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07 November 2019

This week in "Brussels"


We have revised our approach to focus on the big themes for the next legislative period. We are targeting the interaction of the driving forces of politics and economics as they force the required changes in over-arching financial regulation, thus promoting greatar financial integration in Europe. Details of these services are here

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Articles 31 October 2019 - 7 November 2019


Banking Union

Financial Times: Germany’s Scholz gives ground on eurozone banking union plan : Germany’s finance minister has offered hope of a breakthrough in plans to create a full eurozone banking union by ending Berlin’s opposition to a common scheme to protect savers’ deposits. View Article
EBA publishes Opinion proposing to further strengthen depositor protection in the EU : The Opinion focuses on the payouts by deposit guarantee schemes (DGSs) and proposes a number of changes to the EU legal framework, aimed at strengthening depositor protection, improving depositor information, enhancing financial stability and reinforcing operational effectiveness of DGSs. View Article
New President of the European Central Bank : Christine Lagarde, former Managing Director of the International Monetary Fund, has taken up her duties as President of the European Central Bank (ECB). View Article
ECB: Working group on euro risk-free rates issues high level recommendations for fallback provisions in contracts referencing EURIBOR : The private sector working group on euro risk-free rates has published a set of recommendations for fallback provisions in contracts for cash products and derivative transactions referencing EURIBOR. These recommendations support compliance with the EU Benchmarks Regulation (BMR) and enhance legal and commercial certainty.  View Article
ECB: Working group on euro risk-free rates issues recommendations to address accounting impact of euro risk-free rates transition : The report highlights IFRS and IAS accounting consequences of the benchmark rate transition. The recommendations of the working group focus on hedge accounting. View Article
ECB: Working paper: The impact of central bank liquidity support on banks’ balance sheets : Authors examine the differential developments of the balance sheets of 172 euro area banks at the time of two types of long-term refinancing operations by the Eurosystem: VLTROs and TLTROs, respectively.  View Article
ECB's De Guindos: Welcome remarks : Remarks by Luis de Guindos, Vice-President of the ECB, at the ECB Forum on Banking Supervision, in which he touches upon efforts in carrying out banking sector stress tests and interaction in the conduct of prudential policy in the current environment. View Article
BIS: Shaping the future of payments : The payments landscape continues to morph. Driven by innovation and shifts in consumer preferences, new systems, new methods and new players are shaping the future of payments. The BIS Red Book statistics offer a look into that future. View Article

Capital Markets Union

Financial Times: Can the EU’s failed Capital Markets Union be revived? : Patrick Jenkins describes how some of the EU’s key economies have been trying to shock the CMU project back to life. View Article
Opening Statement by ESMA Chair Steven Maijoor at ECON Hearing : ESMA Chair Steven Maijoor gave MEPs practical examples from the last 12 months of how the supervisor aims to support the sustainable growth of the EU’s capital markets while ensuring stability and investor protection.  View Article
ESMA report sees decrease in prospectus activity for 2018 : In its annual report on prospectus activity, ESMA reports that in 2018 the number of prospectus approvals across the EEA decreased by almost 5% compared to 2017, which follows a decade-long trend observed since the start of the financial crisis.  View Article
EIOPA's Gabriel Bernardino statement at the hearing of the Committee on Economic and Monetary Affairs of the European Parliament : Mr Bernardino spoke about EIOPA’s work in strengthening supervisory convergence, the impact of the current financial and economic environment on the sectors and on EIOPA’s current focus on climate change, cyber risk and the completion of the Capital Markets Union. View Article

Environmental, Social, Governance (ESG)

Bruegel: How to make the European Green Deal work : Ursula von der Leyen has proposed a European Green Deal that would make Europe climate neutral by 2050. With this Policy Contribution, the authors provide a first analysis on how to make this initiative work. View Article
IASB's Hans Hoogervorst: The IASB—from financial to integrated standard-setter? : In a speech at the Eumedion Annual Symposium, IASB Chair Hans Hoogervorst discussed the Board’s projects on primary financial statements (PFS), management commentary and sustainability reporting. View Article
Insurance Europe: Comments on sustainability taxonomy published : Insurance Europe has published a position paper outlining its views on EU proposals for a sustainability taxonomy, in view of current trilogue discussions between the European institutions. View Article
BIS: Turning up the heat - climate risk assessment in the insurance sector : To facilitate a better understanding in climate risks area, this paper examines the different regulatory approaches currently in place relating to climate risk assessment, in particular through enterprise risk management frameworks.  View Article
The Investment Association: Investors encourage clearer link between pay and performance : Investors have encouraged all listed companies to have simpler executive pay policies that clearly link pay to a company’s long term success, in the Investment Association's (IA) updated annual guidelines for companies. View Article

Fin Tech Regulation

AFME publishes 14 industry recommendations for supporting the adoption of public cloud in capital markets : The recommendations for banks, cloud providers, regulators, and the industry as a whole aim to increase the transparency and collaboration required to build further confidence, trust and capability in public cloud computing across the capital markets industry. View Article

Friends' Standard Services

156th Brussels for Breakfast – CPD Notes : Organised by the Centre for the Study of Financial Innovation (CSFI), hosted by CISI and with co-presenters Sir David Liddington MP, John Rega (Politico) and Helen Thomas (BlondeMoney). View Article

