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08 May 2014

This week in "Brussels"

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Articles from 01 May 2014 - 08 May 2014


ECB: Report on progress in the operational implementation of the SSM Regulation
In their second Quarterly Report to the European Parliament, the EU Council and the European Commission on progress in implementing the Regulation on the Single Supervisory Mechanism, the ECB covers the three months between 4 February and 3 May 2014.  View Article
EBA publishes risk dashboard for EU banking sector
The EBA published the first risk dashboard for 2014 summarising the main risks and vulnerabilities in the banking sector in the EU, based on the evolution of Key Risk Indicators (KRI) from 55 banks across the EU in the fourth quarter of 2013.   View Article
EBA consults on treatment of equity exposures under IRB approach
The EBA launched a consultation on draft RTS to specify the treatment of equity exposures under the internal ratings-based (IRB) approach. These RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in the EU.  View Article
FSB launches phase 2 of its Data Gaps initiative
The FSB aims to implement a common data template to collect key granular data from global systemically important banks (G-SIBs) about their assets and liabilities to provide the authorities with a framework for assessing the interlinkages and concentration of large banks in different sectors.  View Article
Reuters: Regulators lack data to probe shadow banking sector
Shining a light on the murky $70 trillion world of "shadow banking" is proving tricky for regulators handicapped by too little data and under pressure to boost economic growth, and this means risks may be escaping proper scrutiny.  View Article
EPC Blog: Evolution of the SEPA credit transfer and SEPA Direct Debit Schemes
Jean-Yves Jacquelin, Chair of the EPC SEPA Payment Schemes Working Group, writes that facilitating the transition of market participants to harmonised SEPA payment schemes and technical standards requires allowing for a degree of flexibility. This blog provides an overview of variations possible.  View Article
ESM reaches target level of €80 billion in paid-in capital
The European Stability Mechanism has now reached its target level of €80 billion in paid-in capital, as ESM Members transferred the final tranche of €15.7 billion. The payments were carried out in five tranches, starting in October 2012 when the ESM was inaugurated.  View Article
BoE: 'Taking uncertainty seriously - Simplicity versus complexity in financial regulation'
​Distinguishing between risk and uncertainty, this Financial Stability Paper draws on the psychological literature on heuristics to consider whether and when simpler approaches may outperform more complex methods for modelling and regulating the financial system.   View Article
Gov.UK: Review of enforcement decision-making at the financial services regulators
The review, which begins with a call for evidence, will report to the Chancellor in the autumn and be laid in Parliament. It seeks views on whether current arrangements and processes support the fair and effective use of enforcement powers.  View Article


Commission adopts report on feasibility of network of smaller CRAs
The Commission adopted a report on the feasibility of a network of smaller credit rating agencies (CRAs) in the EU. It assesses how the establishment of such a network could contribute to the strengthening of smaller CRAs, facilitating their growth into competitive market players.  View Article
ESMA approves EuroRating as a credit rating agency
ESMA approved the registration of EuroRating Sp. z o.o., based in Poland, as a credit rating agency (CRA) under Article 16 of the CRA Regulation. The registration takes effect from 7 May 2014.   View Article
Bloomberg News: Draghi's ABS plan seen helping banks, not business
Mario Draghi’s plan to spur growth by getting the ECB to buy asset-backed securities and persuade lenders to sell more of the bonds is being met with scepticism by the biggest money managers in Europe.   View Article
Waters: European derivatives reporting continues to cause headaches
While moving previously bilateral over-the-counter (OTC) derivatives onto electronic execution platforms has been a focus for both European and US regulators, the advent of reporting trades in the European Union has brought its own set of challenges.  View Article
The Trade: ESMA confirms MiFID consultation due in one month
Proposed regulatory technical standards for MiFID II are due to be published in a weighty consultation due at the end of May.  View Article
ESMA/Maijoor: 'The reform of financial markets: halfway there'
ESMA's Chair, Steven Maijoor, spoke on the three main challenges he sees in the current phase of regulatory reform: Commitment to financial reform, its implementation and adequate supervision.  View Article
Financial News: ESMA chair calls for funding revamp
ESMA's chairman, Steven Maijoor, called for an overhaul to the watchdog's "twisted and inappropriate funding system", including greater use of market-based fees and less reliance on contributions from national regulators.  View Article
IFR: CDS fails to attract European real money
European real-money managers remain reluctant to use derivatives to take a view on corporate credit despite a charm offensive from the capital-constrained dealer community and dwindling liquidity in secondary bond markets.  View Article

