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04 September 2008

This week in "Brussels"

Articles from 16 July 2008 - 04 September 2008

CRMPG III report on reform of systemic risks
Some of the world’s biggest banks are proposing reforms responding to the credit crisis. The proposals would limit the number of investors of complex financial products, and complements official oversight to contain systemic risks.  View Article

UK authorities consultation on banking ‘special resolution regime’
The consultation document sets out further detail on the specifics of the special resolution regime and includes draft clauses for key aspects of the regime, in particular those areas where there has been the most significant interest from stakeholders.  View Article

FSA consults on changes to the Disclosure and Transparency Rules
The FSA consults on a proposal that financial institutions in receipt of liquidity support from a central bank will have a legitimate interest in delaying the public disclosure of such support.  View Article

IIF Final Report on Market Best Practices
Mr Ackermann will today announce in Washington the publication of the Final Report on the key principles of conduct for best practices . The report contains recommendations on risk management, compensation policies, and liquidity risk issues.  View Article

SEC releases Roadmap to International Accounting Standards
The SEC approved a proposal of 2014 as the earliest date for the possible adoption of international accounting standards in the U.S.. The proposed Roadmap will be published for public comment soon and could lead to the use of IFRS by U.S. issuers.  View Article

Bernanke calls for increased focus on systemwide risks by regulators and supervisors
Ben Bernanke called for closer cooperation with other regulators to monitor the health of individual financial institutions. An increased focus on system-wide risks by regulators and supervisors is inevitable and desirable, he said.  View Article

Paulson on resolution regime in light of a changed financial landscape
We should consider ways to ensure that costs are imposed on creditors and equity holders, Secretary Henry Paulson said. Any commitment of government support should be an extraordinary event that requires the engagement of the Executive Branch.  View Article

FSA Japan: Deposit-taking institutions exposure to subprime-related products
The FSA published the exposures of Japanese deposit-taking institutions  to subprime-related products and securitized products based on the leading practices summarized in the FSF report.  View Article

FSA Japan - Newsletter July 2008
The July edition contains a featured article on the Financial Markets Strategy Team’s “Second Report”. Further topics include the exposure of Japanese deposit-taking institutions to subprime-related products and securitized products.  View Article

FSA Japan - basic policy and plan for financial inspections
The FSA intends to implement measures following the preamble of the recently revised Inspection Manual, and focus on priority inspection items selected in light of the conduct of inspections in the previous program year.  View Article

FSA Japan - Financial Markets Strategy Team issues second report
The second report tries to identify and assess the measures and policy responses taken to date, and points out the issues to which Japan should pay due attention with regard to future developments in the global financial markets.  View Article

FSA Japan - Newsletter June 2008
The June edition contains a featured article on the FSA “Progress Status of Initiative toward Better Regulation”. Further topics include an article on the FSA basic concept concerning financial experts.  View Article

FSA Japan: Financial Inspection Rating System – English version
The Financial Services Agency Japan published an English translation of the Financial Inspection Rating System for Deposit-taking Financial Institutions.   View Article

3L3 Committees call to focus on long term objectives
The Committees underline that the Commission should  focus on long term objectives and the tools available, rather than including concrete projects. Any need for reviewing the mandates on an annual basis should be avoided.  View Article

Commission nominates members of EGHC member
The 20 experts will help to identify barriers to the access to and exchange of credit data within the EU and to find solutions to overcome the identified obstacles.   View Article

BIS Quarterly Review - September 2008
Global financial markets adjusted to growing signs of a broad-based cyclical deterioration, the latest Review finds. Worries about the economic outlook and related uncertainties gained prominence, weighing on valuations across asset classes.  View Article

BIS consults on economic capital modelling
The consultation paper provides an overview of the range of practices in economic capital modelling at large banking organisations and discusses a range of issues and challenges surrounding economic capital models.  View Article

BIS survey on implementation of the compliance principles
The survey assesses the degree to which the high-level principles on the management of compliance risks in banks have been implemented  - nand are consistent  with the paper issued in April 2005.  View Article

Joint Forum final release of Credit Risk Transfer paper
The report finds that supervisors remain concerned about several aspects of the CRT market. They believe that the structured credit market is likely to survive, but will remain weak for a period of time.   View Article

ECB launches CCBM2 project
The Governing Council of the ECB launched the CCBM2 - Collateral Central Bank Management project.   View Article

