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07 January 2021

This week in "Brussels"

Welcome to our Gold Friends weekly e-mail.

Happy New Year highlights to 7 January 2021: A 1200-page Brexit deal suddenly emerged into the limelight at the last possible moment and No 10 “took back control” from the EU. Rather than the Trump-like statements of British ministers, the actual consequences will now start to emerge e.g. half the trading volume in EU shares left London in the first two days.

However, the EU’s everyday agenda of financial regulation rolled on: an EU “bad bank” or national ones? Solvency II Review – will it help the EU economy? Sustainability reporting – the effects of the Taxonomy Regulation; European Data Protection Board (EDPB) proposals in the wake of the ECJ’s Schrems II ruling – will they permit easy data transfer out of the EU? Etc.

Graham Bishop


Articles from 18 December 2020- 7 January 2021

 General Financial Policy



General Financial Policy

EU-UK Trade and Cooperation Agreement: protecting European interests, ensuring fair competition, and continued cooperation in areas of mutual interest: After intensive negotiations, the European Commission has reached today an agreement with the United Kingdom on the terms of its future cooperation with the European Union. View Article
EP President Sassoli: Deal on EU-UK future relations brings clarity for EU citizens and workers : Statement by the President of the European Parliament David Sassoli and the Head of Parliament's UK Coordination Group David McAllister on the agreement reached on future EU-UK relations. View Article
European Council President Charles Michel on the agreement on the future EU-UK relationship : The announcement that the negotiators have reached an agreement is a major step forward to establish a close relationship between the EU and the UK.We thank the President of the Commission Ursula von der Leyen and Chief Negotiator Michel Barnier for their tireless efforts. View Article
ECON: COVID-19: deal to give go-ahead to the new Recovery and Resilience Facility : RRF is the biggest building block of the Next Generation EU, €672.5 billion in grants and loans to support EU countries for three years, Funds supporting key policy areas such as green transition, digital transformation, crisis preparedness as well as children and youth View Article
PIIE's Veron: Memo to the European Commission on the European Union’s contribution to international financial regulation and oversight : The Commissioner for Financial Services Policy should define and promote a vision for a sustainable global financial regulatory and supervisory order, based on the lessons from the previous major international financial crisis in 2007-09 and its aftermath. View Article
Goldschmidt: 2021 will be the making or the undoing of the European Union. : Covid 19 is an opportunity for the Commission to implicate the “Citizen” in future of the Union. View Article


Banking Union

SSM's Enria: wide-ranging Interview with Börsen-Zeitung : Dividends, NPLs, bad bank, mergers, fit-and-proper managers, IT, cyber, AML, Basel III View Article
ESRB's Mazzaferro at SUERF: Consequences for banks’ business from COVID-19 and policy responses : Concerted responses by fiscal, monetary and prudential authorities to the COVID crisis have successfully avoided a systemic financial crisis in the spring. But the impact of the crisis on banks’ balances sheets will only become fully visible, when the lagged effects on unemployment and firm insolvencies may strike, as governmental loan guarantees and moratoria expire. View Article
SRB: A European Bad Bank – a necessary tool for financial stability? : Andrea Enria’s recent comments in the Financial Times fanned the embers of the idea of a pan-European Asset Management Company, more commonly referred to as a European bad bank. Mr Enria promoted the idea as a possible tool for strengthening financial stability across the Banking Union’s banking sector. View Article
Basel III: EBF comments on EBA updated impact assessment : he European Banking Federation notes the publication this week by the European Banking Authority (EBA) of its updated assessment[1] of the impact of the forthcoming Basel III agreement implementation on the capital requirements of Europe’s banks. View Article
EBA publishes final technical standards on estimation of Pillar 2 and combined buffer requirements for setting MREL : The European Banking Authority (EBA) published today its final draft Regulatory Technical Standards (RTS) specifying the methodology to be used by resolution authorities to estimate the Pillar 2 (P2R) and combined buffer requirements (CBR) at resolution group level for the purpose of setting the minimum requirement for own funds and eligible liabilities requirement (MREL).  View Article

Capital Markets Union

EFAMA: Towards a stillborn PEPP? Investment management industry reacts to Commission’s : The European Fund and Asset Management Association (EFAMA) regrets that the European Commission has decided to endorse EIOPA’s proposal to include the initial cost of advice under the 1% fee cap for the Basic PEPP (pan-European Personal Pension Product).  View Article
Insurance Europe: EIOPA’s Solvency II review opinion fails to offer improvements to help EU economy, consumers and green transformation : Following the publication of the European Insurance and Occupational Pensions Authority’s (EIOPA) opinion to the European Commission on the review of Solvency II, deputy director general of Insurance Europe, Olav Jones, said: View Article

