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23 May 2019

This week in "Brussels"

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  Articles from 16 May 2019 - 23 May 2019

  Banking Union
EBA updates on its work in response to the Commission's call for advice on Basel III implementation
The European Banking Authority is currently finalising its impact assessment on the implementation of Basel III, in response to the European Commission's call for advice.   View Article
ESAs consultation on technical standards on the reporting of intra-group transactions and risk concentration for Financial Conglomerates
The draft technical standards aim at offering a single framework of requirements for the reporting of intra-group transactions and risk concentration by financial conglomerates subject to supplementary supervision in the European Union.  View Article
ISDA publishes two consultations on benchmark fallbacks
ISDA has launched two new consultations on benchmark fallbacks – one covering adjustments that would apply to fallback rates in the event certain interbank offered rates are permanently discontinued, and another relating to pre-cessation issues for LIBOR and certain other IBORs.  View Article
European Parliament: Banking resolution challenges ahead in the Banking Union
This note presents the summaries of three papers requested by the ECON Committee to external authors, to give a topical assessment of the Single Resolution Board’s past performance and a view on future priorities or areas that would call for increased attention.  View Article
Investment & Pensions Europe: Analysis: Experts warn of bank stress test impact on covered bonds
Banks could be asked to tell the ECB how much liquidity they could generate from over-collateralised covered bonds – a move that has caused some experts to warn of negative consequences for the burgeoning asset class.  View Article
Investment & Pensions Europe: Five banks hit with €1bn in fines after ‘banana split’ FX cartel uncovered
The European Commission has fined five banks more than €1bn in total for their involvement in two cartels in the spot foreign exchange market.   View Article
EBF recommendations for the 2019-2024 legislative policy cycle and beyond
The European Banking Federation has published a manifesto that outlines the main regulatory priorities for the banking sector in the context of the upcoming 2019-2024 EU legislative policy cycle.  View Article
FCA: Statement on the launch of the finalised CTI templates
The FCA welcomes the announcement by the Cost Transparency Initiative (CTI) officially launching finalised and industry-ready templates for the disclosure of costs and charges to institutional investors.  View Article
  Capital Markets Union
Financial Times: EU trio tries to quicken drive to more integrated capital markets
Brexit gives bloc ‘urgent strategic’ problem, say France, Germany and the Netherlands.  View Article
Keynote speech by Verena Ross at the ICMA Conference 2019
ESMA Executive Director Verena Ross delivered a keynote spoke about key challenges that are occupying the EU securities markets and ESMA this year and beyond.  View Article
Financial Times: MiFID II critics are not seeing the big picture
Karel Lannoo writes that early data on its effects show market opening and integration are continuing apace.  View Article
Financial Times: Big banks to fight MiFID push for extra transparency in FX markets
Lenders say additional disclosures required would be cumbersome to provide and of little value.  View Article
ESAs publish amended technical standards on the mapping of ECAIs under the Capital Requirements Regulation
The amendment reflects the outcome of a monitoring exercise on the adequacy of existing mappings. The ITS are part of the EU Single Rulebook for banking aimed at creating a safe and sound regulatory framework consistently applicable across the European Union.  View Article
Prospectus Regulation: the Autorité des Marchés Financiers launches a public consultation on the update of its General Regulation
The provisions of the European Prospectus Regulation will come into force on 21 July 2019. In this context, the regulator is launching a consultation on several amendments to its General Regulation. About one hundred articles are affected.  View Article
ISDA Letter to ESAs on IM Model Requirements
The authors of the letter urge the European policy makers and national regulators to calibrate the EMIR implementing rules on the back-testing and internal governance requirements associated with the use of globally approved IM models and initial and on-going approval on initial margin models.  View Article
EurActiv: Capital markets need to start making sustainability mainstream
The joint report by the OECD, the World Bank Group and the UN Environment Programme suggests that sustainable finance should become mainstream, but the market is still lagging far behind. This is why market players need to reboot the financial system and rethink old structures.   View Article
Bank of England: Solvency II: Maintenance of the transitional measure on technical provisions
This consultation paper (CP) sets out the Prudential Regulation Authority’s (PRA) proposals to update Supervisory Statement SS6/16 ‘Maintenance of the ‘transitional measure on technical provisions’ under Solvency II’.  View Article
Commercial Risk Europe: Moody’s says IFRS 17 unlikely to alter credit assessments
IFRS 17 will meaningfully affect some insurers’ reported profit and equity, but their underlying financial position will not change, according to Moody’s Investors Service. As a result, the new accounting standard is unlikely to alter its credit assessment in the vast majority of cases.  View Article
Insurance Europe: 2018-2019 Annual Report published
Insurance Europe has published its 2018–2019 Annual Report, setting out the European insurance industry’s positions on the main insurance issues of the day. Topics in this year’s Report include: Solvency II, climate change, sustainable finance, pensions, cyber risk and data protection.  View Article
Insurance Europe: Frédéric de Courtois named vice-president of Insurance Europe
Frédéric de Courtois, general manager of Generali Group, has been elected vice-president of Insurance Europe, the European insurance and reinsurance federation, for a three-year term.   View Article
  Asset Management
TPR tightens its regulatory grip to deliver better outcomes for pension savers
The Pension Regulator’s new corporate plan for 2019 – 2022 outlines how as part of TPR’s more proactive and targeted approach hundreds more schemes will be contacted in the coming year.   View Article
  Corporate Governance/Accounting
IASB proposes annual improvements to IFRS
The IASB has published proposed narrow-scope amendments to four IFRS Standards (IFRS 1, IFRS 9, IFRS 16, IAS 41) as part of its maintenance and improvements of the Standards.  View Article
Deloitte comments on four IFRS Interpretations Committee tentative agenda decisions
