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19 December 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 158th Brussels for Breakfast on 14th January 2020 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:

Interested in Continuing Professional Development (CPD)? Please click here for our CPD services

This is the last weekly of the year, so Merry Christmas from the team, and a very happy 2020!
We will be back on January 9th.

Articles from 12 December 2019 - 19 December 2019


Euro Summit - European Council press


General Policy

Euro Summit statement : EU27 leaders took stock of progress made on the implementation of the June 2019 Statement of the Euro Summit, including the revision of the ESM Treaty, the budgetary instrument for convergence and competitiveness (BICC), and technical work on the strengthening of the banking union. View Article

Banking Union

So you think the banking crisis is over? Sorry to spoil your Christmas! : Policymakers say they have learnt the lessons and the new rules ensure that the previous crisis cannot be repeated. However, there is a large light that is flashing ever-stronger orange: the stock markets are sending a strong message about the poor health of EU banks, warns Graham Bishop. View Article
EBA publishes 2020 EU-wide stress test templates after testing them with banks : The EBA published the templates for the 2020 EU-wide stress test, after the feedback received by banks during the testing phase. The stress test exercise will be formally launched in January 2020. View Article
EBA consults to amend standards on benchmarking of internal models : The EBA launched a consultation to amend the Commission's Implementing Regulation on benchmarking of internal models to adjust the benchmarking portfolios and reporting requirements in view of the benchmarking exercise it will carry out in 2021.  View Article
ISDA launches consultation on fallbacks for Euro LIBOR and EURIBOR : ISDA has launched a supplemental consultation on the spread and term adjustments that would apply to fallbacks for derivatives referencing euro LIBOR and EURIBOR in the event those benchmarks are permanently discontinued.  View Article
BIS: Launch of the consolidated Basel framework : The Basel Committee on Banking Supervision has launched its consolidated Basel framework. The framework brings together all of the Basel Committee's global standards for the regulation and supervision of banks and presents them on a new section of its website.  View Article
Bruegel: Impediments to resolvability of banks : This paper gives an overview of the seven aspects of resolvability defined in 2019 by the Single Resolution Board, and then assesses progress in two key areas, based on evidence gathered from public disclosures made by the 20 largest euro-area banks.  View Article
ECB publishes revised supervisory fee framework : The ECB has published its amended Regulation on supervisory fees, which is the outcome of two public consultations. It has also updated the related Decision on the data used to calculate annual fees. The revised framework will apply from the 2020 fee period onwards.  View Article
Bank of England: Stress testing the UK banking system: 2019 results : The 2019 stress test shows the UK banking system is resilient to deep simultaneous recessions in the UK and global economies that are more severe overall than the global financial crisis. The core of UK financial system could also face a worst-case disorderly Brexit, says the report. View Article
Bank of England consults on its proposals for stress testing the financial stability implications of climate change : The Bank of England has published a discussion paper which sets out its proposed framework for the 2021 Biennial Exploratory Scenario (‘BES’) exercise. The objective of the BES is to test the resilience of the largest banks and insurers (‘firms’) to the physical and transition risks associated with different possible climate scenarios, and the financial system’s exposure more broadly to climate-related risk. View Article
ECB's De Guindos: Financial innovation for inclusive growth: a European approach : Speech by Luis de Guindos, Vice-President of the ECB, at the conference Financial Integration and Inclusive Development – A View from the Mediterranean Countries, in which he outlines the benefits of financial innovation, but also draws attention to areas where improvement is required.  View Article
European Commission: Consumers and businesses to save money thanks to new EU cross-border payments rules : New EU rules will ensure that all cross-border payments in euro in non-eurozone Member States - Bulgaria, Croatia, Czechia, Denmark, Hungary, Iceland, Liechtenstein, Norway, Poland, Romania, Sweden, United Kingdom - will be priced the same as domestic payments.  View Article
ESAs transform the way competent authorities cooperate with each other on AML/CFT matters : The ESAs published Joint guidelines on cooperation and information exchange, establishing colleges of anti-money laundering and countering the financing of terrorism (AML/CFT) supervisors for the first time in the EU to ensure effective cooperation and information exchange between competent authorities.  View Article
Financial Times: UK regulators step up external probes of financial groups : The number of independent investigations ordered by UK regulators into financial institutions has risen for the first time in four years, driven by concerns around money-laundering and white-collar crime, according to new data. View Article

