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My highlights of the week: Ukraine becomes an EU candidate and the French Presidency of the EU closes – after a dramatic turn in expectations. The Commission’s 2022 Strategic Foresight report proposes moulding the green and digital revolutions into a new shape driven by Russia whilst ECB policy has to respond to the `Russian’ inflation. The new AML Authority gets a green light from Council – now including crypto in its remit. The Commission received 154 responses to its ESG rating consultation; the pressure is on to ensure EU Green Bonds deliver their priorities and the `sustainable‘ standard-setters are getting down to work on their global collaboration. The Commission’s withholding tax and double taxation consultation drew responses from right across the investor spectrum. The Brexit wars are heating up: thanks to the Protocol, the Northern Irish economy is handsomely outperforming the UK, as are financial/professional services. But how long will the latter keep up the momentum? ESMA published its timetable for reporting consultations and is about to go overdue on co-operation with third countries on CCP recognition. Could this be related to the gross breach of trust on Northern Ireland? Will the EU want to trust the UK to keep its word (let alone solemn Treaty) on potentially very expensive support for CCPs?
Graham Bishop
Articles from 24-30 June 2022
Policy impacting Finance
European Council conclusions on Ukraine, the membership applications of Ukraine, the Republic of Moldova.. : 11. The European Council has decided to grant the status of candidate country to Ukraine and to the Republic of Moldova.... View Article
France at the head of the Council: positive results despite the war : Under the motto "recovery, power, belonging", the French presidency of the Council, commonly referred to as the FPEU, has had to take the new situation in its diplomatic, political and economic dimensions into consideration. View Article
European Commission: 2022 Strategic Foresight Report: twinning the green and digital transitions in the new geopolitical context : In light of Russia's aggression against Ukraine, Europe is accelerating its embrace of climate and digital global leadership, with eyes firmly on key challenges, from energy and food, to defence and cutting-edge technologies. View Article
The 2022 ECB Forum on Central Banking “Challenges for monetary policy in a rapidly changing world” : At the 2022 Forum we considered the challenges facing the euro area economy. Higher inflation, notably as a result of rising energy prices, pandemic-related supply shortages and the release of pent-up demand, has created a difficult and uncertain environment for central banks around the globe. View Article
BIS Annual Economic Report: No respite : While the after-tremors of the pandemic still reverberate, two new shocks hit home in the year under review: the unexpected resurgence of inflation and the tragic war in Ukraine. Last year's Annual Economic Report (AER) raised the prospect of a bumpy pandexit; bumps have turned out to be a one-two punch. View Article
Keynote speech by Commissioner McGuinness at the forum on protecting and facilitating investment in the single market : Everyone in this room and online shares a key goal – and that is to facilitate investment in the single market – we may differ on how to achieve that goal – but I think we are clear about the target. View Article
Banking Union
New EU Authority for Anti-money laundering: Council agrees its partial position : In its position, the Council adds powers to the Authority to directly supervise certain types of credit and financial institutions, including crypto asset service providers, if they are considered risky. View Article
ECB blog - Anneli Tuominen: Euro area banks’ resilience : Euro area banks have emerged from the pandemic largely unscathed, mainly due to the unprecedented support from governments, central banks, regulators and supervisors. View Article
Speech by Andrea Enria, Chair of the Supervisory Board of the ECB, at the SRB and ECB Joint Conference "The test of time: banking union a decade on : The banking union, and its institutions under the first and second pillars, have therefore been operational for much less than a decade. Yet they have already left their mark. View Article
EBA observed an increasing encumbrance ratio in 2021 albeit with some signs of stabilisation : Following the outbreak of the COVID-19 pandemic, the encumbrance ratio continued an upward trend but remained roughly stable in the second half of 2021. View Article
Capital Markets Union
ESMA updates on applications for recognition from U.S.- based CCPs : The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has announced its recognition of two central counterparties (CCPs) established in the United States (U.S.) as Tier 1 CCPs under the European Market Infrastructure Regulation (EMIR). View Article
