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Highlights of my week: The Commission announced its plans to start borrowing €80 billion this year for the RRF. AFME demonstrated that the great majority of EU equity trading is still on-“venue”. Commissioner McGuiness analysed what happens when all three pillars of corporate reporting failed at Wirecard – investors lost €20 billion! FSB set quantitative targets for better cross-border payments – bar for Bitcoin etc. raised further? Oliver Wyman helpfully tabulated the six policy errors that CBDC must avoid. Strongly split opinions on the European Parliament’s deal on corporate tax transparency. The Dutch Banking Federation poured a bit of cold water on investor’s real attitudes to “green”. Some academic analysis of Brexit: financial service exports already more than £110 billion lower than expected since the Referendum.

  Graham Bishop

 Articles from 28 May - 3 June 2021

General Financial Policy

EURACTIV: EU Commission to borrow €80bn in 2021 to finance recovery : The European Commission is set to borrow about €80 billion ($97.76 billion) this year in long-term bonds to finance the European Union’s plan for economic revival after the pandemic, the EU executive said on Tuesday (1 June).

Vox: Lower for longer – macroprudential policy issues arising from the low interest rate environment : At the end of 2019 the European Systemic Risk Board General Board mandated a Task Force on Low Interest Rates to revisit the ESRB’s 2016 report on “Macroprudential policy issues arising from low interest rates and structural changes in the EU financial system”, assess subsequent developments, compare these to the risks identified in the report, and assess whether new sources of systemic risk have emerged.

Better Finance: European Commission Consultation: Improving the Situation of EU Citizens as Taxpayers for Direct and Indirect Tax : As it stands, too often the taxpayer faces plenty of difficulties to avoid double taxation.

 Vox: Financial integration and structure in EMU during the corona crisis : The coronavirus health crisis also had a strong impact on financial systems. This column discusses its effects on euro area financial integration and financial structure. It illustrates how decisive monetary, fiscal and prudential policy responses first contained and then reversed the initial sharp fragmentation in asset prices across member countries. 

Banking Union

SSM's Enria: The effectiveness of European banks’ boards: progress and shortcomings : Florence School of Banking and Finance online seminar “Banks’ Board Members and Policy Makers: A Conversation” 

 FSB seeks feedback on its proposals for quantitative targets for enhancing cross-border payments : The proposed targets set goals for improving cost, speed, transparency and access for cross-border payments in the coming years through the actions taken under the Roadmap. 

 Capital Markets Union

AFME: The landscape for European equity trading and liquidity : A new report published today by Oxera and commissioned by the Association for Financial Markets in Europe (AFME), provides evidence that the majority of equity trading in Europe (83%) takes place on venues[i].

 ESMA publishes Final Report on the MiFIDII/MiFIR obligations on market data : The Final Report sets out guidelines on the requirements to publish market data on a reasonable commercial basis and to make market data available free of charge 15 minutes after publication.

 EMIR: Commission specifies commercial terms for clearing services for OTC derivatives : To facilitate access to clearing for clients, especially those that have a limited volume of activity in the OTC derivatives market, clearing members and clients which provide clearing services (‘clearing service providers’) must provide those services on FRANDT terms provided for in Article 4(3a) of the EMIR Regulation (EU) No 648/2012.

ESMA Newsletter May 2021 : On 28 May, we said goodbye to Verena Ross, our Executive Director for the past 10 years. On 1 June, Natasha Cazenave takes office as the new Executive Director of ESMA.

Environmental, Social, Governance (ESG)

 Commissioner McGuiness: Speech at the European Policy Centre: Corporate reporting in the Capital Markets Union after Wirecard : Wirecard has illustrated what can happen if the three pillars of corporate reporting – corporate governance, audit and supervision – fail.And if you look at the amount of money – around €20 billion of investors’ money was lost – this is a major, major issue.

Finance Watch: Climate risks and financial stability: the snowballing cost of procrastination : After years of warnings on the tremendous macro-economic consequences of the unfolding climate crisis[1], financial supervisors are finally acknowledging that regulatory action on climate risks is a necessity in order to fulfil their financial stability mandate[2].

 EBA consultation on draft technical standards on Pillar 3 disclosures of ESG risks: EBF response : A few key points of the EBF response on the EBA consultation on draft technical standards on Pillar 3 disclosures of ESG risks:

Fin Tech Regulation

Oliver Wyman: Central Bank Digital Currencies - Six policy mistakes to avoid : Central Bank Digital Currencies (CBDCs) are coming and it is important to do them right. There is strong momentum in key nations for central banks to create digital versions of their currencies for widespread use.  

Economic Policies Impacting EU Finance

 ECON: EU lawmakers strike milestone deal for corporate tax transparency : Multinationals will have to disclose the amount of tax they pay in each EU country; The public and tax authorities will be able to see what taxes are being paid where; Some flexibility but detailed rules to prevent multinationals from abusing it 

POLITICO: NGOs blast EU tax transparency bill as ‘almost meaningless’ : Tax activists are lining up to berate Brussels’ legislators, arguing they aren't going far enough after MEPs agreed on a tax transparency bill that will require giant companies to disclose where they pay taxes and make profits.

 Sven Giegold: EU agreement on public country-by-country reporting: a milestone for greater tax justice! : Negotiators from the Council and the European Parliament have just agreed on a compromise text for public country-by-country reporting by multinational companies. 

 FT Brexit shrank UK services exports by £110bn, academics find : Brexit shrank UK services exports by more than £110bn over a four-year period, new research shows, highlighting the far-reaching trade implications of Britain’s decision to break away from the EU.