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14 November 2019

This week in "Brussels"


We are focussed on the big themes for the next legislative period and 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. Naturally, these factors include ESG and Fin Tech. Details of these services are here

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Articles 7 November 2019 - 14 November 2019

General Policy

European Commission: Results of the fitness check of supervisory reporting requirements in EU financial services legislation : The European Commission presented the results of the so-called fitness check of supervisory reporting requirements in EU financial services legislation.  View Article
FSB Plenary met in Paris : The FSB Plenary met in Paris to review vulnerabilities in the global financial system, discuss FinTech developments and ongoing work, and agree its work programme for 2020. View Article
FSB Europe group discusses regional vulnerabilities, stablecoins, financial benchmark reform and crisis simulations : Members discussed global and regional financial vulnerabilities, including the challenges posed by subdued economic growth in Europe, a persistent search for yield and continued pressures on the profitability of European banks. View Article

Banking Union


Valdis Dombrovskis - Thegreekobserver


European Commission: Keynote speech of Vice-President Valdis Dombrovskis on challenges and impacts of implementing Basel III : In his speech Mr Dombrovskis sums-up the main developments in the banking sector since the financial crisis. Dombrovskis focuses on NPLs, the banking package, the Basel III implementation and the deposit insurance scheme as the third pillar of Banking Union. View Article
EBA announces timing for publication of 2019 EU-wide transparency exercise and risk assessment report : The European Banking Authority (EBA) announced the timing for the release of its 2019 Risk assessment report and transparency exercise with bank by bank data. View Article
EBA publishes 2020 EU-wide stress test methodology and draft templates : The methodology and templates cover all relevant risk areas and incorporate the feedback received during the discussion with the industry in the summer of 2019. The stress test exercise will be formally launched in January 2020 and the results published by 31 July 2020. View Article
EBA shows that efforts to improve EU banks’ asset quality have proven successful but pockets of risks remain : The EBA published a Report on trends in asset quality of the EU banking sector, which show it has significantly improved over the last four years. Total non-performing loans (NPLs) decreased from over EUR 1.15 trillion in June 2015 (6% as a percentage of total loans) to EUR 636 billion as of June 2019.  View Article
EurActiv: German plan brings ‘new impetus’ to banking union, Eurogroup says : Finance ministers welcomed a German initiative to unblock proposals for a common bank deposit guarantee scheme in the eurozone, but questioned Berlin’s request to ask additional capital buffers in return for banks holding sovereign debt. View Article
Financial Times: Italy warns against German banking union plans : Italy has warned that a German proposal to complete the EU’s banking union would harm the competitiveness of the bloc’s banks, in comments heralding complex negotiations over Europe’s most ambitious integration project since the creation of the single currency. View Article
European Council: ECB executive board: Eurogroup gives support to Isabel Schnabel's candidacy : The Eurogroup gave its support to the candidacy of Isabel Schnabel to become the new member of the European Central Bank's executive board. View Article
BIS: Appointments made to lead BIS central bank groups : Central bank Governors meeting at the Bank for International Settlements (BIS), a hub for central banks and other financial regulatory and supervisory authorities, made a number of appointments to lead key central bank groups. View Article
ECB: Working group on euro risk-free rates recommends fallback arrangements for users of €STR : The private sector working group on euro risk-free rates has published a report on €STR fallback arrangements. The report explains that the working group has assessed two options for possible fallback arrangements for €STR products. View Article
BIS: Basel Committee consults on guidelines on cooperation between prudential and AML/CFT supervision : The BCBS published a consultative document entitled Introduction of guidelines on interaction and cooperation between prudential and AML/CFT supervision. The Basel Committee proposes to amend its guidelines by providing detailed and practical guidelines on the interaction and cooperation between prudential and anti-money laundering and combatting the financing of terrorism (AML/CFT) supervision.  View Article
Ed Sibley: Retail banking - delivering for consumers? : Address by Mr Ed Sibley, Deputy Governor (Prudential Regulation) of the Central Bank of Ireland, on how the approach to delivering for a bank's customers is undergoing fundamental change. Sibley also discusses the technology risk and environmental issues facing retail banking sector. View Article
BIS: New BIS Innovation Hub Centre in Singapore : The Monetary Authority of Singapore (MAS) and the Bank for International Settlements (BIS) launched the BIS Innovation Hub Centre in Singapore. This is the BIS's first expansion of its global footprint in 17 years. View Article

