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28 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

My video invitation to the 157th Brussels for Breakfast on 5th December is here. Some seats are available at the live meeting at CISI, and I would be delighted to hear suggestions for topics that should be covered. E-mail me:

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Articles 21 November 2019 - 28 November 2019

Banking Union

EBF: Copenhagen Economics presents its impact analysis of proposed Basel III finalisation in EU : Copenhagen Economics, a leading economic consultancy, has analysed the impact of the ‘Finalisation of the Basel III capital requirements’ at the request of the European banking sector through the European Banking Federation and a group of national banking associations. It is the first time that the full economic impact of Basel III has been calculated. View Article
BIS: Joint BCBS-BCG statement on proportionality : The Basel Committee and the Basel Consultative Group (BCG) support the use of proportionality in implementing the Basel Framework in a manner consistent with the Core Principles. The Basel Framework envisions a range of approaches, from simpler standardised approaches to advanced approaches. View Article
ECB's Mersch: From Basel III to European banking regulation : Yves Mersch, Member of the Executive Board of the ECB, argues which should be the ideal levels of capital and liquidity for striking a balance between enabling banks to perform their role in the monetary policy transmission mechanism and, at the same time, avoiding undue risks. View Article
The Economist: What next for Europe’s banking union? : When Olaf Scholz, Germany’s finance minister, cautiously accepted the idea of a common deposit-insurance scheme on November 5th, that removed one point of contention. But as one row is resolved, another—on the regulatory treatment of banks’ holdings of sovereign debt—has reopened. View Article
EBF: EU agenda holds opportunity of leveraging banking for global competitiveness and sustainable finance : The Board of the EBF called on the EU to leverage its fresh regulatory agenda for the financial sector to boost the global competitiveness of the European economy while more effectively engaging banks in financing the transition towards a sustainable society and in fighting financial crime. View Article
EBA launches consultation on disclosure and reporting of MREL and TLAC : This is the first time that the EBA introduces harmonised reporting and disclosure requirements for MREL and TLAC. These draft ITS follow an integrated approach and, in the case of disclosures, are aligned with the Basel Pillar 3 standards. By integrating disclosures and reporting, the EBA seeks to maximise efficiency by institutions, and to facilitate the use of information by authorities and market participants.  View Article
European Council: Non-performing loans: Council adopts position on a new mechanism for out-of-court enforcement : EU ambassadors approved the Council's position on a proposal for a common framework and minimum requirements for out-of-court mechanism to recover the value from loans guaranteed with collateral in case the borrower is not able to pay it back. Effective out-of-court enforcement can help prevent the accumulation of non-performing loans (NPLs), as it provides banks with legal instruments to recover collateral more quickly. View Article
ECB's Mersch: Future-proofing the European banking market – removing the obstacles to exit : Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, about the ECB's efforts toward facilitating bank failures and bank M&A. View Article
BIS: Basel Committee publishes more details on global systemically important banks : The Basel Committee on Banking Supervision published further information related to its 2019 assessment of global systemically important banks (G-SIBs), including additional details underlying the scoring methodology. View Article
European Parliament: Which supervisory or regulatory treatment of banks’ exposures to sovereign risks? : Commission’s Executive Vice-President Valdis Dombrovskis explains that “it is necessary to encourage banks to diversify further their sovereign bond portfolios and reduce the home bias, which remains far too strong and leaves banks overly exposed to the fiscal distress of their home government.” View Article
EBA publishes its roadmap on the risk reduction measures package : The EBA published a set of roadmaps outlining its approach and timelines for delivering the mandates stemming from the Risk Reduction Measures Package. These mandates are mainly focused in the areas of governance and remuneration, large exposures, resolution as well as reporting and disclosure.  View Article
Basel Committee issues guiding principles for the operationalisation of a sectoral countercyclical capital buffer : This document aims at supporting jurisdictions willing to implement a SCCyB by facilitating a consistent implementation across them. The principles are only relevant for jurisdictions that voluntarily choose to implement a SCCyB at a national level. View Article
ECA: EU’s potential liability in winding up failing banks assessed as “remote” : The Single Resolution Board (SRB) and the European Commission – in line with accounting rules – did not disclose any contingent liabilities potentially arising from ongoing judicial proceedings against their role in winding up failing euro area banks, according to a new report by the ECA. View Article
Bruegel: Bank regulation in the European Union neighbourhood: limits of the ‘Brussels effect’ : The EU model of financial market regulation is increasingly copied by third countries. In this context, the EU’s efforts to promote its model beyond its borders should take into account the underdevelopment of financial markets in many partner countries, and the often insufficient capacity of regulators and supervisors. View Article
IMF: Breaking the bank? A probabilistic assessment of euro area bank profitability : This paper attempts to shed light on the main determinants of the profitability of larger euro area banks using a novel approach. Specifically, the paper proposes a more probabilistic approach, which places greater emphasis on bank heterogeneity by focusing on bank profitability distributions.  View Article
PIIE: A major step toward combating money laundering in Europe : The struggle to combat money laundering in Europe took a momentous step forward on November 8 when the finance ministers of France, Germany, Italy, Latvia, the Netherlands, and Spain put forward a joint position paper. Their proposal is likely to pave the way for strong EU legislation, buttressing the credibility of the new European Commission led by Ursula von der Leyen. View Article
BIS: Unintended side effects: stress tests, entrepreneurship, and innovation : Stress tests have effectively reduced systemic risk and improved risk management and capital planning at individual institutions. However, policymakers and academics worry about the potential negative effects on credit and the real economy. This paper investigates how regulatory stress tests may have affected entrepreneurship in the United States. View Article
ECB: Occasional paper: The ECB after the crisis: existing synergies among monetary policy, macroprudential policies and banking supervision : The aim of this paper is to describe the current setting. What are the working arrangements of this enlarged ECB, and what are the similarities and synergies these functions? View Article

