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29 April 2010

This week in "Brussels" + Podcast
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  Articles from 22 April 2010 - 29 April 2010

  Financial Services Policy

 
 
 
Statement by President Barroso on Greece: Final decision needs to be taken
Barosso stressed that all euro-area Member States are finalizing procedures that will allow them to provide financial support to Greece. The euro-area Member States, the Commission, the ECB and the IMF are all determined to guarantee the overall financial stability of the euro area.  View Article
 
Market Discipline on Eurozone Public Debt - amend SGP Regulation and CRD IV
Apply higher capital requirements and limit “large exposures” for banks lending to eurozone Member States that fail to implement Excessive Deficit Procedure recommendations by Council. Easily structured via Regulation and Directives without Treaty changes.   View Article
 
ECON committee discussed amendments on new ESAs
The EP is heading for a clash with national governments over reforms on financial market supervision. The new EU supervisory system is planning to be up and running by 1 January 2011. MEPs proposed that the new EBA should direct how national regulators supervise banks that present a systemic risk.  View Article
 
ECON committee: ECB Vice-President on Greek fiscal measures and Eurozone risks
Mr Papademos justified the progressive scaling back of the ECB's non-standard measures, which have been put in to place to deal with the worst effects of the financial crisis. The ECB also welcomed the tightening of the Stability and Growth Pact rules and the bolstering of economic surveillance   View Article
 
Barnier warned that time is running out to put in place the new ESAs
Some of the former fundamental assumptions about the world of finance were too simplistic and wrong, Barnier said and called for a new order in financial services.The EC will issue proposals on liquidity management and leverage ratios by the end of 2010.   View Article
 
IMF: Strategies needed to tackle huge government debt levels
Speaking at a conference on fiscal strategies after the crisis in Washington, IMF first Deputy Director Lipsky proposed a plan for fiscal consolidation based on stabilizing age-related spending as a share of GDP and raising additional revenues in an efficient and equitable manner.   View Article
 
IMF: More attention to the enforcement of rules needed
More effort is needed to look at the supervisory side, IMF Managing Director Dominique Strauss-Kahn said in Washington. “You may have the best possible regulation, but if it’s not enforced and you don’t have supervision it’s as if you did nothing”, he warned.  View Article
 
Kathimerini: Athens upbeat after aid talks with IMF chief
As officials from the Greek government and the IMF sought to send out reassuring signals about the immediate activation of a multibillion-euro rescue package for Greece, strong skepticism persisted in Germany and elsewhere about the prudence of dispensing aid without serious consideration.  View Article
 
CEA messages ahead of G20 Finance ministers' meeting
CEA emphasized that the business model of the insurance industry is fundamentally different from banking, which relies on short-term deposits or short-term debt to cover long-term lending. CEA called for the recognition of different financial services business models.   View Article
 
G20 recommitted to regulatory reforms
G20 members recommitted to developing by end-2010 internationally agreed rules to improve both the quantity and quality of bank capital and to discourage excessive leverage. The new rules will be phased in by end-2012 and shall be complemented by strong supervision.  View Article
 
Sobel: US and EU fully agree on tough and rigorous oversight regime for AIFMs
Sobel warned that there is no doubt about the establishment of such an oversight regime. However, this needs to be aligned with the principles of non-discrimination and a level playing field. He also reiterated the need for a comprehensive regulation of OTC derivatives markets.   View Article
 
SEC Walter criticises confusions on regulatory proposals of the OTC derivatives market
We do not need regulation that makes the regulatory system even more complicated and incoherent, the Commissioner criticised the Lincoln bill. Instead, all securities-related swaps should be regulated by the SEC and all commodities-related swaps should be regulated by the CFTC, Walter proposed.  View Article
 
The Hill: Senate starts debate on Wall Street reform bill on Thursday
On Wednesday Senate Republicans said they had reached a key agreement with the Democrats, paving the way for a debate to begin on a sweeping Wall Street reform bill. Strong disagreement still exists over the new consumer financial protection office.   View Article
 
NYT: Senate blocks debate on Financial Oversight Bill
The US Senate voted on Monday to block the bill from reaching the floor for debate. Republicans said the bill needs substantial changes and accused Democrats of rushing the overhaul of the financial regulatory system. However, both sides say they expect the overhaul eventually will be approved.  View Article
 
IIF criticized IMF proposals for ex-ante levy of financial institutions
The IIF sees no merit in the idea that any levy on the banking system should be paid into general revenue. In contrast, an ex-ante tax would contribute to moral hazard and weaken market discipline, and would make it even harder for financial firms to fail, it criticizes in a letter sent to the G20.  View Article
 

 
  Banking

 
 
 
CRD III: Consideration of amendments in the EP ECON committee
Most MEPs agreed that banks cannot have an unlimited delay for the implementation of the CRD III, nor a very broad grandfathering clause. Rapporteur Arlene McCarthy urged the committee to have a remuneration proposal in place as soon as possible.   View Article
 
FT: Differences persist over tighter regime on capital rules
The different positions of senior officials from G20 countries suggest that a final international agreement remains a challenge. The most important fault line runs between a bloc of countries that includes the US, the UK and Switzerland and another group that includes Germany, France and Japan.   View Article
 
IMF: Preventing institutions becoming too important to fail is essential
IMF’s John Lipsky reiterated that a tax on financial sector could help to tackle the issue, but international coordination is needed for best results. The time has come to design rules and resolution regimes to better address failed cross-border financial institutions, he underlined.  View Article
 
