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10 April 2008

This week in "Brussels"

BIS: Wellink on recent market developments and the role of Basel II

10 April 2008

The Basel I framework has failed to deliver its objectives, Nout Wellink said and underlined that Basel II is an important next step to enhance bank resiliency. The current financial market turmoil underscores the importa­nce of strongly capitalised banking systems and highlights the shortcomings of the Basel I capital regime. View

IASB and ASBJ meeting on convergence in accounting standards

10 April 2008

The IASB and the Japanese ASBJ held a joint meeting on convergence in accounting standards. The boards confirmed that the convergence project to eliminate major differences between Japanese GAAP and current IFRSs by the end of 2008 is progressing in line with the project plan. View

FT: LCH.Clearnet criticises post-trade overhaul

10 April 2008

LCH.Clearnet criticised efforts to implement a landmark overhaul of European post-trade services, saying the process had raised “totally unsurmountable” problems. Europe’s clearing houses and stock exchanges are attempting to implement a “code of conduct” that Brussels brokered with exchanges, clearers and settlement systems in 2006. View

FT: Accountancy rules broken ‘irretrievably’

10 April 2008

Rules regarding how banks account for off-balance sheet interests are “irretrievably broken”, a senior group of international rule-makers has warned. The rules, which have allowed trillions in assets to escape close scrutiny, have come under attack in the wake of the credit crisis as banks have been forced to disclose huge losses on these holdings. View

German associations oppose European regulation on mortgage credits

09 April 2008

A group of German associations strongly opposes legislation, especially in the form of a directive to harmonise mortgage credit. Product regulation would reduce diversity and put the German fixed interest rate culture at risk, the associations argue. The conclusions of London Economics do not stand up to critical analysis. View

MLex: EC looks into anti-trust concerns in bank card standard-setting

09 April 2008

The European Commission is looking into standards-setting for payments cards by banks and banking associations after Eurocommerce, the association of Europe's retailers and wholesalers, lodged a fresh complaint challenging the way the payments industry co-operates in agreeing technical requirements. View

Treasury competitiveness study on changing nature and consequences of financial restatements

09 April 2008

Secretary Paulson announced the completion of a study, part of his effort to encourage U.S. capital markets competitiveness. "The information in this study should complement the work underway at the SEC and the FASB to improve financial reporting for investors”, Paulson said.  The study provides an in-depth looks at the soaring number of financial re-statements in the years before and after the Sarbanes-Oxley Act. View

IIF Interim Report calls for Codes of Conduct for banking practices

09 April 2008

“We are considering the establishment of a Capital Markets Monitoring Group of approximately 10 to 20 highly respected experts and eminent leaders of finance to alert the industry to actual and potential vulnerabilities and market developments that pose systemic risks,” Mr Ackermann suggests. The IIF will recommend a suite of best practices to be embraced voluntarily, perhaps in the context of a “code of conduct” to reform banking practices. View

McCreevy: Solvency II project too important to fail

09 April 2008

“Member States and the Parliament must show that they are able to agree on adequate prudential standards to protect policy holders”, Commissioner McCreevy said. “In particular, we need to agree on group supervision and the group support regime.” View

OECD report on SWFs and recipient countries

09 April 2008

OECD countries are committed to keeping their investment frontiers open to SWFs as long as these funds invest for commercial, not political ends, OECD Secretary-General Angel Gurría said in a letter to G7 Finance Ministers. The report finds that existing OECD investment instruments are well suited to develop guidance for countries receiving investments from SWFs. View

CEA doubts extending Solvency II to Pension Funds

09 April 2008

“The current application of the IORP Directive has resulted in variations in national solvency standards, which has in turn lead to regulatory arbitrage between Member States”, the CEA states. This is in marked contrast to the Solvency II proposal, which is intended to bring about consistent and harmonized supervision across the EU. View

Banks express severe doubts over IASB proposals for full fair value

09 April 2008

“Rather than concentrating on a full fair value model, the IASB should reduce complexity by simplifying the existing measurement requirements for financial instruments”, Sally Scutt, CEO of the International Banking Federation said. Full fair value measurement of financial instruments would overstate the extent to which instruments are held for trading or managed on a fair value basis within the business. View

WSJ: Darling urges G7 Ministers to adopt FSF proposals

08 April 2008

The U.K. government will consider the “full range” of options to ease financial market strains, Alistair Darling said. In a letter sent Monday to U.S. Treasury Secretary Henry Paulson and other G7 finance ministers, Darling urged “rapid implementation” of proposals from the Financial Stability Forum to tackle the credit crisis. View