Capital Markets Union

Capital Markets Union: Council adopts legislative reforms : The Council adopted a set of legislative reforms on sustainable finance, investment firms, covered bonds and SME growth markets, which are part of progress towards the capital markets union. View Article
Remarks of Vice-President Valdis Dombrovskis at Bloomberg Event “Rebooting the Capital Markets Union” : Mr Dombrovskis stated that Europe cannot successfully play a key global role without further deepening EMU, and a deep and liquid CMU is vital for that. He also pointed out that developing sustainable finance is critical to the long-term competitiveness of the EU financial and banking sectors. View Article
ESMA advises the European Commission on the supervisory regime for third-country CCPs : ESMA published three sets of technical advice to the European Commission regarding third-country central counterparties (TC-CCPs) under the revised European Market Infrastructure Regulation (EMIR 2.2). View Article
FCA: Statement on MiFID II inducements and research : The FCA welcomes the US Securities and Exchange Commission’s (US SEC) extension of no-action relief relating to the Markets in Financial Instruments Directive II (MiFID II) inducements and research provisions. View Article
The Global Federation of Insurance Associations publishes Annual Report for 2018-19 : The GFIA’s new Annual Report details the federation’s activities on topics ranging from managing cyber risks, dealing with disruptive technology and tackling barriers to international trade. View Article
Insurance Europe: Business federations raise significant concerns about Council's proposed changes to EC representative actions proposal : A group of 21 business federations — including Insurance Europe — have written to the Council of the EU calling for at least an impact assessment to be carried out on its proposed major changes to the European Commission’s proposal for a directive on representative actions.  View Article

Environmental, Social, Governance (ESG)

European Council: Climate finance: EU and member states' contributions up to €21.7 billion in 2018 : The EU and its member states remain the largest provider of public climate finance. Their total contributions amounted to €21.7 billion in 2018, up from €20.4 billion in 2017. The contributions were successfully channelled into climate change mitigation and adaptation initiatives in developing countries. View Article
EurActiv: Banks taking only ‘superficial’ climate action : Despite an explosion in green finance, banks have made only superficial changes to their lending practices, with fossil fuel funding going virtually unabated over the past years, according to a new report by Boston Common Asset Management. View Article
Financial Times: Central banks’ mandates allow them to tackle climate change : There is now a wide consensus that climate change is a financial stability risk. Research by BlackRock shows that asset prices often do not reflect true exposure to physical climate risks and those related to energy transition. Central banks have a responsibility to make the financial institutions they supervise treat these risks as rigorously as any other. View Article
Financial Times: Central bankers are not climatologists : The challenges to a green energy transition do not principally come from shortcomings in central bank policy, writes John Dizard. Parsing and revising climate-based financial markets risk measures or providing marginally subsidised liquidity for green bonds and similar securities won't do the trick. View Article
Commercial Risk Europe: The changing shape of environmental regulation – a challenge for multinational businesses : Around the world there has been a significant strengthening of regulation, consisting not only of tighter new rules but also more rigorous, consistent enforcement.  View Article
IPE: Reputational risk drives ESG at pension funds more than at other investors : Avoiding reputational risk drives pension funds to adopt environmental, social and corporate governance (ESG) “principles” more so than it does other types of institutional investors, a survey suggests. View Article
IFAC: Enhancing corporate reporting to meet the needs of investors and other stakeholders : Organizations need to provide a clear and concise picture of their ability to create sustainable value over time. At the same time, rapid change and disruption, driven by climate change and technology, are forcing businesses to reconsider their approach to value creation and reporting. View Article
IIRC: Accounting for value creation and encouraging the rise of the Chief Value Officer : Accounting for value creation needs rethinking. Value is created through knowledge and creativity. Digital disruption is threatening entire industries. Financial markets are fraught with geopolitical and economic volatility. The deepening climate emergency, and other environmental issues, mean that business as usual is not an option. View Article