EIOPA outlines key financial stability risks and vulnerabilities for insurance and pension sector and recommends that any dividend distributions: The European Insurance and Occupational Pensions Authority (EIOPA) published today its December Financial Stability Report that sheds light on the financial stability risks in the European insurance and pension sector. View Article

EIOPA consults on ORSA in the context of COVID-19 : The European Insurance and Occupational Pensions Authority (EIOPA) published today a consultation on the Supervisory Statement on Own Risk Solvency Assessment (ORSA) in the context of COVID-19. View Article
IPE: BaFin sets out new rules on governance, risks for occupational schemes : BaFin, the German financial supervisory authority, has decided to enforce requirements on minimum risk assessments (ERB) and business organisation (MaGo) for Pensionskassen and Pensionsfonds. View Article
ESMA Consultation Paper MiFID II/MiFIR review report on Algorithmic Trading : Many provisions of MiFID II relate either directly or indirectly to algorithmic trading. This consultation paper therefore adopts a holistic approach to algorithmic trading and reviews all related provisionstogether with the aim of having the current framework operating more efficiently. View Article

Environmental, Social, Governance (ESG)

GRI: Step towards stronger financial reporting to complement sustainability reporting : GRI responds to launch of prototype climate-related financial disclosure standard View Article
IFAC Welcomes New Report on Climate-Related Financial Disclosure : IFAC applauds the publication today of Reporting on Enterprise Value, Illustrated with a Prototype Climate-Related Financial Disclosure Standard, a new report from leading sustainability and integrated reporting organizations CDP, CDSB, GRI, IIRC, and SASB. View Article
IAIS issues statement of support for IFRS Foundation Trustee’s proposal on sustainability reporting : The IAIS believes that the establishment of the Board would be an important step towards a globally accepted framework for sustainability reporting. The IAIS stands ready to support this initiative by providing insurance supervisory expertise, as needed. View Article
Insurance Europe: More time needed to discuss proposals for Ecolabel criteria for retail financial products : The extension of the criteria’s scope to include all investment-based insurance products (IBIPs) is an important step towards greater sustainability. View Article
Insurance Europe: Insurers warn EIOPA against prescriptiveness in ORSA climate risk requirements : Insurance Europe has today published its response to a consultation conducted by the European Insurance and Occupational Pensions Authority (EIOPA) on its draft opinion on the use of climate change scenarios in an insurer’s own risk & solvency assessment (ORSA). View Article
EFAMA: Asset Managers support call for regulation of ESG data, research and ratings : EFAMA, the voice of the European investment management industry, joins the French and Dutch financial market authorities’ call for a European regulation of ESG data, research and ratings. View Article
IOSCO responds to IFRS Consultation on Sustainability Reporting : The International Organization of Securities Commissions (IOSCO1) today submitted its response to the IFRS Consultation on Sustainability Reporting. View Article
SMSG Response to ESMA’s Consultation on the Draft Advice to the European Commission under Article 8 of the Taxonomy Regulation : The SMSG largely supports ESMA’s draft advice to the European Commission. Nevertheless, the SMSG makes a number of general comments and advises ESMA to change or refine its approach in respect of specific aspects of the draft. View Article
ICMA responds to the draft Delegated Act supplementing the EU Taxonomy Regulation : ICMA believes that while Substantial Contribution and DNSH are recognised as fundamental concepts of the Taxonomy, the Delegated Acts or associated commentary could go further to acknowledge that implementation will take time, even for advanced actors, and that some criteria remain undefined. View Article
EFAMA: EU Taxonomy at risk of hampering green housing investments : As the voice of the European asset management industry, EFAMA strongly welcomes the development of the EU Taxonomy and its proposed technical screening criteria in the Delegated Acts.  View Article
BDB: Draft Delegated Regulation establishing technical screening criteria for the first two environmental objectives of the EU Taxonomy Regulation : The German Banking Industry Committee (GBIC) participated in the public consultation of the European Commission on its draft Delegated Regulation establishing technical screening criteria for the first two environmental objectives of the EU Taxonomy Regulation and commented as follows. View Article
ECIIA: Risk in Focus 2021 | Practical guidance on climate change and environmental sustainability : This practical guidance is part of the Risk in Focus 2021 publication and is produced to support the narrative report by the 10 European Institutes of Internal Auditors in Austria, Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain, Sweden and the UK & Ireland. View Article

