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18 November 2014

104th Brussels for Breakfast

Organised by the CSFI and hosted by the British Bankers Association - with Prof Rosa Lastra (Queen Mary University of London) and David Harley (Burston Marsteller) as fellow speakers.

ESAs write to ECON: Budget requests were cut back yet the number of tasks for the ESAs continue to rise. The cuts will “severely undermine ESAs’ capacity to deliver” – strong comments ahead of a tsunami of detail.

SSM operational from 4 November: the magnitude of the pooling of political sovereignty implied by this change is now beginning to sink in to financial specialists - but the UK’s body politic has no idea about it. The complexities of how it will interact with ECB’s monetary policy responsibilities remain to be worked out in practice but SSM chair Daniele Nouy was quite clear about the opportunity to “build a culture of supervision that is truly European”

The ECB AQR/stress test and the EBA stress test results:despite the media hype, European bank shares continue to trade in a narrow range – as they have for the past year. No surprise in aggregate to the owners of bank shares! This probably reflected their purchase of €54 billion of equity and €39 billion of Co-Co bonds during 2014. Nonetheless, the AQR marked up non-performing loans by €136 billion to €879 billion.

Systemic Banks face a TLAC of 16-20%: the G20 seems to have rubber-stamped the FSB proposals for a further massive increase in the capital of too-big-to-fail banks.  What are the implications for Capital Market Union?

Commissioner Hill “Over 400 delegated and implementing acts yet to be adopted”: B4Bexpects lively debates for some time to come… but it is deeply disturbing that `the Devil’ will get into some of this.

© Graham Bishop

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