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We have revised our approach to focus on the big themes for the next legislative period. We are targeting the interaction of the driving forces of politics and economics as they force the required changes in over-arching financial regulation. Details of these services are here

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Save the date for next Brussels for Breakfast! 18th September 2019

Articles from 06 September 2019 - 12 September 2019  

Banking Union 

Bank of England: Supervisory governance, capture and non-performing loans : This paper compares the impact of three supervisory governance models — supervision by the central bank, by an agency or by both of them — on bank non-performing loans. It finds that supervisory governance per se does not significantly affect non-performing loans. However, it also finds that, where the risk of capture is high, shared supervision is associated with a significant reduction in non-performing loans View Article 

Banking in Europe: EBF publishes 2019 Facts & Figures : The EBF has published Banking in Europe; the 2019 Facts & Figures, its annual update on the banking sector in Europe. The publication shows that the European banking sector, both as measured in terms of staff numbers and branches, continued to contract as the industry continued to improve efficiency while attempting to bolster its profitability. View Article 

SUERF: Controlling CBDC through tiered remuneration : This paper discusses two concerns that central bankers have associated with CBDC, namely risk of structural disintermediation of banks and centralization of the credit allocation process within the central bank and risk of facilitating systemic runs on banks in crisis situations.  View Article 

EBA will clarify the prudential treatment applicable to own funds instruments at the end of the grandfathering period expiring on 31.12.2021 : The EBA announced its intention to provide clarity on the appropriate treatment of the so-called ‘legacy instruments' at the end of 2021, when the benefits of the grandfathering period will expire. The aim of the clarification is to preserve a consistent and high quality capital base for EU institutions under the CRR. View Article 

EFAMA: Bond fund rally continued in Q2 2019 : The European Fund and Asset Management Association (EFAMA), has published its latest Quarterly Statistical Release describing the trends in the European investment fund industry in the second quarter of 2019 with key data and indicators for each EFAMA member countries. View Article 

Insurance Europe: IFRS 17: EU insurers say some improvements welcome, but major issues still to be addressed : Insurance Europe and the CFO Forum have issued a joint call for further improvements to be made to International Financial Reporting Standard (IFRS) 17 — insurance contracts — and have raised concerns over its timing. View Article

Capital Markets Union 

ECB's De Guindos: Growth and competitiveness in the euro area : Luis de Guindos, Vice-President of the ECB, focuses on the factors behind weak investment and productivity, on the remaining barriers to competition and on the importance of deepening EMU and completing the CMU to enhance the attractiveness of the euro area. View Article 

ESMA – Investors face increasing risks amid renewed market volatility : The report identifies a deteriorating outlook for the asset management industry and continued very high market risk. Recent trade tensions have triggered renewed volatility, and concerns over a no-deal Brexit remain key risk drivers for the second half of 2019. View Article 

IMF - A Capital Market Union for Europe: Why it’s needed and how to get there : The authors claim that larger intra-EU portfolio flows would help move the EU toward realizing its full economic potential. The relatively technical steps that are recommended for removing identified barriers to such flows should be feasible without high-level political deliberations. View Article 

Investment & Pensions Europe: One third of European insurers expect to cut number of external asset managers : Almost a third of European insurance companies expect to reduce the number of third-party asset managers they work with over the next 12 to 24 months, according to new research. View Article 

Environmental, Social, Governance (ESG) 

European Commission: The EU continues to lead the global fight against climate change : The Commission adopted a Communication reaffirming the EU's commitment to accelerated climate ambition.  View Article 

Bloomberg: Here’s how ‘green finance’ aims to save the planet : Green finance could be at a tipping point. After an explosive growth, it’s running into a perhaps surprising roadblock: a shortage of projects that are green enough. So-called greenwashing is still a risk, and critics complain about a lack of global standards and inconsistency among ESG scoring methods. View Article 

AFME says potential for green securitisation is huge : AFME published a new paper outlining the key factors needed to boost the growth of a green securitisation market in Europe. View Article 

ESMA published responses to survey on short-termism in the financial sector : Considering the impact of short-termism forms part of ESMA’s work on sustainable finance and relates to the European Commission’s Action Plan on ‘Financing Sustainable Growth’ View Article 

IVSC: Is goodwill a wasting asset? : IVSC has published the first article in a series looking into whether principles underlying business valuations are compatible with the concept of goodwill amortisation. View Article 

Fin Tech Regulation 

City A.M.: Fintech is all the rage, but is the bubble about to burst? : A new challenger bank or money app is making headlines about how it seeks to disrupt traditional banking and solve personal finance problems. The cavalier attitude to the importance of profitability has been viewed as a red flag, and some are now warning that an economic bubble has formed in the fintech space. View Article 

PIIE: Libra's challenge to regulators: Innovate! : Financial authorities in China, Europe, and the United States have reacted to Libra by vowing to protect the stability of the monetary and financial system. Now regulators must do more to shape the dramatic changes in financial systems of the future portended by Libra and rival cryptocurrencies. View Article 

EFRAG´s call for input from crypto-assets experts' : EFRAG is seeking input from crypto-assets experts' on its research project with the objective of identifying and proposing solutions for accounting challenges that are not addressed within existing IFRS Standards. View Article 

Graham's Articles 

The Huge Opportunity for “Remain” : 150-200 Seat Majority: the Message from 100 Years of First-Past-the-Post Elections.  View Article 

Economic Policies Impacting EU Finance 

Fondation Robert Schuman: Europe in the sino-American trade war : The US trade policy is destabilising the international trade system severely. The EU is fighting to maintain stability of a system under dire threat. This is an extremely difficult task but also a historic occasion to modify and adapt the international system to future challenges. View Article 

Project Syndicate: Draghi’s dangerous farewell : Ashoka Mody writes that the risks of further monetary stimulus measures by the ECB outweigh the benefits. Additional stimulus will either amount to less than anticipated or will not be sustained – yet it could still undermine the eurozone's financial system and public finances in far-reaching ways. View Article 

Working paper: ECB corporate QE and the loan supply to bank-dependent firms : Using a representative sample of businesses in the euro area, authors show that Eurosystem purchases of corporate bonds under the Corporate Sector Purchase programme (CSPP) increased the net issuance of debt securities, triggering a shift in bank loan supply in favour of firms that do not have access to bond-based financing. View Article

EU27 Politics 

Bruegel: Economic priorities for new EU leadership : Europe remains vulnerable; it is unprepared and it is procrastinating. Following European elections this May, new leaders are about to take their positions at the main European institutions. Maria Demertzis outlines the three most urgent challenges that require collective European action. View Article  

Council adopts list of candidates for appointment as Commissioner : The Council has adopted the list of persons whom it proposes for appointment as members of the Commission until 31 October 2024. View Article

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