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09 October 2008

This week in "Brussels"

Articles from 02 October 2008 - 09 October 2008

McCreevy - Rasmussen and Lehne reports do not automatically herald new EU legislation
It would take some persuading to convince me that we should legislate for leverage ceilings per se on private equity companies, McCreevy said.   View Article

IMF World Economic Outlook predicts major global slowdown
Many advanced economies are close to or moving into recession, the IMF says and called for strong and co-ordinated actions to avoid worse-case scenarios.  View Article

Barroso - High Level Group to work on cross-border supervision
Current debates in Council on Solvency II show the resistance any attempt at improving cross-border supervision, Barroso complained. What we have proposed in Solvency II and in the CRD is the strict minimum we need, he underlined.   View Article

Steinbrück outlines future financial-market rules
The German finance minister calls an international consensus about a ban on certain detrimental short-selling practices. He also recommends retention of up to 20% in the case of securitizations.  View Article

Central Banks announce reductions in interest rates
Worlds leading central banks announced reductions in policy interest rates. The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability.  View Article

IMF Global Financial Stability Report calls for collective action
Declared losses on U.S. loans and securitized assets are likely to increase further to about $1.4 trillion, the report states and calls for a collective commitment by authorities to address the challenges effectively.  View Article

UK announces financial support to banking industry
The package will make available Tier 1 capital in appropriate form to “eligible institutions”, and will make available a Government guarantee to assist in refinancing maturing, wholesale funding obligations as they fall due.   View Article

Barroso calls for co-ordinated action
“I am urging all governments of the European Union to co-ordinate their action”, Barroso said acknowledging that there cannot be uniform responses. “But if we act on the basis of the same principles our responses will be converging"  View Article

EU leader’s statement on stability of financial system
The European Heads of State and Government declare that each of them will take whatever measures are necessary to ensure the stability of the financial system.  View Article

Germany guarantees all private savings accounts
Germany will guarantee all private savings accounts. The announcement was made after an emergency meeting with the central bank and financial regulator on the possible Hypo Real Estate rescue plan which collapsed shortly after being agreed.  View Article

Council to agree on a ‘co-ordinated response on European level’ for supervision
To enhance the effectiveness of supervision of the financial sector in Europe more convergence and harmonisation in the implementation of rules and a strengthening of supervision of cross border groups is required, a draft paper states.  View Article

Council to review executive pay
National authorities have a role to play in helping to define an appropriate regulatory framework and in encouraging good practices and voluntary self regulation, a draft paper says.   View Article

IMF: Financial crisis likely to worsen economic downturn
The current financial market meltdown being witnessed in the United States and other advanced economies will likely lead to longer and deeper economic downturns in some of these countries, according to the IMF.  View Article

IIF calls for more and coordinated policy action
Systemic, internationally coordinated responses by the authorities are essential at this stage to stabilize financial markets, requiring large if temporary use of government funds, the IIF states and underlines the need for regulatory reform.  View Article

Cox calls for immediate legislative action on credit default swaps
The regulatory black hole for credit default swaps is one of the most significant issues we are confronting in the current credit crisis, Cox said and called on the Congress to provide for regulatory oversight.  View Article

Bernanke – Fed needs to consider whether current policy remains appropriate
The Fed “will need to consider whether the current stance of policy remains appropriate”, Bernanke said and announced that “continued efforts to stabilize the financial markets are essential”.  View Article

Fed plans to buy commercial papers
The U.S. Federal Reserve announced the creation of the Commercial Paper Funding Facility and said it would begin buying the short-term debt many companies use to fund their day-to-day operations.   View Article

US approved bail-out package
The US authorities last week approved a $700 billion bank bailout in an attempt to stem the crisis. The new version will raise federal deposit insurance limits and will introduce a package of tax proposals.  View Article

Banks criticise proposed interbank lending restrictions in CRD
The European banking community rejects the Commission proposal to limit interbank exposures to 25 % of own funds. This affects adversely the scope and cost of banks’ credit activities in future, EBF states.  View Article

CESR supervisory briefings on MiFID
CESR issued three supervisory briefings on best execution, conflicts of interest, and inducements, summarising the key elements of the rules and explaining the associated objectives and outcomes.  View Article

CME Group and Citadel to launch CDS Trading Platform
CME Group and Citadel Investment Group announced the launch of the first electronic trading platform that is fully integrated with a central counterparty clearing facility for Credit Default Swaps.  View Article

CESR consults on MAD Level 3 – third set of guidance
CESR consults on the guidance relating to stabilisation and buy-back programmes. The forthcoming feedback statement will also include the answers to the first consultation on requirements for insider lists and suspicious transaction reports.   View Article

Nyse Euronext launches pan-european MTF with support from EuroCCP
NYSE Euronext announced it has appointed EuroCCP as clearer from day one of the launch of its MTF. The MTF is scheduled to be launched in November this year.  View Article

IOSCO consults on regulatory standards for Funds of Hedge Funds
The consultation aims at funds of hedge funds’ managers to address regulatory issues of investor protection in light of the increased involvement of retail investors.  View Article

IASB to finish work on reclassification by next week
The Trustees of the IASC Foundation support the approach to eliminate any differences in how IFRS and US GAAP address the issue of reclassification of financial instruments. The IASB intends to complete this work next week.  View Article

IASB announces next steps in response to credit crisis
The IASB will work on the consistency of fair value measurement guidance between the IFRS and US GAAP, and will review the influence of the US Emergency Economic Stabilization Act.  View Article

CESR consults on its advice on Indian GAAP
CESR concludes that the Indian GAAP can be determined as equivalent. However, ICAI noted that it might make minor modifications to IFRSs to reflect "Indian conditions".  View Article

CESR statement on fair value measurement
The Statement will form the basis for the requested contribution by CESR to the ECOFIN Council and should help improving issuers practices regarding measurement and related disclosures of financial instruments in illiquid markets.  View Article

IAASB audit alert on fair value accounting estimates
The IAASB issued an audit practice alert which highlights areas within the ISAs that are particularly relevant in the audit of fair value accounting estimates in times of market uncertainty.   View Article

IAASB issues revised ISAs
The revised ISA 200 codifies the principles underpinning the interpretation of standards and sets out how the objectives, requirements and guidance in all ISAs are to be understood, IAASB Chairman Kellas said.   View Article

ECOFIN meeting 7 October
Ministers discussed the co-ordinated EU response to the economic slowdown, and aspects on financial stability and financial supervision. ECOFIN also examined the remuneration of company managers, but could not find agreement on the Solvency II Directive.  View Article

ECON meeting 6-7 October
ECON Committee held an exchange of views with Commissioner Neelie Kroes on the temporary extension of state aid rules, discussed the UCITS directive and voted on the Solvency II report.  View Article

JURI meeting 7 October
JURI Committee voted on the Kauppi report on the publication and translation obligations of certain types of companies. It also held a first exchange of views on the draft Opinion on UCITS, prepared by Jean-Paul Gauzès.   View Article

Plenary Meeting 8-9 October
Palirament voted ton the report on future structure of supervision in Europe. In a debate with the Commission and the Council MEPs called on the EU for coordinated action to tackle the financial market crisis.  View Article

© Graham Bishop

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