ESMA: Overview of planned consultation papers 2022 : Cooperation and transparency are important for ESMA. ESMA therefore promotes strongstakeholder engagement with entities and individuals impacted by ESMA’s activities. In linewith the ESMA Regulation, ESMA conducts public consultations on proposed technicalstandards and guidelines. View Article
CEPS: Taking stock of the MiFID and MiFIR review and what still needs to be done : The European Commission’s proposal for a consolidated tape of real time market prices for securities is taking up a lot of energy for data providers and the European Securities and Markets Authority (ESMA). Yet it may not be a game changer on the road towards Capital Markets Union (CMU). View Article
ESAs refer stakeholders to Commission statement on the application date of new PRIIPs rules : The ESAs expect National Competent Authorities to take the Statement from the European Commission into account during their supervision of PRIIPs. View Article
IMF blog: Capital Markets Regulation Is Stronger, but Some Gaps Still Must be Closed : Countries have made substantial progress toward implementing capital markets regulatory reform, but important gaps remain and new challenges have raised the bar. View Article
ICMA response to ECB on potential in interest in central bank money settlement of wholesale transactions : ICMA's response to the ECB questionnaire on financial market stakeholders’ potential interest in the Eurosystem providing EUR central bank money settlement of wholesale transactions in the payments, securities settlement and collateral management domains View Article
Environmental, Social, Governance (ESG)
ESMA publishes results of its Call for Evidence on ESG ratings : ESMA received a total of 154 responses and found 59 ESG rating providers currently active in the EU. View Article
EBF final response – ESG Ratings 2022 : The European Banking Federation responded to the EC Targeted Consultation on the functioning of the ESG ratings market in the European Union and on the Consideration of ESG factors in credit ratings. View Article
ICMA: The Principles announce key publications and resources in support of market transparency and development : The Green Bond Principles (GBP), Social Bond Principles (SBP), Sustainability Bond Guidelines (SBG) and Sustainability-Linked Bond Principles (SLBP) (the “Principles”) - the global standard for a $2.4 trillion market, ... View Article
AFME recommends co-legislators focus on original objectives of EU Green Bond Standard : In light of the ongoing interinstitutional negotiations (trilogues) on the EU Green Bond Standard (EU GBS) proposal, the Association for Financial Markets in Europe (AFME) has today published a paper highlighting 6 priorities to fulfil the objectives of the EU GBS framework and to support the establishment of an effective and successful market for EU Green Bonds. View Article
Ethical Boardroom: Convergence of global sustainability reporting standards : ... it is precisely the growing focus on sustainability that has thrust sustainability reporting into the spotlight, with several game-changing developments in 2021 – which carry on into 2022. View Article
GRI: GRI and ISSB provide update on ongoing collaboration : Technical representatives from GRI and the International Sustainability Standards Board (ISSB) begin work on delivering the agreed MOU View Article
IPE: Investor groups welcome deal being struck on EU CSRD, next stop standards : Investor groups have welcomed a deal being struck on EU sustainability reporting rules for corporates, although German fund manager trade group BVI noted that “a drop of bitterness” was that the obligations will apply later than planned View Article
Irish Funds publishes paper on EU Sustainable Finance Duties for Fund Management Companies : Irish Funds has published a paper that provides practical insights as to how fund management companies (FMCs) can comply with sustainable finance related requirements set out in delegated acts amending the UCITS Directive and the Alternative Investment Fund Managers Directive. View Article
Protecting Customers
InsuranceEurope: EC efforts to improve consumer rights compliance welcome; : To achieve good consumer satisfaction and outcomes, consumers should have access to effective and efficient dispute settlement mechanisms at little or no cost. View Article
Fin Tech Regulation
EBF Position paper on the proposal for a Regulation on harmonised rules on fair access to and use of data (Data Act) : A European data economy which unlocks new opportunities for customers – individuals and firms – through increased access to and sharing of data is a priority that the European banking sector welcomes in the process of its own continuing digital transformation. View Article
