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01 March 2018

This week in "Brussels"

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  Articles from 22 February 2018 - 01 March 2018

  Banking Union
BIS: The Basel Committee consults on revisions to the Pillar 3 disclosure framework
The Basel Committee on Banking Supervision has issued for consultation Pillar 3 disclosure requirements - updated framework. Pillar 3 of the Basel framework seeks to promote market discipline through regulatory disclosure requirements.   View Article
EBA issues opinion on measures to address macroprudential risk
The European Banking Authority published an Opinion following the notification by the National Bank of Belgium of its intention to modify capital requirements in order to address an increase in macroprudential risk.   View Article
Financial Times: US plan to roll back bank insolvency rules is fake deregulation
Up to now, the most solid evidence of President Donald Trump’s much vaunted deregulatory agenda has been in the appointments he has made to the key regulatory bodies. And the most those individuals have done is signal an intention to interpret elements of Dodd-Frank and other US financial rules less strictly.  View Article
ECB: Cross-border banking in the EU since the crisis: what is driving the great retrenchment?
This paper examines the drivers of the retrenchment in cross-border banking in the EU since the global financial crisis. Authors identify high non-performing loans as an important impediment to cross-border lending after the crisis, highlighting the spillovers from national banking sector conditions across the EU.   View Article
Bank of England: Rethinking financial stability
Authors provide an overview of the state of progress of wide-ranging international regulatory reforms, and assess whether they have achieved their objectives and where gaps remain.   View Article
Financial Times: Confusion over Basel bank capital requirements fails us all
It is 11 years after the start of the financial crisis and a decade since G20 leaders in Washington tasked Basel, as the global regulator, with working out how much capital banks need. All these years later, it is simply not acceptable that some banks see that the devil remains lurking anywhere.  View Article
BIS: Andreas Dombret: Now or later? Completing the European Banking Union
Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, spoke about the European banking union as a subject and the ongoing question: Should we complete it now or later?  View Article
ECB: Financial statements of the ECB for 2017
ECB profit increased by €0.1 billion to €1.3 billion in 2017 (2016: €1.2 billion) and is distributed in full to national central banks. Net interest income on securities held for monetary policy purposes: €1.1 billion (2016: €1.0 billion). ECB’s Balance Sheet grew to €414 billion (2016: €349 billion).  View Article
BIS: Supervision in a post-Basel III world
The BIS General Manager Agustín Carstens outlined three key challenges in the conduct of effective supervision.  View Article
ECB determined ABLV Bank was failing or likely to fail
The European Central Bank determined that ABLV Bank was failing or likely to fail in accordance with the Single Resolution Mechanism Regulation. The ECB also determined ABLV Bank Luxembourg, a subsidiary of the Latvian bank, failing or likely to fail.  View Article
The Telegraph: Open Banking to contribute £1bn to UK economy, says report
A digital revolution in banking services could contribute more than £1bn annually to the UK economy, research has claimed.   View Article
ECB: Innovation and digitalisation in payment services
Speech by Yves Mersch, Member of the Executive Board of the ECB, at the Second Annual Conference on “Fintech and Digital Innovation: Regulation at the European level and beyond”, in which he speaks about challenges in payments industry – those driven by digitalisation and the opportunities  View Article
ECB: Reaping the benefits of payment services in a new regulatory environment
Speech by Yves Mersch, Member of the Executive Board of the ECB, at the European Banking Federation’s Executive Committee, regarding new legislative framework – RTS – which will support innovation and competition in retail payments.  View Article
Remarks by vice-president Dombrovskis at the roundtable on cryptocurrencies
Commission Vice-President Dombrovskis discussed cryptocurrencies with key authorities, industry representatives and experts. The aim was first and foremost to feed into the upcoming Action Plan on FinTech, and the EU's position for a possible discussion at G20 level.   View Article
UK Parliament opens inquiry on the role of digital currencies
The UK Treasury Select Committee has commenced an inquiry on the role of digital currencies in the UK, including the opportunities and risks that digital currencies may bring to consumers, businesses, and the Government.  View Article
FCA: New credit card rules introduced by the FCA
