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22 December 2010

This week in "Brussels"

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Financial Services Policy Banking Securities
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Articles from 16 December 2010 - 22 December 2010

Financial Services Policy

EU Summit conclusions: Agreement on crisis mechanism reached
EU leaders agreed on a limited amendment to the Treaty on the establishment of a future permanent mechanism to safeguard the financial stability of the euro area as a whole. This amendment should enter into force on 1 January 2013.   View Article
EU and EFSF funding plans to provide financial assistance for Ireland
In 2011 the EU will, under auspices of the EFSM, raise up to €17.6 billion and in 2012 up to €4.9 billion. Based on these amounts, subject to revision and Ireland’s requirements, the EU intends to launch in 2011 four to five benchmark bonds aiming at €3 to €5 billion for each transaction.  View Article
ECB opinion on Irish emergency stabilisation of credit institutions
The ECB has expressed alarm that Ireland’s bank rescue plans could endanger assets put up as collateral in its liquidity-providing operations.  View Article
ECB: European Systemic Risk Board established
As foreseen in the legislation, the Chair of the ESRB is the President of the ECB, Mr Jean-Claude Trichet. Mr Mervyn King, Governor of the Bank of England, was elected as first Vice-Chair of the ESRB by the members of the General Council of the ECB.   View Article
IMA provides its outlook for 2011
Commenting on the outlook for the year ahead, Richard Saunders, Chief Executive of the IMA said: “The investment management industry is facing a number of unknowns in 2011. The continuing regulatory response to the financial crisis has thrown many balls in the air.”  View Article


SEPA: Commission sets deadline for pan-European payments system
The system will reduce the costs of payments, increase competition and make cross-border payments as easy as domestic ones. The Commission's proposal now passes to the European Parliament and the Member States for consideration.  View Article
Association of German Banks: Private banks call for a sense of proportion when fixing end dates for migration to SEPA
Businesses and consumers are making little use of the new SEPA instruments. "Not even ten per cent of credit transfers in the Euro Area are made as SEPA credit transfers at the moment," said Hans-Joachim Massenberger, Deputy General Manager of the Association.   View Article
The Basel Committee issued a consultative paper on the capitalisation of bank exposures to central counterparties
The Committee's proposals relate to the capitalisation of bank exposures to a central counterparty and, in particular, those related to the capitalisation of default fund exposures.   View Article
Association of German Banks welcomes adoption of Basel III: private banks can meet standards
Michael Kemmer, the Association's General Manager, stressed that the rules should be seen both in a national and a global context so that German banks were not overburdened and the supply of credit in the economy remained intact.   View Article
IIF published preliminary analysis on Basel III
The IIF Regulatory Affairs Department has undertaken a quick analysis of the final standards published by the Basel Committee on Banking Supervision on capital and liquidity standards.  View Article
FSA revised its remuneration code
FSA published an updated Remuneration Code to take into account changes required by the Capital Requirements Directive III.   View Article
Nicolas Véron - European bank stress tests: third time lucky?
Véron talks about European bank stress tests and a few keys to success ahead of the upcoming tests of February 2011.   View Article
MAG release Final Report on Macroeconomic Impact Assessment of Stronger Regulations
The Joint IMF's Financial Stability Board (FSB) and the BIS's Basel Committee for Banking Supervision (BCBS) Macroeconomic Assessment Group (MAG) has released the final report which looks at the net economic impact of the stronger regulatory requirements, once implementation is complete.  View Article
BCBS issues Basel III rules text and results of quantitative impact study
The Basel Committee on Banking Supervision has issued the Basel III text rules presenting the details of the global regulatory standards on capital adequacy and liquidity. It also published the results of its comprehensive quantitative impact study (QIS).  View Article
Commission temporarily clears support for Anglo Irish Bank, Irish Nationwide Building Society and Allied Irish Bank
The Commission has authorised under EU state aid rules emergency measures for three Irish banks. For Anglo Irish Bank, the Commission has approved a recapitalisation of up to €4.946 billion and a guarantee covering certain off-balance sheet transactions.   View Article


