Welcome to our Gold Friends weekly e-mail.
Highlights of my week: A side-effect of the Ukraine war has been the heightened awareness of the need for effective AML controls as the EBA assessed the different national approaches just as ECON got to work on the AMLA proposal. Central clearing in the EU will be a pivotal moment in CMU (as well as Brexit) and consultation responses from EBF and ALFI illustrate the forces at work. Parliament is now tackling one of the toughest issues in the green taxonomy – gas/nuclear – just as energy security becomes the centre stage. Interestingly, the US’s SEC is finally joining the corporate climate disclosure debate. The FSB is pondering on the implications of Covid expanding Big Tech’s financial services footprint. However, the European Payment’s Institute seems to be abandoning its challenge to Visa/Mastercard. The Bank of England chose to align with the EU in delaying enforcement of some of the Basel rules.
Graham Bishop
Articles from 18-24 March 2022
General Financial Policy
Commissioner Gentiloni at University of Oxford: Turning point: the implications of Putin's war for Europe's economic and political choices : The war will inevitably have an impact on the European economy and aggravate the challenges we were already facing... View Article
Banking Union
Anti-money laundering and countering the financing of terrorism supervision is improving but not always effective yet, finds the EBA : The EBA published today the findings from its assessment of competent authorities’ approaches to the anti-money laundering and countering the financing of terrorism (AML/CFT) supervision of banks. View Article
MEPs launched work on Anti-Money Laundering package with expert discussion : They discussed the possibilities for improved information-sharing and transparency, for example inter-connected registries, and the potential of the proposed Anti-Money Laundering Authority (AMLA). View Article
WSBI-ESBG: European Commission review of EU macroprudential framework for banks : The paper stressed out that the current capital buffer framework has scope for improvement as it focuses too much on capital levels and financial resiliency. View Article
Capital Markets Union
EBF feedback to the EC consultation on the review of the central clearing framework in the EU : The risks of serious market disruptions and complex practical, operational and legal challenges in case of a forced relocation, especially if extended to legacy positions, have been pointed out in several occasions. View Article
ALFI responds to the EU Commission on the consultation on the review of the central clearing framework : If an EU CCP is not able to provide a sufficiently competitive offer, there is a strong likelihood that clearing would be relocated to other third-country jurisdictions, like the US. View Article
EFAMA's response to the EU Commission's targeted consultation on options to enhance the suitability and appropriateness assessments : EFAMA appreciates the opportunity to share our views on the European Commission’s consultation on enhancements to the suitability and appropriateness assessments forming part of the wider, upcoming Retail Investment Strategy. View Article
BETTER FINANCE response to the European Commission Consultation on the review of suitability and appropriateness assessments : BETTER FINANCE welcomes the initiative of the European Commission to harmonise and improve the consumer journey towards investing. View Article
InsuranceEurope: Insurers welcome ELTIF review, but warn asset class remains unattractive for long-term institutional investors : As insurers — which are Europe’s largest institutional investors — require access to a wide range of assets that provide attractive returns and portfolio diversification, improvements to the ELTIF framework to make it more appealing to institutional investors are welcome. View Article
EIOPA issues recommendations from EIOPA’s 2021 Insurance Stress Test : Having analysed the results of the stress test, EIOPA has now defined a series of actions that, once implemented, will result in a more resilient insurance sector in Europe. The recommendations fall into three categories. View Article
ECON: Public Hearing on Solvency II : ECON Committee organised a Public Hearing on Solvency II with representatives from the Next CMU High-Level Group, the Italian insurance supervisory authority IVASS, Finance Watch, and Insurance Europe. View Article
ESMA: Flash crashes on sovereign bond markets – EU evidence : We focus our analysis on two flash events in the German and Italian bond markets and show how liquidity vanished ahead of the crashes, resulting in trades having a large price impact on prices. View Article
IOSCO consults on recent retail investor trends and related conduct implications : Increased retail participation in securities markets could mean retail investors increasingly influencemarket trends and pricing, with corresponding regulatory implications for retail market conduct. View Article
Euopean Commission: Personal pensions: The pan-European personal pension product (“PEPP”) applies as of today : This will pave the way for a new voluntary EU-wide scheme for people to save for their retirement, and a broad range of financial institutions across the EU will be able to offer it. View Article
Environmental, Social, Governance (ESG)
Taxonomy: MEPs to scrutinise the Commission’s classification of gas and nuclear : Parliament’s Committees on Economic and Monetary Affairs and on Environment, Public Health and Food Safety will debate the classification of gas and nuclear with Commissioner McGuinness. View Article