Fin Tech Regulation

Project Syndicate: The digital money revolution : The rapid pace and sheer scale of innovation in digital currencies and mobile payments indicates that a monetary revolution is forthcoming. The choice for governments and central banks is whether to stand in front of a train that is gaining steam, or get on board and reap the benefits. View Article
BIS: Benoît Cœuré appointed to head BIS Innovation Hub : The Board of Directors of the Bank for International Settlements (BIS) on Sunday appointed Benoît Cœuré as Head of the new BIS Innovation Hub, set up to foster international collaboration among central banks on innovative financial technology. View Article

Friends' Standard Services

46th Brussels for Brunch Webinar November 2019 : This is the link to the recorded webinar at CISI. View Article

Economic Policies Impacting EU Finance

Autumn 2019 Economic Forecast: A challenging road ahead : The European economy is now in its seventh consecutive year of growth and is forecast to continue expanding in 2020 and 2021, the latest European Commission's Economic Forecast states. View Article

Main results - Economic and Financial Affairs Council : The Council adopted conclusions on climate finance. Ministers discussed taxation and adopted a recommendation on the appointment of an ECB executive board member. View Article
Main results - Eurogroup : The Eurogroup in regular format focused on investment in innovation and the economic situation in the eurozone. In inclusive format, ministers discussed topics including: the ESM treaty and a European deposit insurance scheme (EDIS). View Article
Pierre Moscovici: How to get eurozone out of its slump : Europe needs to relaunch its economy on a sustainable path focusing on four major policy priorities, writes the outgoing commissioner for economic and financial affairs in POLITICO. View Article
EU-Singapore agreement to enter into force on 21 November 2019 : EU Member States endorsed the trade agreement between the EU and Singapore. This means the agreement will enter into force as soon as 21 November. View Article
Fondation Robert Schuman: The drafting of a European Business Code : The citizens’ consultations on Europe showed that many economic players regretted the lack of harmonisation in Europe’s business code, which would contribute to solving this problem and help European businesses and at the same time the economies of its Member States. View Article
ECB's Cœuré: A tale of two money markets: fragmentation or concentration : Speech by Benoît Cœuré, Member of the Executive Board of the ECB, at the ECB workshop on money markets, monetary policy implementation and central bank balance sheets, in which he explains why managing liquidity conditions in the post-crisis environment has become more complex. View Article

EU27 Politics


Donald Tusk - FT


Keynote speech by President Donald Tusk at the opening ceremony of the 2019/2020 academic year at the College of Europe : The outgoing Council President took stock of his years in office and urged Britain to reverse Brexit, warning that "after its departure, the UK will become an outsider, a second-rate player, while the main battlefield will be occupied by China, the US and the EU." View Article
Institute for Government: The UK’s refusal to appoint a commissioner is a risk for the EU : Georgina Wright says that the UK’s failure to appoint a British commissioner could delay the start of the new European Commission until 1 February – a decision which would be made with the EU’s interests in mind. View Article
The Economist: Emmanuel Macron on Europe’s fragile place in a hostile world : In a blunt interview the French president laid out his thoughts on NATO, America and the future of the EU. View Article
Financial Times: European politics rewards those who want to get things done : From Emmanuel Macron to the Spanish far-right, there is a hunger for change in the EU, argues Martin Sandbu. View Article
Financial Times: Spain has a new coalition but the deadlock is not yet broken : The Socialist party (PSOE) and radical left Podemos, which failed to agree on a coalition in months of wrangling after April’s general election, unveiled an alliance they wrapped up in a single afternoon after the rerun vote to which they subjected wearied Spanish voters. View Article
Graham Bishop #FBPE retweeted
Tusk: "I have been called a romantic and an anglophile, both terms, in my opinion, quite suitable and merited. Most importantly, however, Brexit hasn't divided us."
Graham Bishop #FBPE retweeted
The Independent The Independent
Elon Musk says Brexit made him decide against Tesla electric car Gigafactory in UK…
Graham Bishop #FBPE retweeted
Bloomberg Brexit Bloomberg Brexit
The U.K. economy loses jobs in the third quarter and vacancies post their largest annual decline since the financial crisis in further evidence that Brexit uncertainty is finally hitting the labor market
Graham Bishop #FBPE retweeted
BBC Politics BBC Politics
Nigel Farage says the Brexit Party will not contest the 317 seats the Conservatives won at the last election, claiming it's the best way to "prevent a second referendum" He had previously said his party would fight up to 600 seats [tap to expand]

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