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My highlights of the week: The think-tanks may be back from Easter holidays but the big shock of the week was the realisation that the German Green leader – Annelena Baerbock – could well be in the next German government and perhaps even as Chancellor! What would that mean for Germany’s EU policy? European banks were in the news again – French banks are faring better than expected on Covid loans and SUERF suggests that EU banks in general may be able to muddle through with regulatory relief. The insurance industry continues to argue that Business Interruption policies will need public support in a pandemic. Massive flows into sustainable funds show the public’s support while the Commission’s Corporate Sustainability Reporting Directive (CRSD) proposal puts the EU at the forefront of global actions. Vox thinks it is time to re-start thinking about the EU’s reform roadmap. Finally, the European Parliament approved the Brexit “TCA” – but kept itself fully in the implementation loop.
Watch my CSFI video: 172nd Brussels 4 Breakfast -: Brexit, Banking, Capital Markets Union, ESG and Digital: the Lugano Convention, CBDC, CRD6 etc., with Denis MacShane www.GrahamBishop.com
(This e-mail provides the headers of a selection of the articles published this week. If you would like to upgrade to our Gold service and access all articles - with live links to the underlying news - please click on the button)
Articles from 23 -29 April 2021
General Financial Policy
Der Spiegel: Annalena Baerbock Holds the Keys to Germany's Next Election : A politician with the Green Party could become German chancellor for the first time. Annalena Baerbock is a far more dynamic candidate than her conservative and center-left competitors - and she could be poised for a senior position in the next government, if not the country's top political office.
Bruegel: Do citizens care about Europe? More than they used to : The level of interest of European citizens in the European Union is increasing, but still lags behind EU economic and policy integration.
SUERF: Smoke and Mirrors: On cancelling public debts held by the Eurosystem : A number of economists have recently called on the Eurosystem to cancel the public debts on its books, claiming that this operation would be painless and would give governments much needed room for maneuver on the fiscal front. Jef Boeckx and Xavier Debrun show that debt cancellation would be useless, costly and risky.
Long Finance Pezzulli: Italy Narrowly Fended Off The Pillaging Of Its Financial Markets Infrastructure. The question Is, For How long? : Milan Italy's Financial Powerhouse - Since 2007, Borsa Italiana, the operator of the Milan Stock Exchange, had been wholly-owned by the London Stock Exchange Group (LSEG)
SUERF: The Impact of COVID-19 on European Banks : Despite Europe’s largest economic contraction since the Second World War, swift policy action has averted a financial crisis. However, the risk of a prolonged, partial, and uneven recovery amid a highly uncertain outlook weighs on European banks, which are heavily exposed to economic sectors that have been hard hit by the pandemic.
FBF: Government-backed loans: adjustments and update to repayment indicators : France has seen a massive roll-out of government-backed loans (GBLs) since end-March 2020: at 9 April, nearly €137bn had been disbursed to more than 675,000 businesses. View Article
Capital Markets Union
CRE: Ferma asks insurance industry to join forces with buyers on finding pandemic solutions : Ferma has called on the insurance industry to work with risk managers to drive a pan-European risk transfer solution for pandemic and wider non-damage business interruption (NDBI) risk, amid concerns that momentum has slowed and insurers aren’t taking the lead.
CRE: The Geneva Association calls for government action on pandemic risk schemes : Governments must act as the “insurers of last resort” for business interruption (BI) losses from future pandemics, according to The Geneva Association, which says it is “impossible” for insurers to cover the risk.
Environmental, Social, Governance (ESG)
FT: European sustainable index fund flows surpass all others for first time : Assets in sustainability-focused passive funds trebled in 2020.
GRI backs mandatory EU reporting on sustainability impacts : GRI has welcomed that the European Commission is maintaining its ambition to achieve progress in corporate transparency on sustainability impacts, following publication of the proposed new Corporate Sustainability Reporting Directive (CSRD).
CDSB supports EU’s ambition to review the corporate reporting rules and suggests improvements to meet Green Deal objectives : CDSB welcomes the much-awaited publication of the Corporate Sustainability Reporting Directive (CSRD). The suggested changes presented by the European Commission represent a solid foundation to start discussions, but some improvements are needed.
EFRAG welcomes its role in the European Commission´s proposal for a new CSRD : The European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) envisages the adoption of EU sustainability reporting standards. The draft standards would be developed by EFRAG. The standards will be tailored to EU policies, while building on and contributing to international standardisation initiatives.
Accountancy Europe: New directive takes EU corporate sustainability reporting to the next level : The European Commission’s (EC) has proposed the Corporate Sustainability Reporting Directive (CSRD) to strengthen sustainability reporting. This is fundamental for achieving a sustainable economy. It requires companies to share more targeted, reliable, and easily accessible information as the basis for sustainable decision-making.
ACCA welcomes the publication of the European Commission’s package on Directing finance towards the European Green Deal : A practical and globally consistent outcome will better serve preparers, auditors and users of financial and non-financial information, ACCA urges policy-makers to work together with all actors, and in particular the other standard-setters across the globe.
ICMA ERCC publishes consultation paper on the role of repo in green and sustainable finance : The ICMA European Repo and Collateral Council (ERCC) has published a consultation paper on the role of repo in green and sustainable finance, exploring the sustainability aspects of repo and collateral as well as assessing the existing opportunities and potential risks in this area.
Economic Policies Impacting EU Finance
Vox: EU economic policy and architecture after Covid: Rebooting the debate on the EU reform roadmap : The financial crisis of 2007-2012 was the first wake up call to the inadequacy of the euro area architecture when facing a large systemic crisis. This column re-introduces the Vox debate on Europe’s economic architecture .. Contributions to the debate are welcome.
Vox: Reshaping European economic integration in the post-Covid world : Redefining the new boundaries between state and market; revisiting the nature of subsidiarity; reconnecting the EU domestic with the global agenda; and learning to respond to longer term structural shifts.
European Parliament formally approves EU-UK trade and cooperation agreement : Political groups strongly welcome the agreement; Parliament must have a say in the implementation of the agreement; Agreement will enter into force on 1 May after Council conclusion
BDB:Cooperation Agreement between the EU and the United Kingdom : This agreement is a vital element of the expected memorandum of understanding (MoU) on the financial sector:
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