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09 April 2010

This week in "Brussels" + Podcast

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Financial Services Policy Banking Securities
Insurance Asset Management Corporate Governance/Accounting
Brief Opinions/Commentaries Financial stability - policy analysis About this email

  Articles from 04 April 2010 - 09 April 2010

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  Financial Services Policy

Barnier: City of London is as an asset to the European financial sector but must be properly governed
He highlighted that financial market self-regulation did not work – addressing representatives of the banking sector at the London Stock Exchange. Barnier believes the solution is appropriate and efficient regulation and that banks must be solid and well-governed.  View Article
European Commission work programme for 2010
The Commission has agreed a list of 34 strategic priorities that will be implemented before the end of the year which includes derivatives legislation as well as a communication on options for bank resolution funds.  View Article
Trichet on the Greek crisis: the ECB was not against the IMF involvement in itself, but against the involvement of the IMF acting alone
In an interview with an Italian newspaper, Trichet said that Italy is not in the same situation as Greece. He called for the full implementation of the Treaty and the Stability and Growth Pact as it is the way to achieve stronger governance in the future and avoid any similar crises.  View Article
European Liberal Leader warns that Greek recovery is undermined by too high interest rates
Verhofstadt doubts the effectiveness of the special financial mechanism agreed to bolster Greece's ability to pay off its public debts. He believes Greece should have been offered a single loan from the European Commission at preferential interest rates.  View Article
Commission publishes an analysis of the main innovative financing options
The report presents several options discussed by Member States to ensure that the financial sector contributes to the costs of the current and potential future crises. For example, it considers the introduction of new taxes on leverage or risk taking by financial intermediaries.   View Article
SWIFT: MEPs want to limit bank data transfers to USA
The EP Civil Liberties Committee discussed the negotiating mandate adopted by the European Commission on 24 March for a new agreement on bank data exchanges with the United States to combat terrorism. MEPs called for bulk transfers of personal data to the USA to be avoided.  View Article
SEC proposes rules to increase investor protection in asset-backed securities
The proposed rules seek to better align the interests of issuers and investors by creating a retention or "skin in the game" requirement for certain public offerings of ABS. “The rules proposed by the SEC stem from lessons learned during the financial crisis”, Chairman Mary L. Schapiro said.  View Article


Summary of CEBS public hearing on draft revised guidelines on stress testing
Some attendees requested clarification regarding the role of CEBS guidelines especially on the new liquidity regulatory regime, given the regulatory framework outlined in the recent Basel publication and EC consultation on CRD IV.   View Article
AFME/BBA/ISDA respond to CEBS guidelines on the management of concentration risk
The industry agrees with the importance of concentration risk measurement and management within an effective risk management framework. However, the legal status of the future EBA is uncertain and respondents have concerns that CEBS guidelines will become binding technical standards.  View Article
AFME/BBA/ISDA respond to CEBS guidelines on stress testing
They believe the dialogue within a firm presented by the guidelines will support strategic planning and capital management. Their response also reflects the strong view that stress testing should be seen as an enabler for further regulatory discussions along a “comply or explain” basis.  View Article
CEBS consults on its guidelines on capital adequacy of cross border groups
These guidelines facilitate a common understanding within colleges of the results of assessments of material risks and control factors, the ICAAP processes and methodologies, as well as compliance with various minimum requirements of the CRD performed by national supervisors.   View Article


EBF responds to CESR’s consultation on the extension of shareholding notifications
EBF agrees that the secret building of voting rights in a company must not be tolerated; so there is a need for an EU-harmonization of the Transparency Directive’s disclosure requirements. However, EBF has concerns about disclosure thresholds and exemptions.   View Article
IOSCO publishes disclosure principles for public offerings and listings of asset backed securities
These outline the information that should be published for a publicly offered or listed ABS. The disclosure principles include the parties responsible for the document; static pool information; risk factors and certain derivative instruments.  View Article
CESR consults on micro-structural issues of the European equity markets for the MiFID review
The consultation may provide important information to CESR on key aspects for this year’s MiFID review. CESR seeks information on high frequency trading, sponsored access, co-location services, fee structures, tick size regimes and indications of interest.   View Article
European Banking Federation identifies central questions for MiFID review
The position paper identifies key areas such as the need for action on post-trade data. “The fragmentation of data is a natural consequence of the welcome competition that MiFID has introduced, but it is now time to find viable solutions,” EBF Secretary General Ravoet said.  View Article
CESR reviews options and discretions of the Market Abuse Directive – recommends extensions
CESR’s review shows some divergence in the application of the MAD regime, but a greater level of divergence for MTFs. CESR recommends further work on the extension of the MAD regime to MTFs, once the Commission has addressed the issue in the MAD review.  View Article


CEIOPS publishes final advice for L2 implementing measures on Solvency II
This final set of advice covers calibration of the MCR and of underwriting risks in Non-Life and Health insurance. CEIOPS underlines the importance of harmonized European-wide calibration and recognizes that this topic warrants further work on behalf of CEIOPS and stakeholders.   View Article
CEIOPS’ 2010 report on the functioning of Colleges
The report provides clear evidence of improvement in cooperation between supervisory authorities. For example, 43% of the Colleges have designed a concrete and precise work plan to coordinate supervisory work of the different members of the College.  View Article

  Asset Management

FT: Brussels reassures US on financial regulation
Commissioner Barnier has written to Tim Geithner, the US Treasury secretary, to assure him that new rules for the hedge fund and private equity industries will not shut foreign funds out of EU financial markets.  View Article
FT: Geithner urges EU fund rules rethink
Geithner wrote to the finance ministers of Britian, Germany, France and Spain, that he understood that a draft EU law "would discriminate against third country funds and fund managers by denying them the opportunity to access the EU single market via a passport."  View Article

  Corporate Governance/Accounting

FSA’s corporate governance agenda – boards need better understanding of the firm’s risk appetite
FSA Managing Director Sally Dewar highlighted, at the City corporate governance and remuneration Summit, that the FSA’s objective on corporate governance is to make regulation more effective and reduce the likelihood of a future crisis.  View Article

  Brief Opinions/Commentaries

Bruegel: International asymmetries reduction to recover from the crisis
Bruegel Director Jean Pisani-Ferry questions how growth will be rebalanced from deficit countries - the traditional drivers of demand - to surplus countries that should boost domestic demand and the accompanying shift in relative competitiveness on account of this role reversal.   View Article

  Financial stability - policy analysis

Wolfgang Münchau on why Greece will default
He argues that Greece will default; although not this year. The Greek government has demonstrated that it can still borrow at a rate of about 6 per cent but if the maths are done on the public debt dynamics it would be hard to arrive at any other scenario than an eventual default.   View Article



© Graham Bishop

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