The EFR published its position paper “Artificial Intelligence” : The financial industry fully agrees on the potential of AI and the need to have a strong leadership in the adoption and development of AI in the EU to stay competitive at global level. View Article
CEPS: How to unlock the potential for instant payments : The ongoing digitalisation process is amplifying the importance of electronic payments for the functioning of the European economy. In response, the European Commission has stepped-up its ambitions to create an integrated payment system and to increase the autonomy of existing means of payments. View Article
Economic Policies Impacting EU Finance
BETTER FINANCE response to the EU Commission Consultation on the New EU System for the avoidance of double taxation in the field of withhold : Individual, non-professional (“retail”) investors are significantly demotivated or hampered from investing cross-border within the EU due to: View Article
ALFI responds to the public consultation of the EC on a new EU system for withholding taxes : ALFI welcomes the publication of the public consultation on a new EU system for the avoidance of doubletaxation and prevention of tax abuse in the field of withholding taxes and is pleased to hereby provide itsviews in this respect. View Article
Withholding Taxes - EFAMA comments on EC public consultation : EFAMA generally supports the Commission’s Code of Conduct on WHT as well as all the efforts of the Commission to launch the CMU and all related initiatives to remove tax barriers within the EU. View Article
Insurers welcome proposals for new EU system to avoid double taxation; call for refinements and clarifications : Insurance Europe takes the view that substance requirements should be harmonised, and that the Parent-Subsidiary Directive and the Interest and Royalties Directive should be clarified to ensure legal certainty regarding securities and intra-group payments. View Article
Brexit and the City
TheCityUK: Financial and professional services show strong pandemic recovery : The UK-based financial and related professional services industry rebounded strongly last year despite the ongoing challenges following the global pandemic, according to the latest annual ‘UK Key Facts’ report from TheCityUK. View Article
UK Parliament: Treasury Sub-Committee investigates ‘Strong and Simple’ Framework proposals : The Treasury Sub-Committee on Financial Services Regulations calls for views on the Prudential Regulation Authority’s (PRA) ‘Strong and Simple Framework’ proposals. View Article
EU-UK Forum: Post Brexit regulatory reform plans increase for UK financial services, but delivery questions remain : The main aim of the Financial Services and Markets Bill (FSMB) is to utilise the UK’s post Brexit control of its financial services regulation to develop a regulatory framework tailored to the needs of the UK economy. View Article
Brexit
Speech by Vice-President Maroš Šefcovic at Bloomberg on EU-UK relations : ... the EU cannot – and will not – accept this delicate balance being unilaterally and illegally disapplied because of an outright U-turn by the UK government... the Protocol embodies trust. Trust in the political process. Trust between the EU and the UK. Trust in international agreements. View Article
Bloomberg: Britain’s Battered Economy Is Sliding Toward a Breaking Point : Boris Johnson’s government faces deep economic problems; UK lagging behind major peers on productivity and investment View Article
UKandEU: The Economics of Brexit: What Have We Learned? : A new eBook, produced by VoxEU/CEPR and UK in a Changing Europe, brings together leading academic researchers on trade, immigration and political economy to assess what we have learned, 18 months on from its implementation, about the impacts of Brexit on the UK economy. View Article
UKandEU: David Lamy MP - Labour's vision for Britain in the world after Brexit : What happens on the European continent is fundamental to our security and our prosperity. We share mutual interests and democratic values with our European partners. View Article
UKandEU: The state of the UK-EU relationship : Uncertainty has been a recurring theme in the EU–UK relationship since 2016. View Article
FT: Northern Irish businesses fear effects of rewriting Brexit trade deal : Protocol that keeps region within EU’s single market for goods has given a fillip to its economy, say analysts View Article
CER: Four reasons why the UK’s Northern Ireland Protocol bill is a mistake : The UK promises to “fix” the Northern Ireland protocol with unilateral legislation. This will be a major step backwards in trying to resolve genuine practical problems under the protocol. View Article
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