Capital Markets Union

Recent Developments in European Capital Markets: Key findings from the 2018 ECMI Statistical Package : The key trends obtained from the Package on equity markets, debt securities, exchange-traded derivatives, over-the-counter derivatives and asset management are outlined in this report. View Article
ESMA: Procedural rules for penalties imposed on Third-Country CCPs, TRs and CRAs : This consultation paper sets out ESMA’s preferred options for the procedural rules on penalties imposed on TC-CCPs and TRs. In order to ensure alignment, the consultation paper sets out also ESMA’s proposed amendments to the existing procedural rules for penalties imposed on CRAs. View Article
BIS: Central counterparty exposure in stressed markets : Authors propose a new way of monitoring the risk exposure of a central counterparty (CCP) towards its clearing members. For that, they track and break down changes in CCP exposure into price- and position-related factors.  View Article
FSB sets out 2020 work programme : The FSB’s work priorities for 2020 reflect the evolving nature of the global financial system and associated risks to financial stability. View Article
IOSCO consults on measures to reduce conflict of interests in debt capital raising : IOSCO is requesting feedback on proposed guidance to help IOSCO members address potential conflicts of interest and associated conduct risks arising from the role of market intermediaries in the debt capital raising process. View Article
ESMA issues second pan-EU overview on the use of supervisory sanctions for UCITS : ESMA issued its second annual report on sanctions (penalties and measures) imposed by NCAs under the Undertakings for Collective Investments in Transferable Securities (UCITS) Directive. This report covers the year 2018. View Article
EIOPA publishes its fourth annual analysis on the use and impact of long-term guarantees measures and measures on equity risk : The EIOPA submitted to the European Parliament, the Council of the European Union and the European Commission, its 2019 and fourth Annual Report on Long-Term Guarantees Measures (LTG) and Measures on Equity Risk. View Article
FCA and Bank of England statement on joint review of open-ended funds : In its Financial Stability Report, the Financial Policy Committee (FPC) has set out initial findings of a joint review by the Financial Conduct Authority (FCA) and the Bank of England on open-ended investment funds and the risks posed by their liquidity mismatch. View Article
EIOPA publishes a report on insurers’ asset and liability management in relation to the illiquidity of their liabilities : The report supplements information provided in EIOPA's annual reports on long-term guarantee measures and is published in response to a request from the European Commission in the context of the 2020 Review of Solvency II.  View Article
EIOPA publishes annual report on the use of capital add-ons under Solvency II : The objective of the capital add-on measure is ensuring that the regulatory capital requirements reflect the risk profile of the undertaking or of the group.  View Article
Accountancy Europe: EIOPA’S Solvency II reporting and disclosure review 2020 : Accountancy Europe has responded to EIOPA’s Solvency II reporting and disclosure review 2020, more specifically to the audit section. View Article
EIOPA consults on guidelines on Information and Communication Technology security and governance : These guidelines shall provide guidance to national supervisory authorities and market participants on how regulation regarding operational risks set forth in Directive 2009/138/EC and in the Commission's Delegated Regulation 2015/35 and EIOPA Guidance set out in EIOPA's Guidelines on System of Governance is applied in the case of ICT security and governance.  View Article
EIOPA publishes the results of the 2019 Occupational Pensions Stress Test : The EIOPA published the results of its 2019 Institutions for Occupational Retirement Provisions (IORPs) Stress Test. A stress test of pension schemes across the European Union wiped out €270 billion or almost a quarter of investments at funds that took part. For the first time, this European stress test exercise covered the analysis of ESG factors for IORPs. View Article
IPE: EIOPA eyes combining DB and DC in future pension fund stress tests : EIOPA will be looking to assess defined benefit (DB) and defined contribution (DC) pension schemes together in future stress tests of the European pension fund sector, it has indicated. View Article
ESMA publishes responses received to its FRANDT consultation : ESMA published the responses it received to its consultation on its draft technical advice on commercial terms for providing clearing services under EMIR (FRANDT). View Article

Environmental, Social, Governance (ESG)