Herald Tribune: FSA says tough conditions here for some time

08 April 2008

It is too soon to call the bottom of the current cycle, and financial market conditions are set to remain strained for some time, the Financial Services Authority warned an industry conference on Tuesday. "I think we can expect uncertain and turbulent market conditions to continue for the foreseeable future," said Callum McCarthy, chairman of the FSA. View

BBA warns against legislating in haste

08 April 2008

The banking industry needs more time and more talks to ensure swingeing reforms to regulation do not have unintended consequences on the economy, the BBA said. "We are extremely concerned about the aggressive legislative timetable the Government is proposing to follow, particularly on the complex Special Resolution Regime and bank-specific insolvency arrangements".  View

IMF warns against broadening credit crisis

08 April 2008

The widening and deepening fallout from the U.S. sub-prime mortgage crisis could have profound financial system and macro-economic implications, according to the IMF's latest Global Financial Stability Report. At present, the issuance of most structured credit products is at a standstill and many banks are coping with losses and involuntary balance expansions. View

IASC Trustees to launch constitution review

08 April 2008

The Trustees of the International Accounting Standards Committee Foundation agreed on the process for the second five-yearly Constitution Review and completed proposals for immediate consultation on the creation of a Monitoring Group and the size and composition of the IASB. View

EFRAG draft comment on D23 - Distributions of Non-cash Assets to Owners

08 April 2008

EFRAG agrees that existing IFRS lacks guidance on the accounting for distributions of non-cash assets to owners, but has several significant concerns regarding the proposals. D23 addresses, among others, how an entity should measure an obligation to distribute non-cash assets to its owners in their capacity as owners. View

FSA Japan report on misunderstandings about internal control report system

08 April 2008

The Internal Control Report System, which is applied from fiscal years beginning on or after April 1, 2008, aims to strike a balance between efficiency and effectiveness so as to avoid imposing excessive cost burdens on relevant companies. View

CEPS report recommends Lamfalussy approach for UCITS

08 April 2008

The ongoing UCITS review is too limited in scope, and it should therefore be expanded beyond facilitating market integration to include a fundamental review of UCITS product regulation, the CEPS report on UCITS argues. It calls on the Commission to shape a regulatory level playing field for economically similar products, stimulating a convergence of regulatory regimes across sectors. View

CEIOPS fact finding survey on existing solvency rules for IORP

08 April 2008

CEIOPS published a report on technical provisions and security mechanisms in the European occupational pensions sector which focuses on IORPs providing defined benefit schemes, whether exclusively or in combination with defined contribution schemes, as covered by the IORP Directive. The survey provides a factual basis for a broad consultation on solvency issues for occupational pensions. View

CEBS/CEIOPS advice on definition of capital instruments for financial conglomerates

08 April 2008

CEBS and CEIOPS published their recommendations to address the consequences of the differences in sectoral rules on the calculation of own funds of financial conglomerates, as approved by the Interim Working Committee on Financial Conglomerates. The recommendations focus on the four main differences that were gathered during the analysis. View

ECON meeting 7-8 April

08 April 2008

ECON Committee held a public hearing on hedge funds and private equity, and had exchanges of views with Eurogroup Chair Jean-Claude Juncker and CEBS chair Kerstin af Jochnick on the current financial turmoil, and with Gerrit Zalm, Chairman of the Trustees of the IASCF on the IASB constitutional review. View

JURI meeting 8 April

08 April 2008

JURI Committee discussed the draft report on the transparency of institutional investors of Klaus-Heiner Lehne, the working document of Piia-Noora Kauppi on the report on hedge funds and private equity, as well as the draft opinion on the Solvency II Directive prepared by Sharon Bowles. View

CESR advice on Canadian and South Korean GAAPs

07 April 2008

CESR consults on its recommendation that  the Commission accept Canadian and Korean GAAP according to article 4 of the Commission Regulation on the mechanism for determining equivalence of third country GAAP. View

Council adopted Consumer Credit Directive

07 April 2008

The Council approved the amendment voted by the European Parliament on the Consumer Credit Directive. The Directive will cover personal loans of between EUR 200 and 75 000 repayable after more than a month. It will not apply to mortgages or to deferred debit cards. View

CEBS proposes limit-based “back-stop” regime on large exposures regimes

07 April 2008

CEBS believes that large single name exposures can lead to traumatic losses due to “unforeseen events”. As market failure is not adequately addressed by the Basel’s three pillars, CEBS concludes that a limit-based “back-stop” regime is the most appropriate regulatory tool and proposes to improve several of the features of the current regime. View

