the IAASB΄s decision to explore this topic and affirms that the revision of ISA 540 is essential to ensure the standard remains fit for purpose in light of today’s evolving and complex business environment.  View Article
ECB: AnaCredit validation checks
This document supplements the AnaCredit Reporting Manual by explaining the main set of validation checks that will be performed in order to ensure that the data quality required for transmission to AnaCredit is sufficient.   View Article
IFAC: New guidance helps organizations navigate the complicated terrain of accountancy regulation
In light of regulatory evolution in recent years and the ongoing need for professional accountancy organizations to adapt to, and actively influence, their environment, the IFAC released new guidance to support professional accountancy organizations in these efforts.  View Article
Corporate governance reform: UK government response (White paper)
This document summarises the responses received to the UK Government's consultation on its Green Paper on the UK’s corporate governance framework and sets out the proposals which the government now intends to take forward.  View Article
FRC: Corporate Governance will evolve to meet the changing needs of the UK
The FRC welcomes the Government’s response to its green paper on corporate governance reform and will use the feedback to help inform the development of its consultation on a fundamental review of the UK Corporate Governance Code later this year.  View Article
PLSA comments on corporate governance reforms
As the Government announces corporate governance reforms, research from the Pensions and Lifetime Savings Association (PLSA) highlights that 84% of pension funds are concerned about the pay gap in listed companies with 86% believing that executive pay in listed companies is too high.  View Article
FRC consults on non-financial reporting guidance
The FRC’s consultation on amendments to its Guidance on the Strategic Report encourages businesses to consider the interests of stakeholders.   View Article
FRC removes Tier 3 categorisation for Stewardship Code signatories
Last year the FRC categorised signatories to the Stewardship Code into tiers based on the quality of their Code statements. Over the past 18 months, the majority of signatories significantly improved their statements, but some remained in Tier 3, meaning their reporting required further improvement.  View Article
  Market Abuse
ESMA updates Q&A on MAR
ESMA updated its Questions & Answer document regarding the implementation of the Market Abuse Regulation.  View Article
  Anti-Money Laundering
ACCA responds to HM Treasury consultation on anti-money laundering
ACCA has responded to HM Treasury’s current review of anti-money laundering (AML) supervision, which has called for a new Office for Professional Body AML Supervision (OPBAS) to oversee the AML supervision exercised by the professional bodies in the legal and accountancy sectors.  View Article
ALFI response to the ESAs’ consultation on a draft joint RTS on measures to take to mitigate AML/CFT risks
ALFI responded to the ESAs’ consultation on a draft joint RTS on measures to take to mitigate AML/CFT risks where a third country’s law does not permit the application of group-wide policies and procedures.  View Article
  Market Structure
EFAMA supports conclusions of the European Post Trade Forum (EPTF) report
EFAMA welcomes the launch by the European Commission of a public consultation to seek views on remaining barriers in post-trade markets in the context of the Capital Market Union.   View Article
Responses received to ESMA's consultation on CCPs management of conflict of interest
ESMA published the responses received to its Consultation on guidelines on CCPs conflict of interest management.  View Article
ESMA publishes the responses to its Consultation on CRA Endorsement Guidelines
ESMA published the responses received to its Consultation on Update of the guidelines on the application of the endorsement regime under Article 4(3) of the CRA Regulation.  View Article
ESMA publishes the responses to its Consultation on trading obligation for derivatives under MiFIR
ESMAs published the responses received to its Consultation on trading obligation for derivatives under MiFIR.  View Article
ESMA issues guidelines on portability of data between trade repositories
ESMA issued final guidelines on data transfer between Trade Repositories authorised under the European Market Infrastructure Regulation.  View Article
ISDA publishes equity derivatives T+2 settlement cycle protocol
The International Swaps and Derivatives Association has announced the launch of the ISDA 2017 OTC Equity Derivatives T+2 Settlement Cycle Protocol.  View Article
  Financial Services Policy
EBF response to EBA draft recommendations on outsourcing to cloud service providers
EBF supports the additional guidance to the existing CEBS Guidelines. EBF supports the efforts made by the EBA to provide additional guidance to the existing guidelines of the CEBS with the aim of fostering supervisory convergence regarding the current expectations and processes for the use of outsourced cloud computing in financial services (FS).  View Article
BIS: The FinTech Opportunity
This paper assesses the potential impact of FinTech on the finance industry. The author argues that the current regulatory approach is subject to significant political economy and coordination costs, and therefore unlikely to deliver much structural change.   View Article
EBA publishes a Discussion Paper on its approach to FinTech
FinTech has the potential to transform the provision of financial services. For this reason, public authorities in the EU and beyond have started to investigate the impact FinTech is having on the financial system and its regulation and supervision.  View Article
BBC: US regulator mulls banking rule reform
The Office of the Comptroller of the Currency said it was seeking views on revising the Volcker Rule, which stops banks trading with their own money.  View Article
IFAC: IAESB extends deadline for ED on Continuing Professional Development
The deadline to comment on the IAESB proposed revision of International Education Standard (IES) 7, Continuing Professional Development, has been extended to September 19, 2017.  View Article
  Grahams Articles, Comments & Speeches
May to climb down - rather than crash over - the Brexit cliffs by end-September? Probably, a historic crash over!
