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14 October 2010

This week in "Brussels"

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Articles from 07 October 2010 - 14 October 2010

Financial Services Policy

Trichet: Basel III is a cornerstone of the new regulatory system
Speaking at the Economic Club of New York, Trichet stressed that accounting, ratings and short-selling practices are all issues that need to be addressed in order to lessen the degree of procyclicality in the financial system.   View Article
3L3 Task Force published a report on Packaged Retail Investment Products
It is recognised that the PRIPs regime would be easier to enforce if regulator competences and powers were harmonised across the European Union, so that all the products are subject to equivalent regimes as regards their structure and their marketing, CEIOPS stressed.   View Article
CEA calls for EC tax proposals to differentiate between insurers and banks
The CEA urges the Commission to take full and fair account in its proposals and forthcoming impact assessment of the distinct insurance business model and of the positive role of insurers in the economy, both since and during the crisis.  View Article
IMF increasing focus on Global Systemic Stability
The IMF is closer to wrapping up a package of reforms that will make the IMF more representative and better able to tackle the economic problems facing a globalised and interconnected economy, IMF Director Dominique Strauss-Kahn said.  View Article
G30 urge policymakers to strengthen financial regulation and supervision
The G30 has released a report drawing policymakers' urgent attention to the need for strengthening system-wide regulation and supervision, in order to provide more robust macro-prudential frameworks that prevent another crisis and secure a stable financial system.   View Article


CRD III: Council adopts new rules on capital requirements and remuneration policies in the banking sector
The directive introduces a requirement that the remuneration policies of financial institutions be subject to supervisory oversight. As a result, supervisory authorities will from now on have to monitor the implications of remuneration policies for the risk management of financial institutions.  View Article
BCBS issues the final version of paper on supervisory colleges
The Basel Committee on Banking Supervision has issued a set of principles which aims to promote and strengthen the operation of supervisory colleges.The paper supplements guidance issued by the Basel Committee on cross-border cooperation and information-sharing for both home and host supervisors.  View Article
CEBS published draft guidelines on remuneration
CEBS’ guidelines recommend that at least 50 per cent of any variable remuneration should consist of equity-linked instruments and institutions should apply the same chosen ratio between instruments and cash for their total variable remuneration to both the upfront and deferred portion.   View Article
European banks concerned that Commission proposals on taxation are inappropriate
The EBF is concerned over the multiplication of measures that place increasing burdens on the financial sector. Proposals continue to flourish, despite the absence of a comprehensive impact assessment and show very little concern for the international competitiveness of Europe’s banks.   View Article
Eurosystem publishes oversight frameworks for credit transfer and direct debit schemes
The Eurosystem will apply these frameworks to the SEPA credit transfer scheme and the SEPA direct debit scheme. Individual national central banks may also decide to apply these standards for the oversight of other national (non-SEPA) payment instruments.  View Article


The Council adopted simplified rules on prospectuses for securities
The directive is aimed at enhancing the level of investor protection and ensuring that information provided about the issuers of securities is sufficient in order to allow investors to analyse prospects and risks, particularly in the light of lessons learned during the financial crisis.  View Article
CESR completes its review of MiFID by issuing advice on OTC derivatives trading, post-trade transparency standards and client categorisation
This covers CESR advice on standardisation and organised platform trading of over-the-counter derivatives, post-trade transparency standards and client categorisation as well as the remaining responses to the Commission’s request for additional information in relation to the previous MiFID review.  View Article
CEBS published its guidelines on the management of operational risk in market-related activities
In particular, this paper aims to highlight supervisory expectations relating to specific arrangements, procedures, mechanisms and systems in trading areas that could prevent or mitigate operational risk events.   View Article
CESR published guidance to report transactions on OTC derivative instruments
CESR decided that only transactions on securities derivatives whose underlying instrument is traded on a regulated market should be exchanged. This excludes indices or baskets of securities, apart from derivatives where all the underlying securities are issued by the same entity.  View Article
ISDA comments related to segregation of collateral for uncleared swaps
ISDA made its members’ views known on segregation of collateral related to uncleared swaps, in light of the rulemaking that the Commission will undertake to implement Section 724 of the Dodd-Frank Wall Street Reform and Consumer Protection Act in its open letter to CFTC.  View Article


CEIOPS has launched a European-wide data request to support Commission in finalising the Solvency II implementing measures
The aim is to provide recommendations based on robust, empirical data for the calibration of the premium and reserve risk factors in the non-life underwriting risk module of the SCR standard formula tested in QIS5.  View Article