Insurance EIOPA tests insurers' resilience to sovereign stress
Experts say insurance company balance sheets will be hard hit in stress tests launched by European regulators in April. The inclusion of a sovereign debt crisis in the stress scenarios will have a particular impact.  View Article PRA internal model demands excessive, say insurers
The UK regulator has raised concerns about how internal model firms are looking at credit, longevity and market risk. Insurers complain that the demands being made are excessive.  View Article
InsuranceEurope: EFRAG comment letter on ESMA [draft] guidelines on alternative performance measures
Insurance Europe in general agrees with ESMA’s identification of the investors’ need to have clearly understandable information about issuers’ financial performance. It should always be clear what alternative performance measures (APMs) are used and why.   View Article

Asset Management

MarketsMedia: EU regulators to focus on asset management
Sharon Bowles, chair of the outgoing committee on economic and monetary affairs in the European Parliament, said the systemic risk from asset managers will be a heavy focus for regulators.  View Article
IPE: The mission for pensions reform
The European Commission took up the task of updating the IORP I Directive, publishing its legislative agenda before submitting it to the European trialogue. The Commission highlighted the need for this overhaul, IORP II, on the basis of the changes within the EU in the past 11 years.  View Article
IPE: The case for a European Pensions Union
The strengthening of European financial supervision raises questions about the sovereignty of national governments and the desirability of transferring powers to 'Brussels'. Pascal Borsjé and Hans Van Meerten argue that the pension issue does indeed require a European approach.  View Article

Corporate Governance/Accounting

IASB: Charter of mutual co-operation with accounting standard-setting community
The IASB published an updated Charter establishing key principles of co-operation between the IASB and national standard-setters and other accounting standard-setting bodies, represented by the International Forum of Accounting Standard Setters (IFASS).  View Article
IASB/Mackintosh: 'The importance and challenges of establishing standards for global finance'
Ian Mackintosh, Vice-Chairman of the IASB, sets out the importance to global capital markets of a common language for financial reporting, as well as the challenges associated with achieving this goal. He summarises those challenges as the three S’s of Sovereignty, Structure and Standardisation.  View Article
IASB: Amendments to IFRS 11 Joint Arrangements
The IASB published amendments to IFRS 11 Joint Arrangements, addressing the accounting for interests in joint ventures and joint operations.  View Article


De Gucht: What we need to make TTIP work
European Commissioner for Trade, Karel De Gucht, says the EU needs to make the Transatlantic Trade and Investment Partnership work on a balanced playing field.  View Article

European Council/Parliament

EU Council adopts BRRD
The EU Council has confirmed that it has adopted the Bank Recovery and Resolution Directive in the form published on 28 April 2014. This follows the adoption of the BRRD by the EU Parliament on 15 April 2014. It will enter into force once published in the OJ.  View Article
Eurozone divided over FTT deal
Ten participating Member States have reiterated their commitment to the FTT and laid down their roadmap for its implementation at this week's ECOFIN meeting. Details are, however, still undecided. (Includes comments by EBF, PensionsEurope, AFME,  View Article

Graham Bishop’s Articles and Speeches

European Integration Monitor - April 2014
The driving forces of politics, finance, economics and budgets are a powerful cocktail that will intensify in the years ahead.   View Article
Financial World: Security in numbers (Graham Bishop article)
Europe seems ready to bring back securitisation, however carefully controlled so that it is 'good' securitisation rather than the output of 'quants' whose moral compass seemed to be stuck on one setting: personal self-enrichment.  View Article

© Graham Bishop

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