Council of the EU: Sustainable finance: EU reaches political agreement on a unified EU classification system : The EU will soon have in place a common classification system to encourage private investment in sustainable growth and contribute to a climate neutral economy. EU ambassadors today endorsed a political agreement reached between Finland's presidency of the Council and the European Parliament on a EU-wide classification system, or "taxonomy". View Article
European Parliament: Climate change: new rules agreed to determine which investments are green : Parliament negotiators reached an agreement with the Council on new criteria to determine whether an economic activity is environmentally sustainable. View Article
FRC: Streamlined Energy & Carbon Reporting (SECR) Taxonomy : The 2019 Streamlined Energy & Carbon Reporting (SECR) taxonomy is an addition to the FRC taxonomies suite to reflect the new reporting requirements for energy and carbon data introduced on 1st April 2019.  View Article
Accountancy Europe: Accountancy profession is ready to advance the EU’s Green Deal : Accountancy Europe supports the EC’s initiative for the Green Deal, presented last week. The proposal aims to turn Europe into the first climate neutral continent by 2050. Any delays to this crucial objective can lead to life threatening consequences. View Article
IPE: PensionsEurope, Efama positive on Green Deal, but ESG data still an issue : PensionsEurope and Efama have reacted positively to a new climate change-driven growth strategy unveiled by the European Commission this week, although they said the success of the EU sustainable finance agenda required tackling issues to do with the availability and quality of environmental and other data on investee companies. View Article
POLITICO: EU fails to find unanimity on 2050 climate neutrality goal : EU leaders failed to find unanimity on the goal of making every country in the bloc climate-neutral by 2050, as Poland refused to sign up to the target. View Article
FRC announces its thematic reviews of corporate reporting and audit areas of focus for 2020/21 : The FRC’s Corporate Reporting Review team will supplement its routine reviews of corporate reporting with four thematic reviews. These reviews will identify scope for improvement, as well as areas of better practices, in a number of areas of stakeholder interest. The FRC’s Audit Quality Review team has also signalled its areas of focus for audit monitoring. View Article

Protecting Customers

FRC moves to strengthen auditor independence and ban conflicts of interest : To support the delivery of high-quality audit in the UK, the FRC has issued a major revision to its Ethical Standard and revised Auditing Standards.  View Article
ESMA calls for strengthened supervision on suspicious transaction reporting : The Report sees a significant increase in suspicious transaction and order reporting and finds that national supervisors can do more to ensure all financial participants play their part in combatting market abuse. View Article
ESMA publishes responses received to its consultation on the MAR review : ESMA published the responses it received by stakeholders on its consultation on the review of the Market Abuse Regulation (MAR). View Article
ESMA issues 2019 report on Accepted Market Practices under MAR : ESMA’s report provides an overview on the establishment and application of AMPs in the EU after MAR became applicable, including the AMPs established under the Market Abuse Directive that remained applicable afterwards. View Article

Fin Tech Regulation

ESBG: Expert group submits recommendations to EU Commission : An international group of experts, with the participation of Sparkassen-Finanzgruppe – the WSBI-ESBG member in Germany – has addressed the question of how banking regulation should deal with this and presented its recommendations to the European Commission. View Article
EC: Final report of the Expert Group on regulatory obstacles to financial innovation: recommendations on regulation, innovation and finance : The Expert Group on Regulatory Obstacles to Financial Innovation (ROFIEG) published its recommendations on how to create an accommodative framework for technology-enabled provision of financial services.  View Article
BIS: CPMI report sets out considerations for developers of wholesale digital tokens : A new report by the Committee on Payments and Market Infrastructures (CPMI) sets out a list of criteria for developers and market participants to consider when designing digital tokens for use in wholesale transactions. View Article
BIS: Designing a prudential treatment for crypto-assets : Basel Committee on Banking Supervision seeks the views of stakeholders on a range of issues related to the prudential regulatory treatment of crypto-assets. View Article
VoxEU: AI regulation and firm behaviour : This column examines the impact of actual and potential AI regulations on business managers through a randomised online survey experiment. It finds that exposure to information about regulation decreases managers’ reported intent to adopt AI technologies in their firm’s business processes. View Article

Friends' Standard Services

48th Brussels for Brunch Webinar December 2019 :  View Article
Video invitation to 158th Brussels for Breakfast : Brussels for Breakfast (158): A round-table discussion on EU regulatory affairs, with Graham Bishop (, Allie Renison (IoD) and TBC. To be held on Tuesday, 14th January, 2020, 8.30-10.00am. With support from the CISI. View Article

Economic Policies Impacting EU Finance


Christine Lagarde - Yahoo News


The New York Times: Christine Lagarde begins to chart a course at the ECB : New president of the ECB Christine Lagarde held her first news conference where she promised to consider more opinions in making policy, and she reported signs that the eurozone’s economic slowdown was abating. View Article
Commission proposes new tools to enforce Europe's rights in international trade : The Commission presented a legislative proposal that will allow the EU to enforce international trade rules in circumstances where the World Trade Organization (WTO) is no longer able to deliver binding dispute settlement decisions. View Article
European Council conclusions : The European Council adopted conclusions on climate change, the MFF, the Conference on the Future of Europe, EU relations with Africa, the WTO, Turkey and Albania. View Article
European Semester Autumn Package: Creating an economy that works for people and the planet : The von der Leyen Commission launched a new European Semester cycle, the first of its mandate. It presents an ambitious, rebooted growth strategy focused on promoting competitive sustainability to build an economy that works for people and the planet. View Article
EurActiv: China calls for opening free trade talks with the EU : Chinese foreign affairs minister Wang Yi called for the launch of free trade talks with the EU, in parallel with ongoing negotiations on an investment deal. View Article
ECB: Building bridges: central banking law in an interconnected world : The ECB Legal Conference produced reflections on the Court of Justice and EMU, Libra, the SSM, data sharing between authorities and the standard of review of ECB decisions, among other legal issues. View Article
BIS: Central banking in challenging times : The essay focuses on the threefold challenge central banks have been facing post-crisis - economic, intellectual and institutional. It pays special attention to central bank independence. View Article

