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17 June 2021

This week in "Brussels"

Welcome to our Gold Friends weekly e-mail.


My highlights of the week: The European Commission’s first RRF issue was more than 10 times over-subscribed; Switzerland’s “Brexit” may turn out to be more profound than expected; Germany continues to veto EDIS. Stress-testing banks’ “greenness” may turn out to be the most powerful trigger for sustainable finance but insurers will be impacted even more severely. The SSM is stepping up “diversity” pressure on banks and Basel is consulting on the prudential treatment of crypto-assets. AFME’s conference re-iterated the calls for Banking Union and Capital Markets Union to be completed while the EBF laid out five concrete demands for clarity in the drive for the Digital Markets Act. The European Parliament completed the Committee stage with overwhelming approval on “country-by-country” tax reporting. Commissioner McGuinness assured the Irish Senate that the EU absolutely wants a good relationship with the UK but pointed out that all the implications were known five years ago!

Graham Bishop


Articles from 11 - 17 June 2021

General Financial Policy

EURACTIV: Commission convinces markets with first issuance of recovery bonds : The European Commission raised €20 billion in the markets on Tuesday (15 June) to start financing the EU’s €800 billion recovery fund, beating its expectations for the planned monthly bond sale. View Article
Project Syndicate: Switzerland’s Brexit Moment : Many in Switzerland have failed to recognize that their exorbitant privileges vis-à-vis the EU could not continue. The recent withdrawal from talks on an EU framework agreement could reduce the country’s single-market access and prompt a fundamental rethink of its relationship with the bloc. View Article
Vox EU's Thygesesen et al:Fiscal support for a sustainable recovery in the euro area : In its latest assessment of the euro area fiscal stance, the European Fiscal Board concludes that national policy plans for 2022 amount to an appropriate fiscal stance for the euro area as a whole.  View Article
Bruegel:The Conference on the Future of Europe: vehicle for reform versus forum for reflection : The approach of the European Union’s institutions to the Conference on the Future of Europe is muddled, with risks for the outcome. View Article
EURACTIV: Portugal investors demand bank bond money back or will boycott European fund : A group of international institutional investors coordinated by the Attestor Capital fund, on the hook for €2 billion in the Banco Espírito Santo case, want the European Commission to settle the case, warning that otherwise, they will not fund the post-pandemic economic recovery. View Article

Banking Union

POLITICO: Germany says nein to eurozone banking safeguards : Negotiations on joint deposit insurance system suspended due to deadlock between Berlin and Rome. View Article
SSM's McCaul: Strengthening credit risk management : Interview with Cyprus News Agency: What challenges do you see for the European banking sector going forward? What are the main risks and vulnerabilities it faces? View Article
ECB Banking Supervision seeking greater diversity within banks : Blog post by Frank Elderson, Vice-Chair of the Supervisory Board of the ECB, and Elizabeth McCaul, Member of the Supervisory Board of the ECB View Article
INDUSTRY JOINT COMMUNICATION: EBA feasibility study of an integrated reporting system under Article 430c CRR : The banking associations stress how critical it is to improve the efficiency of reporting in Europe. The banking industry has been calling for the creation of an integrated and standardized framework for data reporting... View ArticleDutch Banking Federation: Strict approach to Basel 4 implementation limits capacity for economic recovery : The strict application of the Basel 4 capital requirements, as proposed by the Dutch Ministry of Finance and Dutch Central Bank (DNB) earlier this week, would limit the capacity for economic recovery.  View Article

Capital Markets Union

AFME calls for renewed efforts towards Banking Union and Capital Markets Union to deepen Europe’s financial integration : AFME’s flagship Annual European Financial Integration conference, organised jointly with OMFIF, took place today, 2 days before the Eurogroup’s next meeting on 17 June. At this meeting, Eurozone finance ministers are expected to review and assess recent progress of the discussions on Banking Union. View Article
Insurance Europe: EC must fix flaws in Solvency II to unleash capacity for equity investments : Insurance Europe and Invest Europe have today published a joint position paper that calls on the European Commission to make improvements to Solvency II to remove unnecessary barriers that undermine insurers’ ability to invest in long-term equities.  View Article
EIOPA publishes first quarterly set of Occupational Pensions Statistics : The statistics contains up-to-date and high-quality data and provides a comprehensive picture of the European occupational pensions sector, including country breakdowns that allow for comparability. View Article
ESMA Public Statement on the implementation of the FRANDT commercial terms to provide clearing services : The European Securities and Markets Authority (ESMA) has been recently made aware of challenges that certain clearing membersand clients arefacingwhen preparing for the 18 June 2021 deadlineto provide clearing services in accordance with FRANDT commercial terms. View Article
ESAs publish amended technical standards on the mapping of ECAIs : The amendments reflect: the recognition of two new credit rating agencies (CRAs); the outcome of a monitoring exercise on the adequacy of existing mappings; and the deregistration of a number of CRAs.  View Article
ESMA publishes its 2020 Annual Report : It reviews its achievements in 2020 against its priorities and objectives in meeting its mission of enhancing investor protection and promoting stable and orderly financial markets in the European Union. View Article

