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02 February 2017

This week in "Brussels"

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  Articles from 26 January 2017 - 02 February 2017

BIS: Frequently asked questions on market risk capital requirements
The published document sets out the first set of FAQs on the revised market risk standard. The questions and answers include clarifications both to the standardised approach and the internal models approach.  View Article
Financial Times: Bank of England attacks Brussels bank capital reforms
The head of the UK’s banking supervisor has attacked a European Commission proposal to force overseas banks operating in the EU to set up holding companies with ringfenced capital.  View Article
EBA reminds CAs of key deadlines and the ITS to be used for running the 2017 supervisory benchmarking exercise of internal approaches
Despite the pending approval by the European Commission of the amended Implementing Technical Standard on benchmarking, compliance with the proposed deadlines will ensure a smooth and timely start of the 2017 exercise.   View Article
Bank of England: FCA and PRA publish final changes to enhance enforcement decision-making processes
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have published final changes in a Policy Statement (PS) aimed at strengthening the transparency and effectiveness of their enforcement decision-making processes.  View Article
Bloomberg: Why policy makers want the EU to create a bad bank
The European Union should create a bloc-wide bad bank to help tackle the 1.2 trillion euros of soured loans on lenders’ books, policymakers said.  View Article
Financial Times: Germany will not ease rules to lure bankers after Brexit, warns BaFin
Germany’s financial watchdog BaFin warned that it would not relax its rules in a bid to attract banks looking for a new home in the EU following the UK’s Brexit vote.  View Article
Andreas Dombret: Statement at the Workshop on "Digital finance - regulatory challenges"
Deutsche Bundesbank's Dombret discussed regulatory challenges in the age of digitalisation.  View Article
Yves Mersch: Ructions in the repo market – monetary easing or regulatory squeezing?
ECB's Mersch reviews the trends that have affected both the supply and demand for good collateral which confluence reflects the situation in the repo market nowadays.  View Article
Mario Draghi: Opening remarks at the Joint ECB and European Commission Conference “Into the future: Europe’s digital integrated market”
The President of the ECB argued that, to be fully comprehensive, a single financial market must also extend to capital market integration. Draghi said that the Eurosystem has laid some of the key fundamentals for a capital markets union, notably the launch of TARGET2-Securities.  View Article
FSB consults on guidance for CCP resolution and resolution planning
With CCPs an increasingly important part of the financial system, particularly following post-crisis reforms to mandate central clearing of certain standardised over-the-counter derivatives, it is vital that CCPs do not themselves become a new source of “too-big-to-fail risk”, according to the FSB.  View Article
ESMA announces details of 2017 CCP stress test
The exercise covers 17 EU CCPs including all products currently cleared by these CCPs and will assess the resilience and safety of the EU’s CCPs from a systemic risk viewpoint.  View Article
ESMA updates Q&As on MiFID II transparency and market structure topics
ESMA updated two Questions and Answers documents on implementation issues relating to transparency and market structure topics under the revised Market in Financial Instruments Directive and Regulation.  View Article
ESMA letter on EMIR Review and Sanctioning Powers to the European Commission
ESMA has written to the European Commission to ask it to consider a number of issues relating to its supervisory and sanctioning powers under EMIR, in the context of the ongoing review, and also similar issues related to credit rating agencies.  View Article
ESMA consults on future guidelines for portability between trade repositories
ESMA put for public consultation future guidelines on the transfer of data between trade repositories authorised in the European Union under the European Market Infrastructure Regulation.  View Article
EIOPA updates the technical documentation of the methodology to derive the risk-free interest rate term structures
The European Insurance and Occupational Pensions Authority published an update of the technical documentation of the methodology to derive the risk-free interest rate term structures.  View Article
Solvency II one year on: successfully implemented, but excessive conservativeness risks harming consumers, long-term investment and economy
The many layers of conservativeness built into the design of Solvency II and its tendency to treat insurers like traders instead of long-term investors could harm consumers, long-term investment and the economy. Policymakers need to take action to make the framework more reflective of reality.  View Article
Commercial Risk Europe: UK insurers’ financial strength ratings likely to survive Brexit: AM Best
The financial strength ratings of UK insurers are unlikely to be downgraded by their government’s plans to exit the EU, according to AM Best. However, uncertainties surrounding Brexit, and in particular the effect on EU passporting rights, are a concern for insurers, the rating agency added.  View Article
Insurance Europe: Support expressed for guidance on the right to data portability