CEBS proposals for common definition on Tier1 hybrids

07 April 2008

CEBS proposes that hybrid capital instruments should only be eligible as Tier 1 capital if they meet a number of requirements. CEBS also believes that regulatory capital requirements should be met without undue reliance on hybrid instruments and puts forward two options for the limitation of Tier 1 hybrids. View

CEIOPS review on implementation of the IORP Directive

07 April 2008

CEIOPS requests the Commission to provide urgent clarification at a European level of some issues of the IORP Directive. The Committee issued its review of key aspects of the implementation which provides a factual basis for a limited review of the IORP Directive scheduled for 2008. View

Informal ECOFIN meeting 4-5 April

05 April 2008

The Informal Ecofin meeting agreed on further steps to develop financial stability and supervisory arrangements. On financial stability, a new MoU was signed to strengthen co-operation mechanisms around cross-border groups. Ministers and Governors also discussed the progress achieved on clearing and settlement and the way forward. View

IIF calls for co-ordinated policy responses on financial turmoil

04 April 2008

“Policymakers need to adopt a comprehensive but targeted set of policies”, Charles Dallara, Managing Director of the IIF said. “The difficulties facing the global economy have become critical and calls for decisive leadership now by national authorities, central bankers and regulators, as well as by financial services firms”. View

ECMI Policy Brief on UCITS-MiFID Nexus

04 April 2008

There remains considerable confusion as to how exactly the MiFID and UCITS directives will interact in the long run. This uncertainty reflects the growing pains of a regulatory transformation that represents no less than a tectonic shift from intense and prescriptive product regulation to a more flexible, principles-based regulation of management functions. View

AMF: Amendments to Collective Investment Schemes

04 April 2008

The AMF amended Book IV of the AMF General Regulation: standardisation of conduct business rules for fund marketing. The main amendment consists of a new provision aimed at standardising the way in which investment services providers market units and shares in collective investment schemes. View

ECB TARGET2-Securities Newsletter No.5.

04 April 2008

The ECB released it TARGET2-Securities Newsletter No 5. View

Commission White Paper on compensating consumer

03 April 2008

The Commission published a White Paper suggesting a new model for achieving compensation for consumers and businesses who are the victims of anti-trust violations. The White Paper presents recommendations that cover collective redress, disclosure of evidence and the effect of final decisions of competition authorities in subsequent damages actions. View

CEPS Policy Brief: MiFID’s impact on the Fund Management Industry

03 April 2008

There remains considerable confusion as to how exactly the MiFID and UCITS directives will interact in the long run. This confusion can be traced to apparently contradictory at first sight, or in the least, ambiguous wording in the MiFID as to how its provisions relate to collective investment schemes. View



16 April 2008

IBC Legal Conferences' EU and UK Financial Services Forum

The EU and UK Financial Services Forum will assess the key developments mid-way through implementation of the Commissions White Paper on Financial Services. Sir Christopher Bellamy QC from Linklaters LLP in London is chairing the event. Joining him is a panel of experts from the Commission, banks, the Office of Fair Trading, the London Stock Exchange and leading law firms.

More information and booking


6 May 2008

3L3 open hearing on information on payer accompanying a funds transfer

CEIOPS, CESR, and CEBS will hold an open hearing on common understanding of the information on the payer accompanying a funds transfer. The hearing will take place at CEBS’ office in London.


14-15 May 2008

40th ICMA AGM and Conference

The Annual General Meeting and Conference of ICMA will take place at the Hilton Vienna Stadtpark. Among the participants are Jean Claude Trichet, President of the ECB, Mag. Wilhelm Molterer, Finance Minister of Austria; Yves Mersch, President of the Central Bank of Luxembourg, Eugene Rotberg Former Vice President and Treasurer, The World Bank; Louis de Montpellier, Deputy General Manager, BIS.

Further information


15-16 May 2008

Brussels Economic Forum

Forum will include sessions on growth and adjustment in the euro area, the euro and global financial markets, euro-area governance, and the medium-term challenges for Economic and Monetary Union. Online registration is open until 26 April 2008.

Online registration, draft programme


17-18 June 2008

FESE Convention

The 12th FESE Convention in Stockholm will focus on the most topical market and policy developments affecting the exchange industry and financial services institutions. Issues include the latest developments in integration of the EU-US financial services markets, a special focus on MiFID implementation, clearing and settlement of securities, financial stability in global capital markets, and trading and risk management in global derivatives markets.

Programme, registration


15 July 2008

Commission Public Hearing on "substitute" retail investment products


© Graham Bishop

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