Capital Markets Union

ESMA: Steven Maijoor delivers keynote at EFAMA Investment Management Forum : The Chair of the ESMA, Steven Maijoor, has delivered the keynote address at EFAMA’s Investment Management in which he focused on fund liquidity and how asset management can play a role in the Capital Markets Union, while supporting investor protection and financial stability. View Article
ICMA: New market buy-in regime threatens European bond market liquidity : ICMA published a study on the expected impact of the new mandatory buy-in regime, to be introduced in 2020 under the EU Central Securities Depositories Regulation (CSDR), on bond markets in Europe. View Article
ESMA publishes responses to consultation on aligning MiFIR to the changes introduced by EMIR Refit : ESMA published the responses it received to its consultation on aligning the Markets in Financial Instruments Regulation (MiFIR) requirements to the changes introduced by the revision of the European Market Infrastructure Regulation (EMIR Refit). View Article
EBA consults on specific supervisory reporting requirements for market risk : The EBA launched a public consultation on specific supervisory reporting requirements for market risk, which are the first elements of the Fundamental Review of the Trading Book (FRTB) introduced by the revised Capital Requirements Regulation (CRR2) in the prudential framework of the EU. View Article
Bank of France's Beau: What policy framework to help building innovation and growth into Europe's capital market? : Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the AFME Annual Capital Markets Technology and Innovation Conference, where he spoke about the challenges linked to innovation. View Article

Environmental, Social, Governance (ESG)

ECB: Luis de Guindos: Implications of the transition to a low-carbon economy for the euro area financial system : The necessary transition to a low-carbon economy entails risks for the financial system. Correctly assessing these risks requires a higher quantity and quality of disclosures. The ECB is contributing to the development of an analytical framework for climate risk assessment, and developing methods to gauge exposures to climate-related risks on the balance sheets of financial institutions. View Article
OECD: Donors must do more to align development finance with climate goals : Donor countries must do more to bring development finance in line with climate goals, raising the share used for climate action and reducing to zero the amount that supports new fossil fuel activities, according to a new OECD report. View Article
Financial Times: Brussels eyes easing bank rules to spur green lending : Brussels is exploring a proposal to ease EU banking rules in a bid to spur green investment in Europe. View Article
EIB Investment Report 2019: Uncertainty weighing on EU firm investment : European firms are becoming increasingly pessimistic about the economic outlook according to the new EIB Investment Report 2019/2020. The report also finds that investment in climate change mitigation is lower than that of major economies like the US and China. View Article
ROBECO: Spearheading the sustainable investing movement : Gilbert Van Hassel discusses leadership in sustainable investing and the S&P Global partnership deal. View Article
GRI: Improving understanding of sustainability disclosure by aligning taxonomy : Two leading initiatives providing resources to help audiences understand the ESG disclosure landscape – Carrots & Sticks and the Reporting Exchange – have collaborated to improve access to reliable and comparable information by aligning taxonomies. View Article
IASB Guide:How to select and apply accounting policies? : The IFRS Foundation has published a guide to help companies determine their accounting policies when preparing IFRS financial statements. View Article
Benoît Cœuré - FT

Fin Tech Regulation

ECB´s Benoît Cœuré: Towards the retail payments of tomorrow: a European strategy : One area that has received less attention from policymakers in recent years, however, is the European retail payments market, in particular point-of-sale and online payments. A lot has been achieved at the back-end of European retail payments systems, most notably under the umbrella of the Single Euro Payments Area, or SEPA. View Article
BIS: Johannes Beermann: Cash and digital currencies from a central bank's perspective : Keynote by Dr Johannes Beermann, Member of the Executive Board of the Deutsche Bundesbank, at the Payment Asia Summit, in which he shares his view on current trends in cash management as well as the impact of digital currencies on the “world of payments.” View Article
The Economist: Big Tech takes aim at the low-profit retail-banking industry : Yet the hype conceals rising nervousness among the fintech participants. Each of the so-called GAFA quartet is making moves. Amazon introduced a credit card for underbanked shoppers in June; Apple launched its own credit card in August. Facebook announced a new payments system on November 12th.  View Article
The Economist: How machine learning is revolutionising market intelligence : Intelligence-gathering is a labour-intensive business. It is thus ripe for automation. That this is happening in finance is also natural. There is a well-defined objective (to make money). There is a well-defined end-point (buy, sell or avoid). Without such clarity of purpose, intelligence is an endless river. It is one undammed thing after another. View Article
IFAC: IAASB Tech Talk : As part of the IAASB’s technology focus, this is the second in a series of publications that provides an update on efforts to appropriately address the technology related issues in recently and soon-to-be issued standards and EDs. It also includes additional relevant news and information on technology in audit, and recent technology working group activities. View Article