Basic Enconomic Indicators

Euro area international trade in goods surplus €28.0 bn : The first estimate for euro area (EA19) exports of goods to the rest of the world in October 2019 was €217.9 billion, an increase of 4.1% compared with October 2018 (€209.3 bn).  View Article
Annual inflation up to 1.0% in the euro area : The euro area annual inflation rate was 1.0% in November 2019, up from 0.7% in October. A year earlier, the rate was 1.9%. European Union annual inflation was 1.3% in November 2019, up from 1.1% in October. A year earlier, the rate was 2.0%.  View Article
Graham Bishop #FBPE Graham Bishop #FBPE
Here's my video invitation to 158th Brussels for Breakfast, in which i suggest - and request - ideas for the next #B4B debate on January 14th 2020. With my best wishes for a happy Xmas!
Graham Bishop #FBPE retweeted
Replying to @politico
The House voted to impeach President Donald Trump, branding him as only the third president in U.S. history to face such a harsh punishment from Congress
Graham Bishop #FBPE retweeted
Michel Barnier Michel Barnier
“Our new relationship should be as close as possible. For the sake of all Europeans who stretched their lives across the Channel” Pres @vonderleyen @Europarl_EN The future EU-UK partnership will clearly be different. But the EU will never fall short on common ambition.
Graham Bishop #FBPE retweeted
Federal Trust Federal Trust
4/4 "Pessimism is premature. An effective Labour leader, working with the SNP and Liberal Democrats, (could) expose the damaging compromises Johnson will be forced to accept if he is to have any longer-term agreement on trade and security with the EU."
Graham Bishop #FBPE retweeted
Federal Trust Federal Trust
3/4 "The now inevitable British withdrawal from the EU in early 2020 creates, however, a new situation in which those who sought to prevent Brexit will need to choose between accommodation and resistance." @Brendandonn…
Graham Bishop #FBPE retweeted
Jennifer Rankin Jennifer Rankin
Ursula von der Leyen says Brexit timetable "extremely challenging" and "we will face a cliff edge situation" if no deal by 2020. She said no deal "will harm the UK more than us" as the EU will continue to benefit from single market, customs union and 700+ intl agreements.
Graham Bishop #FBPE retweeted
Sky News Sky News
No-deal is back on the table as PM plans to beef up his Brexit legislation to outlaw delays to the transition period beyond 2020
Graham Bishop #FBPE retweeted
Bloomberg Brexit Bloomberg Brexit
The U.K. government will introduce its Brexit bill to Parliament on December 20
Graham Bishop #FBPE retweeted
U.N. climate negotiations ended in disarray, exposing deep rifts among industrialized nations, fast-growing economies like China and India and the poorest countries
Graham Bishop #FBPE retweeted
Jennifer Rankin Jennifer Rankin
The Brexit choice to come, spelt out by Emmanuel Macron. "If Boris Johnson wants a very ambitious trade deal, there has to be very ambitious regulatory convergence. Be me guest.”…
Graham Bishop #FBPE retweeted
Fabian Zuleeg Fabian Zuleeg
Many UK commentators/politicians seem to believe that this domestic victory gives the UK more leverage in the phase 2 negotiations. It does not. EU27 won't change approach & it is still the UK that needs a phase 2 deal more
Graham Bishop #FBPE retweeted
Siraj Datoo Siraj Datoo
Jo Swinson started the campaign telling @SophyRidgeSky that she was a candidate to be Prime Minister. Now she's no longer even an MP
Graham Bishop #FBPE retweeted
Bloomberg Brexit Bloomberg Brexit
Jeremy Corbyn said he will stand down as leader of the U.K.’s opposition Labour Party after a comprehensive rejection of his bid to lead the country
Graham Bishop #FBPE retweeted
Bloomberg Brexit Bloomberg Brexit
BREAKING: Boris Johnson wins a decisive U.K. election with his promise to deliver Brexit, a vote marking the biggest political shifts in decades

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