Deloitte has published its comment letters on IFRS Interpretations Committee tentative agenda decisions related to IAS 19, IFRS 15, IFRS 16, and cryptocurrencies, as published in the March 2019 IFRIC Update.  View Article
ECA: Member States should step up efforts to tackle fraud in EU cohesion spending
EU Member States’ efforts to tackle fraud in cohesion spending remain too weak, according to a new report from the ECA. According to the ECA, Member States’ assessments of the effectiveness of their anti-fraud measures are too optimistic.   View Article
Financial Times: KPMG to reform UK governance in response to audit market review
KPMG will create a new audit executive committee in the UK with responsibility for managing the performance and risks of that part of the business, in response to the Competition and Markets Authority’s conclusion that audit arms should have a separate chief executive and board.  View Article
EFAA: Accountants instrumental to micro-entities simplifying their accounting
EFAA's survey report ‘Acceptance Of The Micro-Entities Accounting Option In Europe’ reveals that accountants are instrumental in the decision of micro-entities to take-up the option for simplified accounting.  View Article
IPE: SSGA presents ‘game-changing’ ESG scoring system
State Street Global Advisors (SSGA) has developed a system for scoring companies on their environmental, social and governance (ESG) practices that it believes will help unlock a shift towards sustainable capital markets.  View Article
  Financial Services Policy
ECB: Working paper: Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures
This paper proposes a characterisation of crypto-assets in the absence of a common definition and as a basis for the consistent analysis of this phenomenon. It also analyses recent developments in the crypto-assets market and unfolding links with financial markets and the economy.  View Article
Financial Times: EU parliament will seek to dictate priorities for Brussels after election
The European Parliament’s mainstream parties want to use the threat of populist upheaval to force Brussels to swallow a “coalition agreement” written by MEPs setting out key policies for the next five years.  View Article
POLITICO: Austrian government collapses over Russia scandal
Chancellor Sebastian Kurz calls for a snap election after a video shows the far-right leader of the Austrian coalition government offering contracts for cash.  View Article
Fondation Robert Schuman: Far right: its conversion to Europe!
The radical and far right parties attempts to Europeanise their discourse might spur the pro-European parties in the European Parliament to develop new dimensions to European integration which are vital to resist better to the assaults and pressure brought by external powers, writes Sylvain Kahn.  View Article
POLITICO: Fear will save the EU
Fear is a strong motivator, argues European Council on Foreign Relations's director Mark Leonard. Populists have been successful in leveraging voters’ fears into votes. Now it’s time for pro-Europeans to leverage a Continent’s anxiety and come up with convincing solutions.  View Article
Michel Barnier: In Defense of Europe
Faced with growing geopolitical challenges from Russia, China, and the United States, Europe must take its future into its own hands by defending its interests and values. Otherwise, the European Union and its member states will become others' prey in the new global (dis)order.  View Article
POLITICO: Barnier: UK has the ‘right’ to a European commissioner
The EU's chief Brexit negotiator Michel Barnier said he is in favor of the United Kingdom nominating a new European commissioner, along with other EU member countries, in an interview by Bild am Sonntag.  View Article
POLITICO: Timmermans lays ground for left coalition against EPP
Frans Timmermans, the Socialist nominee for Commission president, used the last major candidates' debate to push for a left-wing alliance that could break the center right's monopoly control of the EU leadership.  View Article
ECB's De Guindos: Deepening EMU and the implications for the international role of the euro
Speech by Luis de Guindos, Vice-President of the ECB, at the occasion of the joint conference of the European Commission and the European Central Bank on European financial integration and stability.  View Article
Ignazio Visco: The economic and financial outlook of the euro area -halfway down "the long and winding road"
The Governor of the Bank of Italy said "that the most immediate steps should be: completing the banking union, rethinking the management of banking crises, and establishing a well-functioning capital markets union."  View Article
IB Times: US-China trade war could lead to global recession, economist says
The trade war between the U.S and China holds ominous consequences for the global economy and the risk of recession is very high, warned an economist with Morgan Stanley.  View Article
Main results - Economic and Financial Affairs Council
Ministers prepared for upcoming international discussions on digital taxation. The Council adopted conclusions on the implementation of the 2018 country-specific recommendations as well as an update of the EU list of non-cooperative tax jurisdictions.  View Article
Main results - Eurogroup
In regular format, the Eurogroup focused on the macroeconomic situation and policy challenges. In inclusive format, it discussed the budgetary instrument for convergence and competitiveness.  View Article
Main results - General Affairs Council
The Council focused on the next long-term EU budget and preparations for the June European Council.  View Article
ECB: Negative interest rates, excess liquidity and retail deposits: banks’ reaction to unconventional monetary policy in the euro area
Negative monetary policy rates are associated with a particular friction because the remuneration of retail deposits tends to be floored at zero. Authors investigate whether this friction affects banks’ reactions when the policy rate is lowered to negative levels, compared to a standard rate cut in the euro area.  View Article
ECB's Cœuré: The rise of services and the transmission of monetary policy
Benoît Cœuré, Member of the Executive Board of the ECB, focuses on secular forces that have shifted economic activity, employment and consumption expenditure across advanced economies away from manufactured goods and towards services.  View Article
Annual inflation up to 1.7% in the euro area
The euro area annual inflation rate was 1.7% in April 2019, up from 1.4% in March 2019. A year earlier, the rate was 1.2%. European Union annual inflation was 1.9% in April 2019, up from 1.6% in March 2019. A year earlier, the rate was 1.5%.  View Article
Euro area international trade in goods surplus €22.5 bn
The first estimate for euro area (EA19) exports of goods to the rest of the world in March 2019 was €205.6 billion, an increase of 3.1% compared with March 2018 (€199.5 bn).   View Article

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