ECON committee: Consideration on draft report on short selling and certain aspects of credit default swaps
Rapporteur Pascal Canfin noted that the marking of short sales was the only way to monitor flows and was therefore complementary to the notification of positions at the end of the trading day.  View Article
Belgian Presidency progress report on EMIR
On mandatory clearing, the progress report states that the Council is debating whether outstanding derivative contracts will also be subject to a mandatory clearing obligation.  View Article
CESR issues a Feedback Statement on Transaction reporting on OTC derivatives and extension of the scope of transaction reporting obligations
This Feedback Statement summarises the responses that CESR received to its Consultation Paper on Transaction reporting on OTC derivatives and extension of the scope of transaction reporting obligations and sets out CESR’s feedback on those responses.  View Article
CESR publishes technical advice to the European Commission in the context of the MiFID review-standardisation and organised platform trading
In relation to the promotion of an efficient and sound derivatives market, CESR considers that the current situation is unsatisfactory and proposes that steps should be taken to increase the proportion of OTC derivatives being standardised by asset class.  View Article
CEA: OTC derivatives regulation must reflect risk profiles
The CEA is also concerned with ensuring that insurers are not deterred from using hedging techniques by a one-size-fits-all regulation that is insufficiently tailored to long-term investors.   View Article
CEBS and CEIOPS published recommendations for supervisory colleges of financial conglomerates
These recommendations include, among others, the setting up, for every financial conglomerate, of a platform for discussing Financial Conglomerates Directive issues within the existing college structure  View Article
FT: Derivatives clearing creates new battleground
Pushing derivatives into clearing houses is an important part of reforms initiated by the Group of 20 leading nations and now being implemented to help safeguard the system against another Lehman Brothers-style default.  View Article
Institutional Investor: Europe eyes looser OTC derivatives rules than U.S.
The European Commission’s draft regulation on over-the-counter derivatives and market infrastructure, issued in September, has been broadly welcomed by market participants, but the reaction has been muted because many of the crucial details have yet to be settled.  View Article

Asset Management

CEPS report on third country Rules for Alternative Investments
The author concludes that while the rules on alternative investments have gained in flexibility, regulatory certainty and efficiency have suffered.  View Article
IOPS published toolkit for risk-based pensions supervision
The toolkit assists pension supervisors in identifying potential risks faced by pension plans or funds and assessing the financial and operational factors in place to minimise and mitigate those risks.  View Article
CESR issues guidelines for selection and presentation of performance scenarios in the Key Investor Information document for structured UCITS
The guidelines cover the factors to be taken into account when choosing the scenarios, such as the features of the formula (e.g. a knock-out feature or a guarantee with a conditional floor) and on the link between the market conditions and the outcome for the investor.  View Article

Corporate Governance/Accounting

FRC priorities and funding proposals
The FRC published its priorities and funding proposals for 2011-12. The FRC’s work in the coming year will focus on the key ingredients of corporate reporting, governance and audit to ensure they better serve the needs of investors and the public interest.  View Article
IASB: narrow amendments to IFRS 1
The IASB issued two narrow amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards. The amendments confirm proposals that were published as separate exposure drafts for public comment in August and September.  View Article
IASB amended IAS 12 income taxes
The IASB has issued amendments to IAS 12 income taxes. The amendments set out in Deferred Tax: Recovery of Underlying Assets result from proposals published for public comment in an exposure draft in September.  View Article
November – December 2010 summary of EFRAG´s meetings
The December 2010 edition of the EFRAG Update summarises the discussions held at the recent EFRAG TEG meetings.   View Article
EFRAG commented on the IASBs ED on leases
EFRAG published its final comment letter on the IFRS's Exposure Draft Leases. The draft proposes a comprehensive model for recognition and measurement for all lease transactions by lessors and lessees.   View Article
FEE debated stakeholders’ expectations from statutory audit
FEE organised a seminar on stakeholders’ expectations from statutory audit on the occasion of its General Assembly. The accountancy profession welcomes this constructive dialogue with high-level representatives and sees it as an essential step in continuing to enhance audit value.  View Article

Financial Services Month in Brussels - Report

December 2010 Financial Services Month in Brussels
This Treaty revision was formulated as a deft constitutional measure to sidestep the need for an Inter-Governmental Conference and a referendum in Ireland.   View Article

Financial Stability - Policy Analysis

FMLC published paper on new approach to financial market regulation
The paper addresses the division of the FSA’s power, functions and rules, and the need for cooperation between the Prudential Regulation Authority and the Consumer Protection and Markets Authority.  View Article

Best of Media

El País: Spain urged to be tougher with pension reform
Spain should make tougher pension and labour reforms to revive economic growth and ease the debt load that is putting it at the heart of Europe's debt crisis, the OECD said in a report.  View Article

© Graham Bishop

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