Follow Us

Follow us on Twitter  Follow us on LinkedIn

04 November 2015

Deepening EMU – Round-up of Key Events – October 2015

Brexit and Brexin campaigns were launched, and British PM Cameron geared up EU reform talks. The ECON updated EU rules on online payments, and BCBS' Ingves said that the Basel III policy response to the financial crisis is complete.

By Paula Martín Camargo, Editor


Stage 1 of the June Five President’s report on Completing Europe's Economic and Monetary Union is now underway with a new package of measures - including an advisory European Fiscal Board; a more unified representation of the euro area in the IMF, and specific steps towards completing the Banking Union via a European Deposit Insurance Guarantee Scheme. The Commission also presented the roadmap to deepening the Single Market - President Juncker’s drive for the European economy to thrive in the global field.

The long British EU-referendum campaign began with several polls from the business world favourable to the ‘In’ option, and vague reform measures outlined by PM Cameron’s Government – Commission President Juncker made Cameron commit to unveil his ‘list of demands’ in November. The best statement so far of what the UK wants was Foreign Secretary Philip Hammond’s letter in POLITICO saying that “UK's government wants a renegotiation of market regulation, ‘ever-closer union,’ subsidiarity and welfare. David Cameron seems to have ruled out a second referendum in case of a Brexit vote - “leave means leave”. The newly-elected Labour leader Jeremy Corbyn might influence the campaign: he wrote in the Financial Times supporting EU membership but only if reforms were made to improve worker’s rights. Graham Bishop analyses what Corbyn’s amazing rise might mean for the Labour Party’s policy towards Europe.

[...] The Confederation of British Industry (CBI) supported ‘In’, making the case for being in a reformed EU. This was the argument the BoE’s Governor Mark Carney made between the lines in his speech presenting the report ‘EU membership and the Bank of England’. Carney said that “the openness of the UK economy has almost certainly increased as a result of EU membership,” and that “necessary EU reform must safeguard non-euro members.” But the balance might be shifting from Stay to Leave, according to the latest Ipsos-Mori Political Monitor, which shows that over half of Britons could be persuaded to change their mind in Europe vote depending on the effects on Britain of remaining or leaving the EU. The outcome of the UK Treasury Committee’s inquiry on the economic impact of the UK’s EU membership may be influential. [...]

Consultant in EU law Jean-Claude Piris made an exhaustive assessment of the legal options for the UK, concluding that "the adoption of reforms by the EU, which would not require a revision of the EU Treaties, appears to be the only realistic and politically and legally acceptable solution" to the Brexit issue. The ‘Norway model’ might be another alternative but PM Cameron criticised this approach. [...]



Payments systems were very topical in October, with a number of proposals and new rules being issued by European payments and financial institutions: the ECON updated EU rules on online payment services to reduce fees and fraud risks. [...]

BCBS Chairman Ingves reiterated that the Basel III policy response to the financial crisis is largely complete and the overall architecture of the regulatory framework is now clear. The Basel Committee published a report on RWAs for counterparty credit risk, a part of its wider RCAP which is intended to ensure consistent implementation of the Basel III framework.

The ECB issued a report on Financial Structures that shows that the median Tier 1 ratio in the banking sector increased to 14.4% from 13%.  It also set a higher capital hurdle for Greek banks in stress tests, which would potentially require them to raise billions of euros in extra capital.  [...]


ECB's Mersch reviewed the Eurosystem’s Vision 2020 over the coming years, and said it will complement the Commission’s project to establish a CMU in Europe – a project which the ECB and the Eurosystem fully support. [...]

Commissioner Hill outlined the urgent measures under the CMU: relaunching securitisation markets, establishing a European market for simple personal pensions, overhauling the Prospectus Directive, supporting venture capital, and developing a pan-European venture capital fund of funds.

The PCS explained the five key issues in the Commission’s securitisation proposal, and proposed solutions to the problems of the current proposals impact on bank capital. While AFME welcomed the Commission’s action plan for securitisation, Reuters reported that the French Banking Federation chief was sceptical about them. [...]


Full article available for consultancy clients here

© Graham Bishop

< Next Previous >
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information

Add new comment