Environmental, Social, Governance (ESG)

FT van Steenis: Investors should prepare for impact of green stress tests on banks : Central bankers look at powerful tool to nudge financial system to address climate risks View Article
SSM's Elderson: Patchy data is a good start: from Kuznets and Clark to supervisors and climate : Keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the ECB-EBRD joint conference on “Emerging climate-related risk supervision and implications for financial institutions” View Article
Better Finance: Taxonomy Delegated Act Article 8 - Obligation for certain companies to publish non-financial information : The rules set out in the delegated act clarify and allow for the translation of the technical screening criteria of the Climate Delegated Act (and the future Environmental Delegated Act) into quantitative economic performance indicators that will need to be publicly disclosed. View Article
CDSB:The Value Reporting Foundation launch paves the way for harmonisation : The integration of SASB and the IIRC under the VRF represents another step towards a unified set of global sustainability standards.  View Article
CDSB joins UN SSE and IFC to provide free climate disclosure training to stock exchanges and issuers : A multifaceted training course for stock exchanges to distribute to their markets, free of charge.  View Article
Accountancy Europe: Sustainability risk management for SMEs: inaction is not an option : Small businesses are at the heart of our economies. Our publication SME risk management: sustainability explains how and why SMEs need to put sustainability at the forefront. It outlines how accountants can help SMEs become more sustainable organisations so they can deal with these new realities. View Article

Fin Tech Regulation

European Commission’s proposal of a Digital Markets Act – EBF Key messages : Europe needs more competition to unlock all the opportunities that digital markets can bring. These opportunities, and healthy competition between firms, increasingly depend on timely access to relevant digital infrastructure, consumer gateways, data, and markets.  View Article
ESBG welcomes announcement of harmonised European Digital Identity : The European Savings and Retail Banking Group (ESBG) welcomes the intention to remove fragmentation and to build a harmonised legal framework across Europe, recognising the role of Member States as providers of the European Digital Identity Wallet. View Article
Basel Committee consults on prudential treatment of cryptoasset exposures : The proposals split cryptoassets into two broad groups: those eligible for treatment under the existing Basel Framework with some modifications; and others, such as bitcoin, are subject to a new conservative prudential treatment. View Article
EBA publishes report on the data provided by PSPs on their readiness to apply strong customer authentication for e-commerce card-based payme : The industry reported significant progress over the past 9 months in complying with the requirements for strong customer authentication (SCA) for e-commerce card-based payment transactions. View Article

Economic Policies Impacting EU Finance

European Parliament: Tax transparency: EP committees endorse deal on public country-by-country reporting : The new rules will soon oblige big multinationals to publically declare what taxes they pay in each EU country.  View Article


Commissioenr McGuinness: Opening remarks at Seanad Special Select Committee on the Withdrawal of the UK from the EU : .. it’s true to say that “Getting Brexit Done” was – and indeed is – much easier said than done. I think it is also worth noting that when it comes to the implications for Ireland and Northern Ireland, they were known 5 years ago.  View Article

CER: The cost of Brexit: April 2021 : We estimate that leaving the single market and customs union had reduced UK trade by 11 per cent in April 2021. That is on top of our previous finding of a 10 per cent hit to trade between the referendum and leaving the single market. View Article
City of London: UK Government urged to put digital trade at heart of future free trade agreements : City of London Corporation calls on the UK Government to secure strong commitments on digital trade in future free trade agreements (FTAs). View Article
CER: The UK-Australia trade deal has been painted as both a travesty and a triumph for Britain – it’s neither : This deal does not give us any insight into whether the UK will be able to conclude tougher negotiations with the US, India and South American countries. View Article
City AM: UK tech hiring hits fresh high amid bumper foreign investment : Since February tech jobs vacancies have consistently topped 100,000, while open roles rose to 132,000 in one week in May. View Article
FT: UK meat industry cuts production as Brexit labour shortages bite : Industry ‘heading for brick wall’ and calls on government to relax immigration rules View Article


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