Protecting Customers

Insurance Europe: European Data Protection Board should take risk-based approach to international data transfers : A broad coalition of industry federations – including Insurance Europe – has published a joint statement raising serious concerns about a set of draft recommendations published by the European Data Protection Board (EDPB) in the wake of the European Court of Justice Schrems II decision. View Article
EDPB consultation on supplementary measures: EBF response : The European Banking Federation (EBF) welcomes the opportunity to respond to the European Data Protection Board’s (EDPB) consultation on its Recommendations on measures that supplement transfer tools to ensure compliance with the EU level of protection of personal data.  View Article
ESBG stresses economic impact of data flows outside European Union : Signs multi-sector joint statement on European Data Protection Board supplemental measures View Article

Fin Tech Regulation

Vox: The European Commission Digital Markets Act: A translation : The European Commission has finally issued the proposed Digital Markets Act, its bid to complement antitrust intervention in digital markets with ex-ante regulation in the form of a set of obligations that platforms identified as “gatekeepers” should abide by.  View Article


The Guardian: Brexit deal: Boris Johnson says EU trade agreement resolves 'question that has bedevilled politics for decades' – live : The Guardian articles on the EU-UK Trade Agreement View Article
Federal Trust: Was Godot worth the wait? The EU-UK Trade and Cooperation Agreement explained : Since the white smoke emerged from the European Commission chimney on the afternoon of Christmas Eve, journalists, commentators and representatives of just about every conceivable interest have been crawling over it to work out what it means, who won or lost and how it will affect people on both sides of the English channel. View Article
CEPS: John Bruton - The Brexit trade deal is no frictionless uncoupling : The Trade and Cooperation Agreement between the EU and the UK is an exercise in damage limitation. The UK’s decision to leave the EU, the Customs Union and the Single Market, means it will face numerous obstacles. View Article
Project Syndicate's Gabriel: Europe After Brexit : Remaining wary of geopolitics, Germany has been carrying its weight on internal EU political matters, pointing to a potential division of labor between itself and France in the future. The question is can Europe find ways to preserve both its own autonomy and its close partnership with America. View Article
BusinessEurope:EU-UK: a deal is most welcome : Today the European Union and the United Kingdom concluded a long-awaited agreement that will govern their future relationship. As we are approaching the end of the transition period, both sides should do the necessary to allow the deal to be applied as of 1 January 2021. View Article
National Interest: Brexit Deal: Will it Make the UK Stronger? Brexit may be done, but there are a number of unanswered questions. The future of the UK looks very much in doubt. A retired Danish diplomat gives us his take.  View Article
FT Shrimsley:The Brexit deal is just the end of the beginning : Shorn of the economic advantages of EU membership, the UK is going to need a more agile and effective leadership View Article
Federal Trust: Brexit: The “Deal” is less than it seems : Throughout the month of December commentators and politicians speculated tirelessly on the likelihood of a negotiated trade arrangement between the UK and EU before the end of the year. Many expected that the personal convictions of Boris Johnson and the intransigence of the Conservative Party would prevent the conclusion of any such agreement. On 24rd December, those who took this view were apparentlyproved wrong. View Article
Federal Trust: The UK’s European Question is Far From Over :  View Article
Investment Association: Brexit deal is good news : "Today's announcement that a deal has been reached is good news for the millions of British and European savers and investors who rely on the investment management industry and is a welcome first step in defining the future relationship between the UK and the EU...  View Article
FCA: Regulatory change for firms as Brexit transition period ends : As of 11pm on 31 December 2020, the transition period ended and EU law no longer applies in the UK. For many financial services businesses, this means changes to existing systems and services. View Article
Bloomberg: The Key Issues Weighing on the City of London After Brexit Deal : U.K. firms have days left to prepare for looser EU links; Local offices, equivalence and market disruption on the agenda View Article
SRB and Bank of England bank resolution cooperation arrangement comes into force : The Single Resolution Board and the Bank of England continue to work closely together to ensure we have appropriate arrangements in place for effective cooperation on the management of the failure of cross border banks, should the need arise.  View Article
ESMA withdraws the registrations of six UK-based credit rating agencies and four trade repositories : The European Securities and Markets Authority (ESMA), the supervisor of European Union (EU) credit rating agencies (CRAs) and trade repositories (TRs), has withdrawn the registrations of the following United Kingdom (UK) based CRAs: View Article
FCA: MoUs with European authorities in the areas of securities, insurance and pensions, and banking : The MoUs came into effect at the end of the transition period. View Article
Bloomberg: Britain Budges on Derivatives Rules in Last-Minute Brexit Relief : Britain’s market watchdog eased restrictions on cross-border derivatives trading in a move to calm fears of market turbulence just hours before the Brexit transition period ends. View Article
FT: London unlikely to regain lost EU share trading, warn City figures : UK has given up about €6bn of daily volume since Brexit transition ended. The EU share trading that flooded out of the City of London after the end of the Brexit transition is unlikely to return, banks and asset managers have warned.  View Article

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© Copyright 2020 Graham Bishop

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