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28 June 2018

This week in "Brussels"

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  Articles from 21 June 2018 - 28 June 2018

  Banking Union
EBA publishes opinion to hasten the preparations of financial institutions for Brexit
In this Opinion, the EBA asks Competent Authorities to ensure that financial institutions take practical steps now to prepare for the possibility of a withdrawal of the UK from the EU with no ratified Withdrawal Agreement in place, and no transition period.   View Article
Financial Times: BoE hits out at Brussels over post-Brexit plans
The Bank of England has fired shots at Brussels and European bank regulators in an increasingly acrimonious dispute over preparations by the financial sector for Brexit.  View Article
Financial Times: Hammond and Carney close ranks over financial services post-Brexit
Chancellor of the Exchequer and Bank of England's Governor moved towards common position on mutual recognition at their annual address at Mansion House.  View Article
Remarks by Vice-President Dombrovskis at the ECOFIN press conference
Mr Dombrovskis outlined some major achievements that have been reached, including a common approach on the Banking Package, a common approach on Pan-European Personal Pensions, and on Cross-border Distribution of Funds.  View Article
Seize the day to secure sustained growth, BIS says
Policymakers can maintain the current economic upswing beyond the short term by tackling structural reforms, rebuilding monetary and fiscal policy space to react to future threats and encouraging prompt implementation of regulatory reforms, the BIS writes in its Annual Economic Report.  View Article
Basel Committee issues progress report on banks' implementation of the Principles for effective risk data aggregation and reporting
The BCBS published its latest progress report on banks' implementation of the Principles for effective risk data aggregation and reporting. The Principles, issued in January 2013, aim to strengthen banks' risk data aggregation and risk reporting with a view to improving their risk management, decision-making processes and resolvability.  View Article
Financial Times: BIS warns of ‘disciplining force’ of financial markets
The “disciplining force” of financial markets will leave debt-laden governments with limited room to boost growth as central banks ditch their crisis-era stimulus, the head of the Bank for International Settlements has warned.   View Article
European Parliament: draft RTS on economic downturn in IRB modelling, Level 2 in CRD V/CRR II proposals, and CRD IV/CRR update 2018
This briefing has been prepared to support ECON’s work on scrutiny of delegated acts, in particular the discussion of 18 June 2018 on forthcoming draft measures (DAs), and in particular RTS under the CRD IV and the CRR.   View Article
EBA updates its guides on supervisory data
The EBA published two updated versions of methodological guide on how to compile risk indicators and detailed risk analysis tools and the EBA guidance note on compiling IMF FSIs with EBA ITS data provide useful insights to users on how to explore supervisory data available through the EBA reporting framework.   View Article
EBA consults on Guidelines on outsourcing
These Guidelines, which review the existing CEBS Guidelines on outsourcing published in 2006, aim at establishing a more harmonised framework for outsourcing arrangements of all financial institutions in the scope of the EBA's action.   View Article
FCA publishes update on wide-ranging review of retail banking sector
The Review gives a greater understanding of retail banks’ business models, what includes looking at how personal current accounts (PCAs) are paid for, the possible impact of technological and regulatory developments such as Open Banking and changes to payment services due to the revised PSD2.   View Article
ECB: Working group on euro risk-free rates launches consultation on potential successors to EONIA
The working group on euro risk-free rates, for which the ECB provides the secretariat, is calling on market participants and all other interested parties to comment on its assessment of candidate euro risk-free rates against key selection criteria.   View Article
Bruegel: European bank mergers: domestic or cross-border?