The Financial Conduct Authority (FCA) has published its final policy statement on new rules for the credit card market. The FCA estimates the changes will save consumers between £310 million and £1.3 billion a year in lower interest charges.  View Article
  Capital Markets Union
PCS to provide analysis for market participants in first step to the market’s transition to the new STS Regime
Following the passage of the STS Regulation, many issuers have indicated their intention is to issue STS securitisations from 1st January 2019 and, in the case of some, to issue in 2018 securitisations that are capable of being grandfathered under the STS Regulation.  View Article
PCS responds to a disappointing Commission consultation on STS and LCR
PCS has filed a response to the European Commission’s consultation on possible changes to the Liquidity Coverage Ratio regime. The heart of the Commission’s proposal is the replacement of the current Level 2 securitisation assets with STS securitisations.  View Article
Verena Ross, ESMA’s Executive Director, speaks at ECON scrutiny on Short-Selling Regulation
The Executive Director of the European Securities and Markets Authority, Verena Ross, appeared before the European Parliament’s Economic and Monetary Affairs Committee’s meeting and focused on short-selling.  View Article
ECON: Evaluation of certain elements of the Short Selling Regulation
This briefing has been drawn up to support ECON’s work on the scrutiny of delegated acts, in particular as regards the discussion of 22 February 2018 on the evaluation of certain elements of the Short Selling Regulation No 236/2012.  View Article
ICAS: Four fundamentals of MiFID II
Matthew O'Keeffe outlines four key features of MiFID II that came into force in January 2018 and could well be the biggest change in the capital markets since Big Bang in 1986.  View Article
Financial Times: Brokers and managers grapple with MiFID ‘inducement’ rule
Regulations restrict research disclosure to those who pay for it.  View Article
Financial Times: MiFID II and the return of the ‘star’ analysts
Sweeping changes to the way investors pay for research have brought predictions that UK analyst numbers will halve, while many European asset managers have already cut their research budgets.  View Article
Financial Times: Fidelity International to absorb research costs in volte-face
Fidelity International has backtracked on its decision to pass on the cost of investment research under MiFID II to clients after coming under pressure to pay the charge from its own pocket.  View Article
VOX: The feasibility of sovereign bond-backed securities for the euro area
The column highlights how a market for sovereign bond-backed securities could help to enhance financial stability by providing automatic stabilisation.   View Article
ICMA responds to the European Commission’s public consultation on building a proportionate regulatory environment to support SME listing
ICMA has responded to the European Commission’s consultation 'Public consultation on building a proportionate regulatory environment to support SME listing.  View Article
EIOPA recommends further simplifications to the calculation of insurers’ capital requirements
The European Insurance and Occupational Pensions Authority submitted its second and final set of Advice to the European Commission. Previously, EIOPA submitted a first set of Advice to the European Commission in October 2017.   View Article
EFRAG issues IFRS 17 background briefing paper on level of aggregation
EFRAG issues a background briefing paper on the level of aggregation requirements of IFRS 17 Insurance Contracts.   View Article
IAIS Releases 2017 Global Insurance Market Report
The report shows that throughout 2017, the (re)insurance sector remained stable with clear signs of growth, as evidenced by high capital levels, positive profitability, and a persistent inflow of additional reinsurance capital.  View Article
Insurance Europe: Response provided to EIOPA call for input on reporting and disclosure ITS
Insurance Europe has responded to the European Insurance and Occupational Pensions Authority’s call for input on the inclusion of new data validations and corrections to the reporting/disclosure Implementing Technical Standard and harmonisation of the European XBRL Filing Rules.  View Article
Bank of England: Responses to CP18/17 Occasional Consultation Paper - Chapters 7 and 8
This PRA policy statement (PS) provides final policy as part of changes to the PRA Rulebook as outlined in Chapter 7 of Occasional Consultation Paper (CP) 18/17. These changes relate to the MiFID II, Insurance Distribution Directive (IDD) forms, and European Union Benchmarks Regulation (BMR).   View Article
  Asset Management
EFAMA: An exceptional year for the European fund industry, with net assets of UCITS and AIF surpassing the EUR 15 trillion mark
The European Fund and Asset Management Association has published its latest Investment Funds Industry Fact Sheet, which provides net sales of UCITS and non-UCITS for December 2017 and the entire year of 2017, as well as net assets data at end 2017.  View Article
