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Today is Election Day for Eurogroup President so we highlight the three candidates, and the European Parliamentary Research Service’s `brief’ about the role. But the first topic on the new President’s table will be the question of Europe’s “Hamiltonian moment” – or not! So the Fondation Robert Schuman has reminded us of the famous dinner with Jefferson in 1790 where US `debt assumption' matters were settled ... and the European Commission reminded us with their Summer Forecast why the EU needs to settle EU matters in 2020.
Europe’s payments industry may be at a crossroads as a group of banks launch the European Payment Initiative (EPI) while SUERF debates the likelihood of Central Bank Digital Money, rather than Libra. The deadline for Brexit extension passed without comment from the UK Government…but the EU noticed that the UK is already setting out to “diverge”, so goodbye “equivalence”.
Graham Bishop
Articles from 3 July to 9 July
General Financial Policy
EURACTIV: Election day: Calviño and Donohoe neck and neck in Eurogroup race : Eurozone finance ministers are split on whether to pick their Spanish colleague Nadia Calviño or Ireland’s Paschal Donohoe as the next Eurogroup president during a videoconference on Thursday (9 July), EU sources and diplomats told EURACTIV.com. View Article
POLITICO: Luxembourg’s Gramegna banks on credentials, recovery pitch in Eurogroup race : Candidate wants the eurozone to drive the EU’s economic recovery. View Article
The role (and accountability) of the President of the Eurogroup : This note provides an overview of the role of the President of the Eurogroup, the procedures for his/her appointment, as well as proposals on a “full time position”...also addresses the mandate and working methods of the Eurogroup... the debate around the transparency of Eurogroup proceedings. View Article
Robert Schuman Fondation: Dinner at Jefferson's (or how the USA created the federal public debt) : As negotiations on the European Union's future economic recovery plan continue, references are being made to Europe's "Hamiltonian moment". Giraud returns to the 1790 agreement between Hamilton and Jefferson on public borrowing... transforming the United States into a true political federation. View Article
Read-out of the meeting between Presidents of the EU institutions von der Leyen, Michel and Sassoli and Chancellor Merkel on the recovery pa : President von der Leyen received the Presidents of the European Parliament, the Council and the European Council to take stock of progress in the discussions regarding the next Multiannual Financial Framework and NextGenerationEU, and prepare the intensive interinstitutional negotiations. View Article
POLITICO: Parliament confirms EU banking nominee despite gender concerns : Lawmakers overturn committee and back François-Louis Michaud for European Banking Authority post. View Article
Equity: the key to unlocking a sustainable economic recovery : Accountancy Europe, CFA Institute, the European Bank for Reconstruction and Development (EBRD) and the Federation of European Stock Exchanges (FESE) have issued key recommendations for the Commission and EU member states to harness the potential of capital market integration in post-COVID recovery. View Article
Banking Union
European Payments Initiative: A promising step forward for payments in Europe : The European Association of Cooperative Banks, the European Savings and Retail Banking Group and the European Banking Federation welcome the decision taken today by a group of 16 major European banks to take their European Payments Initiative (EPI) to the next phase. View Article
European payments: The European Commission welcomes the initiative by a group of 16 banks to launch a European payments initiative (EPI) : The European Commission welcomes the agreement reached today by 16 major Eurozone banks from Belgium, France, Germany, Spain and the Netherlands towards the creation a unified payment solution for consumers and merchants across Europe. View Article
SUERF: Retail Central Bank Digital Currencies: means of payment vs store of value : The accelerated decrease in the use of cash driven by the Covid-19 pandemic has strengthened the possibility of central banks issuing some pragmatic form of retail CBDC as an improved electronic version of cash... designing CBDCs in such a way that they to reserve financial intermediation. View Article
SUERF: Europe’s answer to Libra – potential and prerequisites of a programmable euro : The programmable euro is an important innovation to secure Europe’s long-term competitiveness in the global economy. Europe needs to act swiftly and decisively since Asian and US initiatives such as the digital Renminbi or Libra threaten to pre-empt European projects. View Article
Anti-Money Laundering: Commission decides to refer Austria, Belgium and the Netherlands to the Court of Justice of the EU for failing to ful : The European Commission has today referred Austria, Belgium and the Netherlands to the Court of Justice of the European Union, with a request for financial sanctions, for failing to fully implement the 4th Anti-Money Laundering Directive (AMLD4) into their national law. View Article
EFAMA Response to the ESAs draft guidelines on “The Risk Factors Guidelines’’ : We believe it is important to ensure that a proportionate approach is taken in the review of such guidelines and that effort and resources are only expanded where they have maximum real impact in preventing ML/TF. View Article
ECB publishes guideline on definition of default for banks directly supervised by national supervisors : Guideline in line with ECB regulation for banks directly supervised by ECB The definition ensures consistency and level playing field among banks across euro area View Article
FT: Banks need to prepare now for Covid-19 losses later : European lenders should not be tempted to delay as they did after the 2008 crisis View Article
ESBG: Future changes foreseen for EU-wide stress test : ESBG welcomes the EBA initiative to revise and re-centre the EU-wide Stress Testing framework... discussion paper that tackles future changes to the EU-wide stress test. ESBG said it hopes that any changes to the framework will result in increased transparency and simplicity of the overall process. View Article
Capital Markets Union
Insurance Europe: Insurers respond to EC consultations on Solvency II and IDD sustainability amendments : The European insurance industry supports the Commission’s sustainability objectives and generally welcomes the Commission’s amendments to integrate sustainability into insurers’ prudential framework and sales processes. View Article