ECON: Exchange of views with Commissioner Mairead McGuinness : The joint ECON and ENVI Committee scrutinised the complementary Taxonomy Delegated Act in the presence of Commissioner McGuinness. View Article
CEPS: From NGEU to a Green Capital Markets Union : The two main pillars of the Recovery and Resilience Facility (RRF), a key component of the Next Generation EU (NGEU) programme, are green and digital. View Article
UN EP - FI: The Net-Zero Asset Owner Alliance renews its call to asset managers for climate-focused blended finance vehicles : The purpose for this renewal is to organise another set of presentations of blended finance product offerings and give visibility to the latest innovative vehicles. View Article
GRI: Putting sustainability reporting in perspective : From generalisations about an ‘alphabet soup’ of ESG reporting standards, to debates over what stakeholder capitalism actually means – and how to differentiate between concepts of materiality - the topics covered in the new GRI Perspective series have been very varied. View Article
IPE: ‘Milestone’ reached as SEC proposes climate-related disclosure rule : The US securities markets regulator has released keenly anticipated draft rules requiring companies to make certain climate change-related disclosures, including greenhouse gas emissions and transition planning information. View Article
Protecting Customers
ECGI: What does stakeholder capitalism mean for investors? : Investor action on stakeholder issues must be grounded in fiduciary duty and client mandates View Article
Fin Tech Regulation
Finextra: Big Tech and fintechs extend grip on financial services - FSB : The Financial Stability Board says that the Covid pandemic has enabled Big Tech firms like Google, Amazon and Apple and fintechs to widen their footprint in financial services, with significant implications for incumbents and consumers. View Article
FSB report finds that COVID-19 has accelerated the trend towards digitalisation of retail financial services : While comprehensive data on the market shares of FinTechs, BigTechs and incumbent financial institutions in retail digital financial services are scarce, proxies suggest that BigTechs and larger FinTechs have further expanded their footprint in financial services. View Article
ESMA: EU financial regulators warn consumers on the risks of crypto-assets : This warning comes in the context of growing consumer activity and interest in crypto-assets and the aggressive promotion of those assets and related products to the public, including through social media. View Article
POLITICO: Brussels split over who will be crypto watchdog : At issue is crypto’s existential question: Is it an asset or is it money? View Article
Reuters: BlackRock's Fink says Russia-Ukraine crisis could accelerate digital currencies : BlackRock Inc's chief executive, Larry Fink, said on Thursday that the Russia-Ukraine war could end up accelerating digital currencies as a tool to settle international transactions, as the conflict upends the globalization drive of the last three decades. View Article
Oliver Wyman's Elliott: Key Questions for Digital Asset Regulation : Regulation and public policy for digital assets are in flux in the United States and globally. Bitcoin and other digital assets are newer than the core laws and regulatory principles that govern the financial system, so these assets do not fit easily within existing frameworks. View Article
Finextra: EPI abandons plan for Visa and Mastercard rival as member banks quit : The European Payments Initiative has given up on its effort to build a rival to Mastercard and Visa in Europe after more than half its members left. View Article
Economic Policies Impacting EU Finance
GRI: UN tax convention would ‘advance tax transparency’ : GRI backs sustainability credentials of proposed Convention on Tax View Article
Brexit and the City
City of London: Providing financial services to the world : Financial services remain an important pillar of the UK’s economy. The latest 2020 data from the ONS shows that trade and foreign direct investment in UK financial services demonstrated resilience against the backdrop of a challenging year. View Article
City AM: London boots out European rivals to claim Continent’s top finance hub crown : The City beat the likes of Paris, Frankfurt and Amsterdam to Europe’s crown, according to Z/Yen Group’s thirty first global financial centres index (GFCI) View Article
UK in a Changing Europe: Solvency II - Brexit dividends come with risks in financial services : Regulatory reform has the potential to release capital from insurers that could be invested in large green and infrastructure projects ... However, there are also risks that such reforms may drive up fees, with costs being passed on to policy holders and pension savers. View Article
Bloomberg: Europe Eyes Bigger Share of Settling Securities Business : EU depositories settled a quadrillion of transactions in 2019; Plan to simplify passporting to boost cross-border volumes View Article
Reuters: Britain aligns with EU on delaying Basel bank capital rules : The Bank of England said it planned to delay implementing a final set of post-financial crisis capital requirements for banks until January 2025, bringing Britain in line with the European Union in a move that banks welcomed. View Article
Brexit
EURACTIV: Rush for UK trade pacts risks having little benefit, lawmakers warn : UK lawmakers have warned that “there is no guarantee” that the new international trade agreements being negotiated by ministers “will deliver actual economic benefits”, in a new report View Article
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