As the European economy recovers from the global financial crisis, bank mergers are back on the agenda. While cross-border mergers have been predicted before, most European bank mergers have been domestic until now. What are the odds of cross-border mergers in the upcoming bank-consolidation wave?  View Article
EBA launches its staff papers series
The EBA launched its staff papers series, which provides a platform for EBA staff to disseminate research and thematic analyses to a wider public. The EBA Staff Papers series will make available selected studies on financial regulation, supervisory policy and legal issues of general interest with the aim of stimulating discussion and public debate.   View Article
Cheaper euro transfers: Council agrees its negotiating stance
EU ambassadors agreed the Council's negotiating stance on the Commission's proposal to make cross-border payments in euros cheaper across the EU.   View Article
EBA adds PSD2 to its online Interactive Single Rulebook and Q&A tools
The European Banking Authority has updated its online Interactive Single Rulebook and Q&A tool with the inclusion of the Payment Services Directive.  View Article
FCA statement on EBA’s draft PSD2 Guidelines and Opinion for banks and others involved in open banking
The EBA published an Opinion and draft Guidelines on the Regulatory Technical Standards on Strong Customer Authentication and Common and Secure Communication. FCA is supportive of the views contained in the EBA Opinion and encourage firms and API initiatives to consider several views.  View Article
Financial Times: US banks clear first round of Fed stress tests
US banks’ hopes of making record payouts to shareholders over the coming year were boosted as the industry cleared the first round of the Federal Reserve’s stress tests — although Goldman Sachs and Morgan Stanley scored lowest on a key measure of financial strength.  View Article
Financial Times: Steer clear of diluting the Volcker rule and repeating mistakes
The 2008 financial crisis and the recession that followed were caused, in large part, by the biggest global banks taking huge risky bets that went bad. Now, a decade later, US regulators are considering a proposal to gut the Volcker rule, a post-crisis regulation that was written to prevent that problem from happening again. The consequences could be as damaging as they are predictable.   View Article
BIS: Philip Lowe appointed to chair the Committee on the Global Financial System
At their meeting in Basel, the central bank Governors of the Global Economy Meeting (GEM) appointed Philip Lowe, Governor of the Reserve Bank of Australia (RBA), as Chair of the Committee on the Global Financial System (CGFS).  View Article
  Capital Markets Union
ISDA, AFME, ICMA, SIFMA and SIFMA AMG publish Global benchmark report
The report assesses the issues involved with benchmark reform, and makes recommendations on steps firms can take to prepare for the transition from interbank offered rates (IBORs) to alternative risk-free rates (RFRs).  View Article
ISDA: IBOR global benchmark transition report
There are now real concerns about the sustainability of certain IBORs due to a significant decline in activity in the unsecured bank funding market that they are supposed to represent.  View Article
Steven Maijoor addresses FESE Convention 2018 on MiFID II implementation
ESMA Chair Steven Maijoor spoke about ESMA’s assessment of the first months of MiFID II as well as issues identified in the area of secondary markets on which ESMA is intending to focus on in the coming months. He also touched upon the need for a third country regime for trading venues in MiFID II.   View Article
Speech by ESMA Executive Director Verena Ross on LEI at the Banque de France Conference
ESMA Executive Director Verena Ross delivered a speech on the Markets in Financial Instruments Directive and on Legal Entity Identifiers.  View Article
ESMA publishes responses to its Consultation on amendments to the EMIR Clearing Obligation under the Securitisation Regulation
ESMA published the responses received to its Consultation on amendments to the EMIR Clearing Obligation under the Securitisation Regulation.  View Article
ESMA clarifies CCPs’ liquidity risk assessment under EMIR
ESMA published an opinion which sets out how central counterparties in the EU should consider in their internal risk models the liquidity risk posed by all entities towards which the CCP has a liquidity exposure, such as liquidity providers.   View Article
Financial Times: MiFID II leads to exodus of sellside analysts
Heavy hitters in the investment industry have deplored the exodus of sellside analysts, a trend exacerbated by new EU-wide rules.   View Article
AFME response to the Commission’s amendments to the delegated act supplementing MiFID II on suitability requirements
Overall, AFME supports the objectives to improve the flow of ESG information so that clients make better informed sustainable investment decisions. They agree that clients should receive clear and transparent information regarding the nature of the investment they are contemplating, when relevant.  View Article
ICMA publishes new report on the CSD regulation: ‘How to survive in a mandatory buy-in world’
The report seeks to explain the additional market risks and economic uncertainties the CSDR buy-in regime will create for bond market participants, both buyers and sellers, as well as intermediaries and lenders of securities.  View Article
ESMA publishes responses to its Consultation on the “as stringent as” notion in the CRA Regulation
ESMA published the responses received to its Consultation on Draft Guidelines on “as stringent as” notion in the CRA Regulation.  View Article
  Clients Union
European Supervisory Authorities hold its 2018 Consumer Protection Day
The Joint Committee of ESAs hold its sixth annual Consumer Protection Day. The event brought together 250 consumer representatives, finance industry representatives and regulators to address major challenges facing consumer protection in financial services across the European Union.  View Article
EIOPA outlines key financial stability risks
EIOPA published its June 2018 Financial Stability Report of the (re)insurance and occupational pensions sectors in the European Economic Area.   View Article
Insurance Europe: 2017-2018 Annual Report published
Insurance Europe has published its 2017–2018 Annual Report, setting out the European insurance industry’s positions on the main insurance issues of the day.  View Article
Insurance Europe: Bold policymaker action is vital to close global protection gaps
Policymakers must act decisively to stimulate individuals to save more for their retirement, encourage the uptake of cyber risk insurance and mitigate the impacts of natural catastrophes and cyber risk, said Insurance Europe’s president, Andreas Brandstetter.  View Article