AIMA responds to European Commission fitness check on supervisory reporting
On 27 February 2018, AIMA responded to the European Commission’s Consultation Document ‘Fitness Check on Supervisory Reporting.’ AIMA submitted a high-level response, raising three key areas of concern on behalf of members, for the Commission to consider as part of the Fitness Check.  View Article
Investment & Pensions Europe: ECB adopts ‘streamlined’ pension fund data reporting regulation
The European Central Bank has “streamlined” its proposed regulation on statistical reporting requirements for pension funds in response to feedback.  View Article
Bank of England: Growing pension deficits and the expenditure decisions of UK companies
Authors investigate the effects of deficits and deficit recovery plans on UK companies’ dividends, investment, wages and cash holdings. Identification is based on the close relationship between low long-term interest rates and pension deficits; and the external regulation of pension schemes by The Pensions Regulator  View Article
Financial Times: Blockchain ‘could save asset managers $2.7bn a year’
Blockchain could save asset managers $2.7bn a year if the investment industry shunned the laborious manual practices involved in buying and selling funds in favour of using online ledger technology, according to research published.  View Article
AIMA: HLEG on Sustainable Finance’s recommendations for asset managers
The High Level Expert Group on sustainable finance has issued its final report setting out a broad set of ESG-related recommendations to the Commission in relation to many financial services stakeholders, including, but not limited to, asset managers and institutional investors.  View Article
Investment & Pensions Europe: ‘Green’ asset classification system gets go-ahead from EU finance ministers
EU finance ministers have agreed that a system that classifies what assets are “green” is the basis for the further action on the bloc’s sustainable finance strategy, according to European Commission vice-president Valdis Dombrovskis.  View Article
  Corporate Governance/Accounting
Accountancy Europe response to the Commission consultation on building a proportionate regulatory environment to support SME listing
Accountancy Europe, the ECG and the EGIAN responded collectively to European Commission’s consultation on building a proportionate regulatory environment to support SME listing.  View Article
CFA Institute: Paper on the revenue recognition requirements
Authors examine the top 10 questions investors should consider as they review year-end 2017 results and consider first quarter 2018 reporting as it relates to the adoption of the new accounting standard.  View Article
PLSA: Workers, suppliers and pension funds must be given real voice in reformed corporate governance regime says PLSA
The Pensions and Lifetime Savings Association (PLSA) called for workers, pension funds and other stakeholders to be given real powers as part of the UK’s new corporate governance regime.  View Article
ACCA: Appropriate risk management is crucial for effective strategic leadership
Organisations cannot exploit strategic opportunities nor can they protect themselves from potential losses or failures, without a clear steer from the top on appropriate risk taking, says ACCA.  View Article
  Financial Services Policy
Steven Maijoor speech at the Second Annual Fintech And Digital Innovation Conference
ESMA's Maijoor addressed three key areas of FinTech: the structural features of FinTech, monitoring FinTech by looking at economic function and challenges and opportunities for regulators.   View Article
ESAs review: Insurance Europe supports EIOPA as strong stand-alone authority
Insurance Europe has published a position paper on the European Commission’s position regarding the review of the ESAs. The paper welcomes the Commission’s recognition of the need to maintain the EIOPA as a stand-alone authority responsible for both prudential and conduct of business supervision.  View Article
Main results - General Affairs Council, 27/02/2018
The Council discussed the Presidency's priorities, preparations for the March European Council and the rule of law in Poland.  View Article
POLITICO: Blueprint for a democratic renewal of the eurozone
Strengthening the monetary union requires a significant leap in governance, write a group of MEPs, economists and former EU officers.  View Article
Deutsche Bundesbank: January results of the Bank Lending Survey in Germany
German banks adjusted their lending policies in the fourth quarter of 2017, chiefly with regard to credit terms and conditions, according to the Eurosystem’s latest Bank Lending Survey (BLS) among banks domiciled in Germany.  View Article
Annual inflation down to 1.3% in the euro area
Euro area annual inflation rate was 1.3% in January 2018, down from 1.4% in December 2017. In January 2017, the rate was 1.8%. European Union annual inflation was 1.6% in January 2018, down from 1.7% in December 2017. A year earlier the rate was 1.7%.  View Article

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