Friends' Standard Services

Graham Bishop re-elected to the National Council of the European Movement (UK) : We are delighted to announce that Graham Bishop has been re-elected to the National Council of the European Movement (UK) for a fourth term. View Article
Christine Lagarde - Deutsche Welle

Economic Policies Impacting EU Finance

OECD Economic Outlook: Weak trade and investment threaten long-term growth : Trade conflict, weak business investment and persistent political uncertainty are weighing on the world economy and raising the risk of long-term stagnation, according to the OECD’s latest Economic Outlook. View Article
New Europe: Lagarde says EU should turn to domestic demand for growth : Making clear that in her view that is a systemic or eurozone issue, Lagarde called for investment that would bolster productivity, allowing Europe to remain at the forefront of global value chains. Lagarde made clear that was a challenge that was not “country-specific.” View Article
BIS: Jens Weidmann: What the future holds - benefits and limitations of forward guidance : Speech by Dr Jens Weidmann, President of the Deutsche Bundesbank, in which he reflects on the experience Deutsche Bundesbank has made with forward guidance in the last few years, but he also discusses possible pros and cons of the second, more daring type of forward guidance. He closes with some remarks on monetary policy in the euro area. View Article
ACCA welcomes the entry into force of the EU-Singapore Free Trade Agreement : The ground-breaking new Free Trade Agreement (FTA) between the EU and Singapore, the 16th trade agreement put in place by the EU since 2014, will pave the way for an enhanced trade and investment relationship between the EU and South East Asia, says the global accountancy body. View Article

Broadening the International Role of the Euro

SUERF: Following “Libra” German banks say: The economy needs a programmable digital euro : The German private banks support the creation of a programmable account and crypto-based digital euro and say that its interoperability with book money ensured. The condition for this is establishing a common pan-European payments platform for the programmable digital euro. View Article
Ursula Von Der Leyen - POLITICO

EU27 Politics

Remaining united: The European Council July 2018 to November 2019, report by President Donald Tusk : This report details the work of the European Council from July 2018 to November 2019. It is the third report on the European Council by President Tusk during his term. This final volume focuses on the EU's response to Brexit. View Article
EurActiv: Parliament backs von der Leyen’s ‘fresh start for Europe’ Commission : The European Parliament gave the green light to Ursula von der Leyen’s college of Commissioners “for a fresh start for Europe”. View Article
Graham Bishop #FBPE retweeted
Bloomberg Brexit Bloomberg Brexit
British automakers warn that the next U.K. government needs to deliver a “world-beating Brexit trade deal” to bolster their competitiveness
Graham Bishop #FBPE retweeted
<a href=FT Brussels" src="" /> FT Brussels
Green finance: credit check
Graham Bishop #FBPE retweeted
Romesh Vaitilingam Romesh Vaitilingam
Economic consequences of Brexit are overwhelmingly negative, @CEP_LSE analysis @lsebrexitvote, #GE2019Economists @swatdhingraLSE & Thomas Sampson, #GE2019…
Graham Bishop #FBPE retweeted
Peter Foster Peter Foster
NEW: Boris Johnson's 'arbitrary' Brexit deadline will damage UK economy, warn 14 UK trade experts in letter to @Telegraph - lamenting falsehoods on both sides and calling for equivalent of OBR to help create fact-based conversation around trade /1.…
Graham Bishop #FBPE retweeted
Alessandro Speciale Alessandro Speciale
Firms in France, Germany, #Italy and Spain may face the biggest burden if Olaf Scholz’s plans on European banking integration come to fruition… via @markets @WeberAlexander
Graham Bishop #FBPE retweeted
European Commission ???? European Commission ????
Replying to @vonderleyen
Following today's positive vote by the European Parliament, the #vdLCommission will officially start on 1 December 2019. Missed the speech by President-elect @vonderleyen? Watch it here.
Graham Bishop #FBPE retweeted
<a href=FT Brussels" src="" /> FT Brussels
Michel Barnier pledges to prioritise UK trade deal post-Brexit
Graham Bishop #FBPE retweeted
Bloomberg Brexit Bloomberg Brexit
More than 160 economists and academics have backed Labour’s election promises as the best way to help the U.K. economy
Graham Bishop #FBPE retweeted
BBC Politics BBC Politics
Boris Johnson's push to "get Brexit done" by December 2020 is "diplomatic amateurism" that raises the risk of leaving without a deal, warns former UK ambassador to EU Sir Ivan Rogers
Graham Bishop #FBPE retweeted
The Guardian The Guardian
The latest poll shows Labour at 34% – the party's highest since May…

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