Insurance Europe: Survey shows Solvency II brings benefits but deters long-term business
A survey of insurers from across Europe has shown that over three quarters of the respondents have seen a positive effect from the EU’s 2016 Solvency II regulation on their risk management and governance practices and on their management of assets and liabilities.  View Article
EIOPA publishes an expanded set of Solvency II statistics on the European insurance sector
The EIOPA published a new set of statistical information on the European insurance sector based on Solvency II regulatory reporting for the fourth quarter of 2017.  View Article
Commercial Risk Europe: Solvency II ‘a highly rules-based exercise’, says Best
Solvency II has moved the European regulatory regime significantly towards a consistent, rigorous and market value-based system, but along the way it has become a highly rules-based exercise, according to AM Best.  View Article
Insurance Europe: Andreas Brandstetter named president of Insurance Europe
Andreas Brandstetter, the CEO and chairman of Austria’s UNIQA Insurance Group, has been elected president of Insurance Europe, the European insurance and reinsurance federation, for a term of three years.  View Article
  Asset Management
Financial Times: Europe’s investment funds scale new heights
Assets and inflows to European investment funds broke records last year as the bull market continued in fixed income and equities. European fund assets hit a record €15.6tn in 2017, according to statistics from the European Fund and Asset Management Association, the trade body.  View Article
EFAMA AGM reflects on the asset management industry’s record growth in 2017 and discusses regulatory priorities for the year ahead
At the occasion of EFAMA's Annual General Meeting (AGM) members exchanged views about the investment trends and evolving regulatory landscape.  View Article
ALFI response to the European Commission consultation on depositary safekeeping duties
ALFI published its analysis of the two drafts issued by the European Commission amending the Delegated Regulation in relation to depositary safekeeping duties towards AIF and UCITS clients in case of delegation.  View Article
  Corporate Governance/Accounting
FRC consults on proposed amendments to the FRC Taxonomies
The FRC has issued a consultation on proposed amendments to the FRC Taxonomies to support the objectives of enhancing the quality and accessibility of financial reporting in the UK and to enable digital reporting of IFRS and UK GAAP standards.   View Article
ECIIA: Internal auditors playing greater role in insurance regulation
Insurance regulators and supervisors across Europe are increasingly looking to internal auditors to help their organisations achieve the necessary compliance requirements, according to a recent meeting of ECIIA’s insurance committee in Stockholm, Sweden.  View Article
IASB: Transforming the impact of financial information - the role of technology
The CFA Institute and the IFRS Foundation hosted a panel debate to ask participants whether traditional metrics are still relevant amidst rapid technological advancements.   View Article
ECGI: Governance under the gun - spillover effects of hedge fund activism
The ECGI has published a paper on hedge fund activism written by Nickolay Gantchev, Oleg Gredil and Chotibhak Jotikasthira. Hedge fund activism has become pervasive in today’s corporate landscape.   View Article
  Anti-Money Laundering
Controls on cash entering and leaving the EU: Council endorses agreement
The EU's committee of permanent representatives endorsed an agreement between the Council, represented by the Bulgarian presidency, and the European Parliament on a draft regulation aimed at improving controls on cash entering or leaving the Union.  View Article
  Financial Services Policy
FSB assesses financial vulnerabilities and takes stock of actions under its 2018 workplan
FSB Plenary met to discuss risks and vulnerabilities from market developments in the global financial system and progress against its 2018 workplan for delivery to the Argentine G20 Summit in November.  View Article
ESBG releases position on EU Commission FinTech Action Plan
In its response to the recently released EU Commission Fintech Action Plan, ESBG outlined potential areas of harmonisation needed incl. crowdfunding platforms' disclosure requirements, registration requirements, risk management and consumer/investor protection rules.   View Article
IMF's Lagarde: Estimating cyber risk for the financial sector
The head of the International Monetary Fund analysed a IMF staff modeling exercise which estimates that average annual losses to financial institutions from cyber-attacks could reach a few hundred billion dollars a year, eroding bank profits and potentially threatening financial stability.  View Article
LSE: Tackling non-performing loans in the euro area
Markus Demary writes that some banks are not yet ready for a European Deposit Insurance Scheme and that vast amounts of money will need to be invested to get them in shape.  View Article
Main results - Eurogroup
The Eurogroup agreed on the surveillance framework that will apply after the end of Greece's economic adjustment programme, the size of the final tranche of financial support by the ESM, debt measures, fiscal targets, further steps for deepening EMU and the completion of the banking union.  View Article
Main results - Economic and Financial Affairs Council
The Council closed the excessive deficit procedure for France, issued recommendations to Hungary and Romania under the significant deviation procedure, and agreed on measures to strengthen administrative cooperation in order to improve the prevention of VAT fraud.  View Article
Fondation Robert Schuman: How to consolidate the euro area?
Faced with two challenges, that of the convergence of atomised national economies and the reinforcing of the internal cohesion of its structures, the eurozone has to evolve. Leaders have to discuss two series of measures: one focuses on the EMU, and the other, on the Union’s budget.  View Article
Trade barriers: EU removes record number in response to surge in protectionism
The annual report on Trade and Investment Barriers shows that the European Commission has eliminated the highest number ever of trade barriers faced by EU companies doing business abroad. European exporters reported a major increase in protectionism in 2017.  View Article
ESM Board of Governors approves 2017 Annual Report
The Board of Governors of the European Stability Mechanism (ESM) held its sixth Annual Meeting and approved the ESM Annual Report for 2017.   View Article

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