BIS consults on transparency in payment messages
The Committee consults on its preliminary views on supervisory expectations relating to transparency in payment messages, particularly in anticipation of changes to technical standards for cross-border wire transfers.  View Article

Commission/ECB support launch of pan-European SEPA Direct Debit
The Commission and the ECB have encouraged the EPC to move ahead with the launch of the SEPA Direct Debit scheme and indicated to support the idea of a 'multilateral interchange fee' for cross border direct debits.   View Article

FSA consults on PSD Handbook changes
The consultation proposes Handbook changes that are required to implement aspects of the Payment Services Directive. The new Handbook and EG material will take effect on 1 November 2009.  View Article

Commission consults on potential refinements to CRD
The Commission consults on possible changes to the trading book capital requirements for 'incremental' risks. The proposal intends to broaden the scope of a capital requirement for 'incremental risks' in institutions' trading books.   View Article

Finance industry fights Commission plan to boost capital requirements
The joint paper criticizes several fundamental flaws of the Commission proposal and warns that it will increase costs and damage the competitiveness of Europe. However, Commissioner McCreevy is said to be very keen on the 10% rule.   View Article

Basel Committee consults on market risk framework
The Committee proposes improvements to the Basel II Framework concerning internal VaR models.   View Article

Basel Committee consults on guidelines for computing capital for incremental risk in the trading book
The guidelines support one of the key recommendations for strengthening prudential oversight set out in the FSF report presented to G7 Finance Ministers and Central Bank Governors in April 2008.  View Article

HM Treasury consults on investors’ rights protection
HM Treasury launched a consultation on extending the statutory regime on liability for fraudulent misstatement by issuers of securities.   View Article

ECB launches TARGET2-Securities project
The ECB launched the TARGET2-Securities. Almost all euro area CSDs are in favour of the continuation of the T2S initiative, and are prepared to enter into a legally binding contractual arrangement by the end of the first quarter of 2009.   View Article

Commission to postpone Communication on Private Placement
The Commission consultation and analysis provided no conclusive evidence on a number of issues regarding the appropriate limits of such a regime and, therefore, proposes investigation and research on the important unanswered questions.  View Article

Signatoires publish terms of reference for auditing compliance with Code of Conduct
The signatories of the European Code of Conduct for Clearing and Settlement for cash equities published the Terms of Reference for Auditing Compliance with the Code of Conduct.   View Article

Commission report on cross-border securities transactions
The Commission's Legal Certainty Group (LCG) issued a report calling for an improved and harmonised legal framework for holding and settlement of securities. The report also proposes to give issuers free choice between European CSDs.  View Article

ECB opinion on amending Settlement System directives
The ECB proposes some changes to the Commission draft text, in particular one on the protection of collateral from the effects of insolvency, and one on the notification of system operators and oversight.   View Article

ECON draft report on review of Settlement Systems
The Draft Report proposes few substantial to the Financial Collateral Directive, and some clarifications on the Settlement Finality Directive.   View Article

Commission consultation on Credit Rating Agencies
The two consultation documents relate to the conditions for the authorisation, operation and supervision of credit rating agencies, and propose policy options in order to tackle what is felt to be an excessive reliance on ratings in EU legislation.   View Article

IOSCO announces next steps on Credit Rating Agencies
IOSCO believes that, for the Code of Conduct to be effective, CRAs need to comply with the prescribed disclosures and regulators should take steps to determine the veracity of these disclosures.   View Article

CEIOPS report on Proxies
The report provides background information on the testing proposals for QIS4. It further explores the role of proxies, and discusses application and admissibility criteria in the valuation of technical provisions under Solvency II.  View Article

IMF: Sovereign Funds reach preliminary agreement on draft principles
The International Working Group of Sovereign Wealth Funds reached a preliminary agreement on a draft set of principles and practices for recommendation to their respective governments.   View Article

CESR publishe responses on UCITS consultation
CESR published the responses to its call for evidence on the UCITS asset management company passport. Answers range from postponing the decision of its introduction to new alternative approaches.  View Article

ALFI calls for complete analysis on Management Company Passport for UCITS
The advantages of introducing a Management Company Passport could be outweighed by significant potential costs and risks, ALFI states warning that “the global credibility of the UCITS ‘brand’ would suffer.”  View Article

CESR consults on risk management principles for UCITS
The paper proposes a framework for guidelines concerning risk management, providing principles and an outline of the key elements for a standard in the risk management process.   View Article