It looks as though Prime Minister May’s `major statement’ apparently planned for later in September may have to be a massive climb down - rather than crash over - the cliffs. Sadly, the omens are not good.  View Article
Financial Times: Macron backs proposal for cohort of pan-EU MEPs
France is backing pan-EU lists of candidates for seats in the European Parliament as President Emmanuel Macron seeks to counter the rise of populist parties tapping into growing public hostility towards the bloc.  View Article
Bertelsmann Stiftung: Germans are more optimistic about their future than their European neighbours
The refugee crisis, Brexit, growing populism – recently there has been a spate of events and trends that have completely transformed the political landscape in Europe. But in Germany, these changes predominantly seem to be fostering the need for stability, as shown in the new "eupinions" study.   View Article
Bloomberg: Poland to EU: No second-class members (and mind your own business)
The European Union may ultimately fall apart if some of its members pursue deeper integration faster than others, Polish President Andrzej Duda said.  View Article
Project Syndicate: How to Renew the European Project
As long as member states have sovereignty over fiscal and economic policymaking, France and Germany should focus their efforts on making the eurozone itself more resilient, writes Christoph M. Schmidt.  View Article
Carnegie Europe: Germany and the Future of the Eurozone
Together with France, Germany’s next finance minister must push to further integrate the eurozone, writes the president of the Center for Progressive Policy Research Yannos Papantoniou.  View Article
EurActiv: Madrid will push for a eurozone budget and eurobonds
The Spanish government is expected to put pressure on France, Germany and Italy to move to a deeper economic and monetary union by establishing a eurozone budget as well as a finance minister.  View Article
Financial Times: Lessons for the eurozone from Greece’s painful crisis years
Greece is finally growing again. But it has been arguably the eurozone’s greatest failure. Catapulted into a debt crisis with a 15 per cent government spending deficit in 2009, the country suffered eight years of economic contraction. Can Europe learn from the country’s painful experience?   View Article
Volume of retail trade down by 0.3% in euro area
In July 2017 compared with June 2017, the seasonally adjusted volume of retail trade fell by 0.3% in the euro area (EA19) and by 0.2% in the EU28, according to estimates from Eurostat. In June, the retail trade volume increased by 0.6% in the euro area and by 0.5% in the EU28.  View Article
GDP up by 0.6% in both the euro area and the EU28
Seasonally adjusted GDP rose by 0.6% in both the euro area (EA19) and the EU28 during the second quarter of 2017, compared with the previous quarter, according to a flash estimate published by Eurostat.  View Article
Volume of retail trade up by 0.5% in euro area
In June 2017 compared with May 2017, the seasonally adjusted volume of retail trade rose by 0.5% in the euro area (EA19) and by 0.4% in the EU28, according to estimates from Eurostat.  View Article
Euro area unemployment at 9.1%
The euro area (EA19) seasonally-adjusted unemployment rate was 9.1% in June 2017, down from 9.2% in May 2017 and down from 10.1% in June 2016.   View Article
July 2017: Economic Sentiment broadly unchanged in the euro area and up in the EU
Following June's sharp increases which had lifted the indicators to their highest levels in some ten years, the euro area Economic Sentiment Indicator (ESI) moved broadly sideways (+0.1 points to 111.2) in July, while its EU counterpart continued increasing (+0.8 points to 112.1).   View Article

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