Insurance Europe has responded to the Article 29 Working Party’s consultation on its guidelines for the correct implementation of the right to data portability in the General Data Protection Regulation (GDPR).   View Article
  Asset Management
ESMA advocates common principles for setting up share classes in UCITS funds
ESMA issued an Opinion on the extent to which different types of units or shares (share classes) of the same UCITS fund can differ from one another, having found diverging approaches in different EU countries.  View Article
Investment & Pensions Europe: BaFin to curtail German pension funds' alternatives allocations
Changes to investment rules for German pension funds may limit their ability to invest in alternative asset classes, Willis Towers Watson consultancy has warned.  View Article
Investment & Pensions Europe: German asset managers 'overcharging' institutional investors, study shows
Asset managers are not passing on cost reductions from digitalisation and economies of scale to German institutional investors.  View Article
Investment & Pensions Europe: Think tank calls for UK long-term investment vehicles
The UK government should introduce a new investment structure to foster the creation of large pools of “patient capital”, which would bypass the “complex” process of merging pension funds, a think tank has said.  View Article
  Corporate Governance/Accounting
Accountancy Europe: Member States’ implementation of new EU audit rules
Six months after the implementation deadline of new EU audit rules, Accountancy Europe presents an updated state of play of this process in 31 European countries, including 28 EU Member States.   View Article
IASB's Hoogervorst: Financial reporting in a digital world
The Chairman of the IASB spoke about how the uptake of IFRS Standards is strengthening accountability and enabling cross-border investments.  View Article
AFME response to EBA-ESMA consultation on the assessment of the suitability of members of the management body and the key function holders
AFME confirms that the notions of management body in its supervisory function and management body in its management function need to be clarified.  View Article
ICGN: Joint comment letter to Prime Minister Theresa May
The signatories of this letter unitedly recognise the importance of Section 172 of the Companies Act and discuss the fact that there is currently no effective mechanism for policing this law.  View Article
City A.M.: In case of corporate governance, board reformers must not rest on their laurels
Six months ago, corporate governance suddenly shot to the top of the political agenda when Theresa May formally launched her Conservative Party leadership campaign.  View Article
FRC: UK audit firms can do more to support roll-out of leading-edge data analytic techniques
According to findings from a review carried out by the FRC, UK audit firms are at the forefront of developing and using data analytic techniques with the potential to improve audit quality. A more structured approach to their deployment could accelerate their effective use.  View Article
ECIIA and FERMA collaborate in cyber risk initiative
Given the growing risk posed by cyberattacks on businesses across Europe, ECIIA and the FERMA have launched a joint initiative aimed at helping organisations strengthen their cyber defences.  View Article
  Financial Services Policy
ESMA publishes new Q&A on Alternative Performance Measures Guidelines
ESMA published a new Questions and Answers document, comprising six questions, on the implementation of its Guidelines on the Alternative Performance Measures for listed issuers.  View Article
Oliver Wyman: Implications of the Trump Administration for Financial Regulation
The advent of the Trump Administration brings a new era for financial regulation and related legislation, with the potential for major changes in the US and globally. This paper describes the underlying forces at work and the political dynamics driving how they will interact.  View Article
John Iannis Mourmouras: The risks and prospects for the global economy and capital markets in 2017
Mourmouras focus on the new US economic policy under President Trump; the end of the dominance of central banks; and the national elections in Europe and the associated political uncertainty due to populism that may trigger further changes in the eurozone and the broader EU.   View Article
Wolfgang Münchau: How Europe can avoid falling into Trump’s trap
Hard-bargain rhetoric on Brexit drives the UK into the hands of the US, writes Münchau on the FT.  View Article
The National Interest: The Death of TPP: The Best Thing That Ever Happened to China
President Trump’s decision to withdraw from the Trans-Pacific Partnership weakens America’s strategic-economic position in East Asia.  View Article
POLITICO: US, Britain to begin preliminary trade talks
Trump and May agree to tee up free trade deal for moment Britain leaves EU.  View Article
Policy Exchange: What should a US-UK trade deal be based on?
The focus of a US-UK new trade deal should be on looking for opportunities to take advantage of a shared culture and economic model to further lower such non-tariff borders.  View Article
The Economist: America, China and the risk of a trade war
Trade tensions will mount, but a destructive trade war can still be averted.  View Article
  Grahams Articles, Comments & Speeches
Resignation from FSNF Executive Committee and termination of further participation in the Forum
Graham Bishop has resigned from the Financial Services Negotiation Forum.  View Article

  Graham's tweets

© Graham Bishop

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