CESR consults on UCITS company passport
The Commission requested CESR to provide advice on the structure and principles which should guide potential future amendments to the Level 1 UCITS Directive and to indicate the fields that could be addressed through Level 2 implementing legislation.  View Article

OECD consults on draft guidelines on pension fund governance
New issues covered by the revised guidelines include the need for balanced representation of stakeholders in pension fund boards, greater expertise and knowledge among board members, and risk-based governance structures and mechanisms.  View Article

IOPS consults on draft guidelines for the supervisory assessment of Pension Funds
The draft guidelines, which focus mainly on prudential supervision, provide pension supervisors with general supervisory approaches for the conduct of the supervisory process.   View Article

IASB consults on convergence in EPS calculation
The IASB consults on proposals to simplify the calculation of earnings per share (EPS) and to eliminate differences between the methods required by IFRSs and US accounting standards to calculate EPS.   View Article

IASCF issues ED on improvements to IFRSs
The IASB has issued an Exposure Draft on Improvements to IFRSs as part of its annual improvements process. The ED contains 12 proposals for amendments to 8 Standards.  View Article

EFRAG draft comment on amendments to IAS 19: Employee Benefits
EFRAG has issued its draft comment letter in response to the Discussion Paper on Preliminary Views on Amendments to IAS 19 Employee Benefits.  View Article

IASC Foundation publishes IFRS Taxonomy 2008
The IASC Foundation today announced the release of the IFRS Taxonomy 2008, a complete translation of IFRSs into XBRL.   View Article

IASB amends IAS39 on eligible hedged items
The amendment to IAS 39 ‘Financial Instruments: Recognition and Measurement’ provides clarification on two issues how the existing principles underlying hedge accounting should be applied.   View Article

EFRAG concerns on IASB agenda and priorities
EFRAG is concerned that some of the approaches proposed in the paper to speed up MoU projects seem to place US views above the views of other jurisdictions, in particular in the Fair Value Measurement and Equity/Liability projects.  View Article

IASB: Trustees proposals on Constitution review
The proposals address a new Monitoring Group for the IASCF and the size and geographical composition of the IASB. Trustees expect to complete the first part of the Constitution Review in October, with the changes taking effect from 1 January 2009.  View Article

IASB: Trustees to issue constitutional proposals in due course
The proposals would establish a link between the organisation and a Monitoring Group comprising representatives of public authorities and international organisations. Trustees also propose expanding the IASB to 16 members.  View Article

Commission decision cuts red tape for audit firms from third countries
The decision ensures the proper implementation of Article 46 of the Statutory Audit Directive, which allows Member States to modify or not to apply the registration requirements for third country auditors.  View Article

EFRAG draft comment on ED on improved Conceptual Framework for Financial Reporting
EFRAG does still have concerns about aspects of the ED although it represents a significant improvement on the version that was set out in the earlier discussion paper.  View Article

EFRAG initial comments on revised IFRS 3 “Business Combinations” and the amended IAS 27 “Consolidated and Separate Financial Statements”
EFRAG requests comments on the revised IFRS 3 “Business Combinations” and the amended IAS 27 “Consolidated and Separate Financial Statements”.  View Article

EFRAG draft comment letter on an improved Conceptual Framework for Financial Reporting
EFRAG agrees that the revised Framework should address the notion of a ‘reporting entity’ and agrees with many other issues mentioned. However, it also calls for further in-depth studies on several issues.   View Article

EFRAG recommends adoption of amendments to IFRS 1 and IAS 27
EFRAG has completed its due process regarding the amendments to IFRS 1 and IAS 27 and recommends their adoption.   View Article

Graham Bishop's Overview - July 2008
Graham Bishop's Personal Overview :  At this time of year, the policy players in Europe’s financial services industry traditionally focus more attention on forthcoming holidays. But this year is rather different as the drive to legislate s  View Article

MLex: Deutsche Bank's acquisition of ABN's Dutch business banking units faces 2 Oct review deadline
The Commission is expected to set an initial Phase I merger review deadline of 2 October for Deutsche Bank's planned acquisition of ABN Amro's Dutch commercial banking operations from Fortis.   View Article

MLex: Visa's card fees under scrutiny as EC seeks answers from retailers
The Commission has sent out questionnaires to gather information on the payment card fees applied by Visa Europe. The questions focus on card usage, surcharging, commercial cards and retailers reaction.   View Article

© Graham Bishop

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