Economic Policies Impacting EU Finance

POLITICO: Politics, not policy will help Lagarde save the eurozone : Her success at the helm of Europe’s central bank will depend on her ability to mend fences with hawkish policy makers, argue Guntram B. Wolff and Rebecca Christie. View Article
The Telegraph: Wall Street warns Lagarde of ECB quantitative easing ‘risk clusters’ : Endless money printing programmes will cause “tremendous” and damaging changes to stock markets, Wall Street has warned new European Central Bank president Christine Lagarde. View Article
Financial Times: Brexit is a warning to Germany’s ECB-bashers : Christine Lagarde’s first official outing as ECB president was to visit Berlin to honour former German finance minister Wolfgang Schäuble, which underlines her biggest immediate challenge: to salvage and rebuild the fraying acceptance of ECB policies, above all in Germany. View Article
Jacques Delors Institute Berlin: The Germans and Inflation - A Historical Misunderstanding : Nils Redeker and his co-authors dig deeper into the sources of the German aversion to expansionary monetary policy. Based on new survey data, they find that many Germans have a deeply flawed understanding of their own history. They thus tend to draw the wrong lessons from it. View Article
POLITICO: Report urges US to repair EU ties, calls Brussels ‘nascent power’ : Washington needs a "new special relationship" with Brussels and the EU — as part of an urgent effort to repair damage caused by Donald Trump, but also because France, Germany and the UK "lack the international clout they once had," according to a new report by the Center for an American Progress. View Article
ECMI: Liquidity and tail-risk interdependencies in the euro area sovereign bond market : The paper explores whether interdependencies play a role in amplifying tensions in European sovereign bond markets and are a source of cross-market spillovers. View Article
Vox EU: Liquidity linkages in European sovereign bond markets can amplify fundamental economic shocks : This column documents significant own- and cross-market interdependencies between liquidity and tail risks that amplify shocks likely attributable to economic fundamentals. The findings demonstrate the potential for the provision of liquidity across sovereign markets to be vulnerable to sudden fractures, with possible implications for euro area economic and financial stability. View Article
European Commission provides additional arguments in support of its proposal for the EU's next long-term budget : The European Commission has released additional figures making the case for its proposal for the EU's next long-term budget as put forward on 2 May 2019.  View Article

Broadening the International Role of the Euro

Financial Times: Lacklustre European banks poised to drag euro lower : When large European bank stocks suffer, that is usually bad news for the euro. This year has been no exception — and fears are growing that their uptick in recent months will be short lived. Fears grow that the ECB’s relaunch of its QE programme is also likely to hit the European currency. View Article
Vox EU: A digital euro to save EMU : This column argues that relaunching the euro as digital central bank currency could help reduce the debt of the euro states and end the sovereign-bank doom loop. It would also create a formidable competitor for other global digital currencies likely to emerge in the intermediate future. View Article
Gyorgy Matolcsy: We need to admit the euro was a mistake : The Hungarian central bank governor has called for an exit mechanism from the European currency. View Article

Basic Enconomic Indicators

Volume of retail trade up by 0.1% in euro area : In September 2019 compared with August 2019, the seasonally adjusted volume of retail trade increased by 0.1% in the euro area (EA19) and by 0.2% in the EU28, according to estimates from Eurostat. View Article

EU27 Politics

Outgoing Commission President Jean-Claude Juncker: 'I kissed Putin ... It certainly didn't hurt Europe' : In an interview, outgoing European Commission President Jean-Claude Juncker discusses his regret over not fighting Brexit, the special rapport he established with Trump and the prospects for Ursula von der Leyen, his successor at the helm in Brussels. View Article
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BBC Politics BBC Politics
"Brexit is the biggest foreign policy mistake in the post-war period" John Bercow gives his "honest view" on Brexit after standing down as Commons Speaker
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Bloomberg Brexit Bloomberg Brexit
If the U.K. leaves the EU in January without an orderly withdrawal agreement, it’s economic output would be 3.5% lower in two years, according to the IMF
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<a href=FT Brussels" src="" /> FT Brussels
Germany’s Scholz gives ground on eurozone banking union plan
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Read my notes on today's #Brussels4Breakfast @CSFI1 Participants discussed #UK 's general election, progress on the new #EuropeanCommission, latest #ECB changes, developments aimed at bringing closer a #CMU & #BankingUnion, new trends in #FinTech + #ESG
Graham Bishop #FBPE Graham Bishop #FBPE
My CPD notes on the lastest Brussels for Breakfast debate hosted by CISI @CSFI1 are now live! Become a Friend to read the full article here #B4B #Brexit #CMU #BankingUnion #FinTech #ESG #ECB
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#EYITEM has cut its UK GDP growth forecast to 1.0% for 2020, down from the 1.5% predicted three months ago. Read more in the new Autumn Forecast, available here:
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Bloomberg Brexit Bloomberg Brexit
While some polls have the Conservatives at 40%, they have sunk as low as 32% in others. Labour have ranged from 22% to 29%
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John Rega John Rega
First day on the job… Lagarde's political bent leaves critics fearing for ECB independence…
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Bloomberg Brexit Bloomberg Brexit
BREAKING: U.K. set for general election on December 12 as Parliament approves early poll to break the Brexit deadlock
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City A.M. City A.M.
Labour to back PM on 12 December election

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