Articles from 5 - 11 November, 2021
General Financial Policy
Remarks by Paschal Donohoe following the Eurogroup meeting of 8 November 2021 : Topics included: digital euro, economic governance, good news on banking union
FSB highlights implementation progress and gaps on effective compensation practices in financial institutions : It highlights uneven progress toward implementing the Principles and Standards, with banks relatively more advanced than insurance and asset management firms. This may reflect the more pressing need for banks to align compensation with risk-taking following the 2008 global financial crisis.
Basel Committee: climate-related financial risks, specifying cryptoassets prudential treatment and reviewing G-SI : This follows discussions on risks and vulnerabilities to the global banking system, as well as policy and supervisory initiatives, at its meetings of 21 October, and 5 and 8 November.
ESMA publishes technical standards on crowdfunding : This marks an important milestone towards harmonising the new European crowdfunding regime.
Vox: The EU fiscal framework: A flanking reform is more preferable than quick fixes : The latest European Fiscal Board annual report proposes a reform to the EU fiscal framework based on (1) a medium-term debt anchor; (2) an expenditure rule as the main policy instrument; and (3) a single escape clause applied on the basis of independent analysis.
Bruegel: Next Generation EU borrowing: a first assessment : The Next Generation EU programme is radically changing the way the EU finances itself ..interacts with financial markets...assesses the first design decisions made by the Commission .. the issuances that have taken place... outlines the potential risks/opportunities linked to upgrading EU borrowing.
Banking Union
EBA publishes Guidelines on recovery plan indicators : The Guidelines establish a common EU approach for developing the framework of recovery plan indicators, providing additional guidance on indicators’ calibration, monitoring and breaches notifications.
Capital Markets Union
AFME: Guiding Principles for Data Sharing - A Perspective for European Capital Markets : Data sharing is an essential function within European capital markets, in which firms see opportunities for further data sharing to support common objectives such as greater security and resilience, sustainability, innovation and compliance and monitoring.
Environmental, Social, Governance (ESG)
FT: Big business and COP26: are the ‘net zero’ plans credible? : Companies have been in a congratulatory mood in Glasgow. But critics say their efforts to cut emissions are too vague
Vox's Weder di Mauro: Combatting climate change: A CEPR collection : This column brings together 45 Vox columns on the economics of climate change with the aim of (1) providing an overview of some of the key issues from the economist’s perspective, (2) stimulating further research, and (3) demonstrating how CEPR is fully engaged with this central debate of our times
UNEP FI: Net-Zero Banking Alliance at COP 26 : Banks in the Alliance commit to using robust, ambitious, science-based targets to decarbonise their lending and investment portfolios on a 1.5 degree climate trajectory to achieve net zero emissions by 2050.
PCS: Green securitisation – ECB adds its voice in support of the “green proceeds” approach : Overall an excellent piece, it is notable when it comes to securitisation for its support for a definition of green that encompasses issuance where the proceeds are used by the originator to finance sustainable projects. This can be found in article 3.1.5 of their opinion.
City of London: The Future of Voluntary Carbon Markets : Decarbonisation commitments are driving up demand. Leading global corporates aresetting ‘net zero’ targets and many expect to rely on some carbon credit use to deliver this.
FT's Tett: The green transition may depend on auditors : Companies are under pressure to come clean on carbon emissions, but the framework for measuring this is still unclear
IPSF report compares EU and China’s green taxonomies : The report is a first step in terms of analysing the comparability and interoperability of taxonomies across jurisdictions, in line with the Roadmap of the G20 Sustainable Finance Working Group (SFWG).
Fin Tech Regulation
EURACTIV: EU ambassadors approve ‘general approach’ to Digital Markets Act : The Digital Markets Act (DMA) is a landmark proposal to regulate large online platforms such as Amazon, Google or Facebook, which are designated as “gatekeepers” because they play a systemic role in the digital ecosystem.
Economic Policies Impacting EU Finance
UK Finance: The future of withholding tax relief : Global investors are becoming more educated and committed to minimising WHT leakage and the demand for change is very real.
Brexit and the City
Commissioner McGuinness announces proposed way forward for central clearing : Strike a balance between safeguarding financial stability in the short term – which requires taking an equivalence decision to avoid a cliff-edge for EU market participants - and safeguarding financial stability in the medium term – requires us to reduce this risky over-reliance on a third country.
The UK in a changing Europe: The UK's Greening Finance Roadmap : By its very nature, responding to climate change requires cross border action, and in green finance, the EU is an important player.
Brexit
Bloomberg: U.K. Triggering Article 16 Would Be Reckless, Irish PM Warns : The U.K. would be “reckless and irresponsible” if it were to move to set aside parts of the Brexit agreement, Ireland’s prime minister said, amid growing speculation the British government is preparing to do just that.