IAIS Executive Committee confirms continued focus on addressing the impact of Covid-19 on the global insurance sector while advancing key IA : The Covid-19 pandemic has underscored the importance of a resilient insurance sector...Insurers and supervisors remain vigilant to risks and vulnerabilities stemming from the pandemic, with a focus on ensuring that the sector remains financially and operationally resilient. View Article
Insurance Europe: Insurers call for improvements to EU rules to support aims of Capital Markets Union : Insurance Europe welcomes the HLF’s recommendation that, to encourage investment – particularly in SMEs – improvements to Solvency II are needed. While Solvency II is strongly supported by the industry, it currently creates unnecessary barriers to the provision of long-term investments and products. View Article
ICSA, EFAMA & MFA Call for Global Principles to Address Escalating Market Data Costs : They call for the implementation of internationally recognized principles to address excessively high market data fees and unfair licensing provisions. View Article
AFME: Understanding the Liquidity Landscape in European Equity Markets : This paper aims to contribute to this evidence-based analysis and set out AFME’s understanding of the liquidity landscape in the European equity markets. This analysis was produced using data provided by Big xyt, an independent analytics firm. View Article
AFME paper answers uncertainties around OTC market data : A diverse and competitive market structure has ensured European equity markets remain robust, according to a study published today (7 July) by the Association for Financial Markets in Europe (AFME). View Article
Environmental, Social, Governance (ESG)
FRC principles for operational separation of audit practices : The FRC has announced its principles for operational separation of the audit practices of the Big Four firms. View Article
ECB's Lagarde interview with Financial Times : What has it been like for you, and how do you think you've done?"It's been a very steep learning curve, no question about that..." View Article
Better Finance Feedback to the European Commission Consultation on obligations for investment firms to advise clients on social and environment : BETTER FINANCE welcomes the introduction of requirements for firms providing investment advice and portfolio management to ask clients about their non-financial objectives and preferences. View Article
IPE: Scope claims ‘disruption’ with new corporate ESG impact model : Credit rating agency Scope has developed a methodology for scoring companies’ environmental, social and governance (ESG) impacts that it claims represents an “innovative and disruptive approach”. View Article
EFRAG's endorsement advice on the extension of the temporary exemption from Applying IFRS 9 (Amendments to IFRS 4) : EFRAG has submitted its endorsement advice relating to the extension of the temporary exemption from applying IFRS 9 Financial Instruments (Amendments to IFRS 4 Insurance Contracts) ('the Amendments') for use in the European Union and European Economic Area to the European Commission. View Article
IPE: EC delivers EFRAG EU non-financial reporting standards mandate : The European Commission has officially mandated the European Financial Reporting Advisory Group (EFRAG) to develop recommendations about potential EU non-financial reporting standards, a move it flagged earlier this year. View Article
Eumedion Foundation: Position paper calling for a global standard-setter for non-financial reporting : The Eumedion Foundation based in the Netherlands has published a position paper 'Towards a global, investor focused standard setter for corporate non-financial reporting' calling on the IFRS Foundation to establish such a standard-setter. View Article
EBF: Industry Steering Group Webinar on SRD II: Encouraging long-term shareholder engagement & increasing trust in EU capital markets : The EBF and other members of the SRD II Industry Steering Group hold a dedicated webinar on 6 July 2020 to discuss the opportunities and challenges of SRD II, from a business, legal and operational perspective and present the market standards prepared and validated by the Steering Group experts. View Article
Protecting Customers
EIOPA clarifies supervisory expectations on product oversight and governance requirements in the context of COVID-19 : To ensure the continuing fair treatment of customers in light of COVID-19, insurance manufacturers are asked to: Identify their products affected as a result of COVID-19 Assess possible unfair treatment of customers for these products Consider proportionate remedial measures View Article
Fin Tech Regulation
Accountancy Europe: EC’s consultation on a new digital finance strategy for Europe/FinTech action plan : Accountancy Europe has responded to the European Commission’s consultation on a new digital finance strategy for Europe/FinTech action plan. View Article
EC digital finance strategy must address barriers to innovation in insurance, while ensuring a level regulatory playing field : EU rules for insurance should enable innovation and allow consumers, established companies and new market entrants to benefit from digitalisation... But..regulatory barriers exist to providing insurance to consumers online, such as requirements for documents to be provided on paper. View Article
Economic Policies Impacting EU Finance
Summer 2020 Economic Forecast: An even deeper recession with wider divergences : The EU economy will experience a deep recession this year due to the coronavirus pandemic, despite the swift and comprehensive policy response at both EU and national levels. View Article
Brexit
FT: Hardline Brexit stance threatens City market access, UK warned : Luxembourg minister says sovereignty ‘in contradiction with enhanced equivalence’ View Article
FT: Brexit shutout looms for UK funds as market access talks falter : Missed deadline prompts warnings of disruption as fund groups already grapple with the pandemic View Article
Federal Trust: In a mad Brexit world, “no deal” makes some kind of sense : The government has been surprisingly successful in avoiding public discussion of the disappearance on 30th June of its option to ask for an extension of the EU transition period beyond the end of the year. Other controversies have predictably diverted attention from Brexit in recent days. View Article
EPC - Liddle: Heading for disaster : The current UK-EU negotiations are heading for disaster: the probability of a ‘bare-bones’ trade deal, with some limited add-ons, is looking strong. The future relationship between the two will most probably be blighted by tensions over continual trade disputes. View Article
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