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16 September 2021

Standard Weekly Newsletter




 

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Highlights of the week: The formal highlight should have been the State of the Union message (SOTEU – to its fans) but there was little new of substance for financial markets. However, Eurofi in Ljubljana produced some interesting speeches on banking union and the familiar refrain to get it completed. Interestingly, Keynes’ biographer – Lord Skidelsky – cited Keynes extensively in his analysis that QE is storing up many problems that could ultimately rebound on the health of the banking system. More immediately, both EBF and the German banks expressed their opposition to an NPL register as a means of stimulating secondary trading. The flood of comments to influence COP26 is well underway – 600 investors (representing €46 trillion/40% of investment assets) set out their five priorities. The prudential regulation of banks’ holding of cryptoassets also came under scrutiny. We resumed "Brussels4Breakfast" with the 175th monthly edition - see www.GrahamBishop.com.

 Graham Bishop

(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 10-16 September 2021

General Financial Policy

2021 State of the Union Address by President von der Leyen : Relevant topics included: digital Europe, Next Generation funding, corporate taxation and the Green Deal.

EPC: The von der Leyen Commission: Time to reset, regroup and get things done : How does the Commission ensure a continued capacity for fresh thinking and renewal to direct the EU’s political agenda? Can the EU deal with the political fall-out from uncertainty, shocks and change? Is the Commission’s executive structure tailored to deliver the major tasks it faces?
Project Syndicate's Skidelsky: Where Has All the Money Gone? A Keynesian view : Amid all the talk of when and how to end or reverse quantitative easing (QE), one question is almost never discussed: Why have central banks’ massive doses of bond purchases in Europe and the United States since 2009 had so little effect on the general price level?  View Article
 

Banking Union

SSM's Enria: How can we make the most of an incomplete banking union? : The urgent need for progress in banking integration: Today I will focus on the concrete actions we can take to achieve real progress towards a truly integrated prudential jurisdiction within the Single Supervisory Mechanism (SSM) and within the current institutional and regulatory environment.
Bank of Spain Hernandez de Cos: Basel III implementation in the European Union : Yet the job of safeguarding global financial stability is far from finished. The outstanding Basel III reforms, which were finalised in 2017, are aimed at addressing significant fault lines in the global banking system. Addressing these fault lines remains as important today as it was pre-pandemic.
SRB: No time to waste in completing the Banking Union : The European Banking Union still awaits completion, with more work urgently needed to move towards a fully integrated system that delivers better crisis management, depositor protection and a stronger banking sector. 
SSM's McCaul: The final leap: implementing the Basel III reforms in Europe : Not surprisingly, I will argue that full and timely implementation in Europe of the last set of Basel III regulatory reforms, without any further delays or changes in substance, is in the interest of all stakeholders.
Targeted consultation of the European Commission: GBIC rejects the introduction of an EU-wide data hub for NPLs : From the GBIC's point of view, there is already a high level of transparency on the secondary markets for non-performing loans (NPLs). The market participants know each other, their standards and particular expertise.
Targeted consultation on improving transparency and efficiency in secondary markets for NPLs: EBF response : We do not see relevant value in establishing a general and mandatory NPL data hub where only sellers are obligated to report. However, data on post-execution recoveries seems the most relevant to share and the EBF stands ready to discuss in detail how to make progress on this area within terms of level-playing field.
 
Capital Markets Union
 
Insurance Europe: Financial sector associations call on EC to provide reasonable implementation timeline for PRIIPs changes : Insurance Europe — alongside several other financial sector associations — raised serious concerns in response to a consultation conducted by the European Commission on planned changes to the Packaged Retail and Insurance-based Investment Products (PRIIPs) framework.
Insurance Europe: Insurers raise significant concerns about EIOPA’s pension dashboard proposals : Insurance Europe has published its response to a consultation by the European Insurance and Occupational Pensions Authority (EIOPA) on its draft technical advice to the European Commission on the development of pension dashboards and data collection. 

Environmental, Social, Governance (ESG)

EFAMA: EU needs a usable, investor-centric and globally relevant social taxonomy : “A usable, investor-centric and globally relevant social taxonomy would rebalance the EU´s sustainable finance strategy and grasp the full potential of ESG investing...."
UNEPFI: Global investor statement: Investors urge govts to undertake five priority actions before COP26 : A record number of 587 investors with US$46 trillion in assets under management are urging governments to rapidly implement five priority policy actions that will allow them to invest the trillions needed to respond to the climate crisis.
IFAC Urges Stakeholders to Prepare Now for Global Sustainability Standards : IFAC believes that jurisdictions must begin examining how global standards that the International Sustainability Standards Board (ISSB) intends to develop, starting with climate, can fit together with sustainability-related reporting requirements set at the jurisdictional level. 
ECGI: Corporate Climate: A Machine Learning Assessment of Climate Risk Disclosures : In this post, we present machine learning tools aimed both at extracting climate risk disclosures and inferring to what extent issuers’ characteristics affect the likelihood of submission.
 
Insurance Europe: Insurers support EC’s work on social taxonomy, but focus must be finalisation of climate-related taxonomy : Insurance Europe has responded to a consultation by the European Commission on a draft report by its Platform on Sustainable Finance on a social taxonomy. 
Proposal for the Corporate Sustainability Reporting Directive: EBF position : Banks particularly welcome the extended scope of the proposed Directive, which would cover all large undertakings, as well as listed small and medium-sized enterprises.
Draft Report on Taxonomy Extension Options linked to Environmental Objectives: EBF response : The EBF supports the extension of the EU Taxonomy ‘beyond green’ to include significantly harmful activities, therefore creating a ‘permanent significantly harmful’ red category.
 

Fin Tech Regulation

BCBS consultation on Prudential treatment of cryptoasset exposures: EBF response : The goal should be to ensure a level playing field between the banking sector and market participants who are active in the issuance and trading of cryptoassets, but who are not within the scope of prudential regulation
GBIC comments on the regulatory treatment of cryptoassets : The GBIC has commented on a consultation of the Basel Committee on Banking Supervision on the regulatory treatment of crypto assets. From the point of view of the DK, a uniform global framework is required for the regulatory handling of crypto assets.
 

Friends' Standard Services

Brussels4Breakfast 175: risks to the City of London, German elections, new AML initiatives... : The main challengers to the City may be NY and Asian centres, but Brussels still matters - and there seems to be little let-up in its policy of non-cooperation with London, particularly over CCPs.

Brexit

European Parliament paves the way for special fund to mitigate the impact of Brexit : MEPs approved the €5 billion Brexit Adjustment Reserve to help member states deal with the economic, social and territorial impact of the UK’s departure from the EU.

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