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29 April 2021

This week in "Brussels"

Welcome to our Gold Friends weekly e-mail.


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.

Graham Bishop

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



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. View Article

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. View Article
Better Finance: Commissioner McGuinness: “Putting people at the heart of the financial system is part of my vision” : The BETTER FINANCE’s international conference, high-level speakers and over 350 registered participants debated “How to make the EU Capital Markets Union (‘CMU’) work for people?”. View Article
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. View Article
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) View Article
Bruegel: Confronting the risks: corporate debt in the wake of the pandemic : As European economies emerge from lockdowns, it is becoming clearer that corporate debt has reached critical levels. A new French scheme, in which the state guarantees portfolios of subordinated debt, shows how financial support could be targeted better. View Article

Banking Union

 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. View Article

SRB's Konig: Single Point of Entry - a resolution strategy addressing the home – host issue in Europe’s Banking Union : Resolution planning has come a long way since the financial crisis 2007/08 and is now firmly rooted in the Banking Union’s regulatory framework. View Article
EBA consults on draft Guidelines on the delineation and reporting of available financial means of Deposit Guarantee Schemes : The proposed Guidelines aim to improve consumer confidence in financial stability throughout the EU by establishing a more harmonised approach to funding DGSs and increase transparency and comparability of the financial position of DGSs.  View Article
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

Insurance Europe: Multi-pillar pension systems can help EU address the ageing of European societies : Insurance Europe has today published its response to a consultation conducted by the European Commission on its green paper on ageing. Insurance Europe’s contribution focuses specifically on the questions pertaining to pensions and long-term care, given the extensive expertise that insurers have in these areas. View Article
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. View Article
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. View Article

ESMA consultation on Appropriateness Guidelines Under MIFID II: EBF response : The EBF welcomes ESMA’s effort to give guidelines on how to best apply the appropriateness test requirements. View Article

CEPS: Study on the Non-Financial Reporting Directive : This report provides data analysis as part of the ongoing monitoring of implementation of the Non-Financial Reporting Directive (NFRD). The study analysed data on more than 17 million companies, gathered survey responses from more than 200 companies and conducted interviews with over 60 stakeholders. View Article

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  View Article
IPE: Hedge funds lag behind peers on ESG investment factors – bfinance : Out of 256 investors surveyed, only 7% – and 13% of large investors with more than $25bn (€20.7bn) in assets under management – reported that their hedge fund and liquid alternatives managers offered “high integration” of ESG principles in their investment processes. View Article
CDP: The time to green finance : Almost all financial institutions’ climate impact and risk is driven by the activities they finance in the wider economy, yet the data suggests that this is not yet where the focus is for a large number of institutions. View Article
CDP Europe comment on sustainable corporate governance : CDP supports the European Commission’s proposal to develop an EU legal framework for supply chain due diligence to address adverse impacts on environmental issues. View Article
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). View Article
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.  View Article
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. View Article
IFAC Sees Continued Opportunity to Harmonize Corporate Sustainability Reporting : IFAC, the International Federation of Accountants, which comprises 180 member and associate organizations and represents more than 3 million professional accountants globally, welcomes the publication of the much-anticipated draft text of the European Union’s revised Corporate Sustainability Reporting Directive. View Article
EuropeanIssuers: Statement on Corporate Sustainability Reporting Directive : EuropeanIssuers welcomes the European Commission’s proposal published yesterday for a Corporate Sustainability Reporting Directive, revising the Non-Financial Reporting Directive (NFRD). View Article
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.  View Article
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.  View Article

 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. View Article

ACCA: Changing business for the planet: A simple guide to natural capital management for internal and external auditors : In the context of natural capital management and its reporting, ACCA (The Association of Chartered Certified Accountants), the European Confederation of Institutes of Internal Auditing (ECIIA) and Deloitte outline the core principles governing the approach that auditors should take.  View Article

Economic Policies Impacting EU Finance


 Bloomberg: France, Germany Support U.S. 21% Tax Plan for Corporations : Le Maire, Scholz in joint interview with Die Zeit, Le Figaro; U.S. President Biden proposed 21% tax rate for multinationals View Article

CEPS: Steering and Monitoring the Recovery and Resilience Plans - Reading between the lines : This paper provides an extensive account of the procedures and rules of the Recovery and Resilience Facility. View Article

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. View Article
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. View Article



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  View Article
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: View Article
EPC: Could the Brexit domino effect come back to haunt us? : The common perception of Brexit as a failed project might change over time, implying that its domino effect could still rear its ugly head. View Article

City Corporation unveils action plan to be world’s most innovative, inclusive and sustainable centre : The Square Mile must adapt to post-pandemic economic and social trends in order to remain a world-leading ecosystem, according to a new report published today by the City of London Corporation. View Article


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