EFBS: European regulation of mortgage credit is not the right approach to facilitating cross-border offers
The EFBS study focuses on the question why visible differences have continued to exist between the EU residential property financing markets and whether the EU Commission would be able to improve the functioning of the markets by way of regulation.   View Article
 
CEBS principles for disclosures in times of stress - Lessons learnt from the financial crisis
The principles do not set any additional requirements; their aim is to encourage enhanced quality of disclosures without amending, duplicating or adding to existing disclosure requirements or recommendations such as IFRS, Pillar 3, listing rules or other regulations.  View Article
 

 
  Securities

 
 
 
Public hearing on OTC derivatives organized by the EP ECON committee
Most of the speakers advocated specific rules for the end users as the one size fits all approach may critically damage their business. EACT Raeburn said that if an end-user is using derivatives to mitigate risk and it does not pose systemic risk then they should be exempted.   View Article
 
Euro system starts work on ABS’ collateral framework
Following a public consultation the ECB Governing Council decided to proceed with the preparatory work for the establishment of loan-level information requirements. The work also addresses the technical implementation aspects and is expected to be completed by September 2010.   View Article
 
ECB guidelines on TARGET2-Securities
The Guidelines are binding for the Eurosystem national central banks, but do not create obligations on third parties. The T2S Guidelines include a list of decisions reserved for the Governing Council, the roles and responsibilities of the T2S Programme Board and the 4CB and their mutual relations.  View Article
 

 
  Insurance

 
 
 
CEA issued pensions briefing ahead of EC Green Paper expected in mid-2010
CEA outlined the main issues that need to be addressed by policymakers such as the recognition of the differences between “Pay-as-you-go” systems and funded pension systems or to encourage long-term funded pension savings through fiscal incentives.  View Article
 

 
  Asset Management

 
 
 
AIMA: G20’s call for a "consistent and coordinated" approach on AIFMD should be considered
AIMA called on EU policymakers to take note of the G20’s statement on AIFMD and to work more closely with the authorities in the jurisdictions where the overwhelming majority of hedge fund managers are located without establishing unnecessary barriers to free and open markets, and investor choice.  View Article
 

 
  Corporate Governance/Accounting

 
 
 
Trichet: Global governance is of the essence to improve decisively the resilience of the global financial system
Speaking at the Council on Foreign Relations in New York, Trichet stressed that both sides of the Atlantic have a very important responsibility in implementing effective global governance in many domains but in particular in prudential and accounting rules.  View Article
 
FT: Brussels to scrutinise role of auditors
The move by Brussels follows heavy criticism by Anton Valukas, the Lehman Brothers court examiner, of the part played by Ernst & Young. The EU process will start with the publication of a green paper in the autumn, which could pave the way for rules on the way audit firms are owned and governed.   View Article
 
IAASB proposes new standard to strengthen reporting on pro forma financial information in Prospectuses
The proposed standard deals with information - necessary in many forms of domestic and cross-border securities offerings- that illustrates the impact of an event or transaction on an issuer's financial information.   View Article
 
IASB proposes improvements to defined benefit pensions accounting (IAS 19)
The amendments would address deficiencies in IAS 19 by requiring entities to account immediately for all estimated changes in the cost of providing these benefits and also to disclose clearer information about the risks arising from defined benefit plans.   View Article
 
Gertrude Tumpel-Gugerell: ECB strongly opposes a full fair value approach
Convergence in international accounting standards should not come at the expense of high-quality accounting standards, she said and underlined her concern that FASB and IASB are still far from reaching a consensus on key accounting concepts.  View Article
 
IPSASB proposals on improvement the international publish sector accounting standards (ED 44)
The report includes proposed improvements to existing IPSASs to maintain alignment with IFRS. The proposed amendments are related to requirements for recognition, measurement, and disclosure and do not represent substantive revisions to the content of existing standards.  View Article
 

 
  Edited Minutes of key legislative Bodies

 
 
 
CRIS Committee working document on global governance, international monetary policy to tackle global imbalances
Thematic co-leader to the Rapporteur Kay Swinburne (UK/ECR) proposed several policies to be considered such as closer co-ordination of taxation policies globally throughout G20 to minimise tax arbitrage opportunities, and minimising tax incentives which favour debt financing over equity financing.  View Article
 

 
  Brief Opinions/Commentaries

 
 
 
Davies & Green: Banking on the future - The fall and rise of Central Banking
The book considers such current issues as the place of asset prices and credit growth in anti-inflation policy, the appropriate role for central banks in banking supervision, the ways in which central banks provide liquidity to markets or the efficiency and cost-effectiveness of central banks.  View Article
 
Bruegel: Europe needs a framework for debt crises
Bruegel director Jean Pisani-Ferry and Senior Fellow André Sapir argue that a European debt restructuring mechanism - on the lines of a sovereign debt restructuring mechanism, a suggestion that came up in the context of the Argentinean crisis - could be a realistic option.   View Article
 
Bruegel: Germany should share the blame for the Greek crisis
Bruegel Director Jean Pisani-Ferry and Senior Fellow Andre Sapir explain why Germany may have to shoulder part of the blame for the crisis in Greece by not addressing crisis management and only focusing on crisis prevention.   View Article
 

 
  Financial stability - policy analysis

 
 
 
ELEC’s paper on the creation of a common European bond market
A common European bond market would certainly deepen the Monetary Union. But the question is: is a common European bond market possible and feasible in the present circumstances? Opinions differ. A major obstacle seems to be the "no bail-out" clause that is a centerpiece of the Maastricht Treaty.  View Article
 

 

 


© Graham Bishop

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