Asset Management

IMA makes proposals for a proportionate approach to remuneration
Responding to the FSA consultation on remuneration, Director of Wholesale at the IMA said that “the FSA’s consultation failed to reflect adequately the current practices of our members and the nature of the asset management industry.”  View Article

Corporate Governance/Accounting

Commissioner Barnier: Audit firms did not see this crisis coming while they were in the front line of financial reporting
Barnier stressed that the concentration in the audit market is problematic and he recalled that the sector is currently an oligopoly. He presented that 70% of the European market is in the hands of the Big Four.   View Article
The European Commission consults on possible improvements to the European audit market
The Green Paper aims to draw the lessons from the crisis with respect to the external audit of companies. In particular, whether audits provide the right information to all financial participants or not.  View Article
IASB: Trustees appoint Hans Hoogervorst to succeed Sir David Tweedie
Mr Hoogervorst will succeed Sir David Tweedie on his retirement as chairman of the IASB at the end of June 2011. He is currently chairman of the Netherlands Authority for the Financial Markets (AFM), the Dutch securities and market regulator.   View Article
Commissioner Barnier welcomed the appointment of Hans Hoogervorst as future Chairman of the IASB
Barnier stressed that he looks forward to the US SEC’s forthcoming decision on the use of IFRS by US domestic issuers, due in 2011. IFRS are the only credible option if policymakers want to create a single accounting framework for listed companies worldwide.   View Article
ICAEW on the future IASB leaders: They have an unenviable to-do list
It is critical that Mr Hoogervorst engage with key IFRS stakeholders across the world at an early stage to understand their views and concerns. He and his fellow Board members also have to work very closely with regulators.  View Article
ACCA wants to see better regulation instead of more regulation in the auditing sector
ACCA agrees that the auditor role needs to evolve to take into account more forward-looking information, and for the auditor to give opinions not just on the financial statements, but also on areas such as the company's internal controls and corporate governance arrangements.  View Article
EFRAG's DCL on the Interpretations Committee's rejection decision on IAS 36 Impairment of Assets - calculation of value in use
EFRAG recommends the Interpretations Committee remove the reference to ‘rarely be appropriate’ from the wording for rejection. EFRAG also recommends amending the wording for rejection to clarify that a DDM can be used, provided this is consistent with the requirements under IAS 36.  View Article
Global Filing Manual for eXtensible Business Reporting Language published by Interoperable Taxonomy Architecture
The manual contains a set of rules which provide guidance on the preparation, filing and validation of XBRL filings created using the IFRS Taxonomy, the EDINET (Electronic Disclosure for Investors’ NETwork) Taxonomy or the U.S. GAAP Taxonomy.   View Article
EFRAG's Comment Letter on the IFRS Interpretations Committee in relation to put options written over non-controlling interests
EFRAG comments on the IFRS Interpretations Committee's tentative decision not to proceed with the agenda item on a request for guidance on the subsequent measurement of put options written over non-controlling interests in the consolidated financial statements of a parent entity.  View Article

Brief Opinions/Commentaries

Wolfgang Münchau: The eurozone is wrong to look for the exit
In his Financial Times column, Münchau argues that this is the wrong time to exit for the ECB. From a point of view of international monetary co-operation, it is not a good idea right now for the ECB and the Fed to run in opposite directions.   View Article

Financial Stability - Policy Analysis

Eurofound published report 'Financial services: challenges and prospects'
The report warns that if European policymakers, big financial institutions and social partners cannot agree on the full extent of reform, then Europe's financial services sector runs the risk of being plunged back into the unsustainable situation of chasing short-term profit with high risks.   View Article
AFME director: Regulation balancing capital requirements and enhanced supervision
Peter Beales, managing director and head of policy at AFME, speaks at the annual Enterprise Risk Management Thought Leadership Series conference in London.   View Article

Best of Media

Il Sole: Italian small banks wrung out by Basel III
The amount of the capital necessary in order to align the benefits coming from the capitalisation and the liquidity to the requirements of the reform (particularly level of 6% for the Tier I capital) should be around 80 million: 50 million for the medium banks and 30 million for the small banks.  View Article
Corriere della Sera: Italy needs growth and good budget according to Draghi
"Finance reform is not a finished business. There has been progress, but there is a lot left to do,“ said Draghi, underlining how important it is to put the agreed rules into practice.   View Article

© Graham Bishop

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