(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 18-24 November 2022
Policy impacting Finance
SUERF: The safe asset potential of EU-issued bonds : Currently, one obstacle to EU bonds achieving a genuine euro-denominated safe asset status, approaching that of Bunds, lies in the one-off, time-limited nature of the EU’s Covid-19-related policy responses.
Banking Union
Bruegel: Completing Europe’s banking union: economic requirements and legal conditions : This contribution analyses the deficiencies of the current framework and identifies possible responses, in line with three levels of reform ambition. Authors: Beck, Krahnen, Martin, Maye, Pisani-Ferry, Tröge, Weder di Mauro,Véron , Zettelmeyer
AFME: Funding to European corporates and SMEs at risk from Basel III regulatory changes finds new study : Notably, the study shows securitisations of large corporates and SME loans are likely to be severely negatively impacted, making them scarcely feasible. At the same time, securitisations of consumer loans, including residential mortgages, auto loans and other consumer loans, may be boosted.
Capital Markets Union
Keynote speech by Commissioner McGuinness at the European Fund and Asset Management Association (EFAMA) Investment Management Forum : Progress report on CMU
CFA: Investment Gamification and Implications for Capital Markets : Recommendations to Maximize the Benefits and Mitigate the Risks of Gamification
FESE: Policymakers must shape competitive EU financial markets to power the digital and green transitions : Proposed changes to the MiFIR Review miss their targets, to the detriment of investors, EU-global competitiveness, and the capacity of EU markets to finance the green and digital transitions
Environmental, Social, Governance (ESG)
EIOPA underlines its commitment to supporting the insurance and pensions sectors in tackling climate change : As the 2022 United Nations Climate Change Conference (COP27) draws to a close, the European Insurance and Occupational Pensions Authority underlines its commitment to supporting the insurance and pensions sectors in tackling climate change.
ISDA: The Way Forward For Sustainability-linked Derivatives : With the growth of sustainable investing, there is emerging demand for derivatives products that are linked to environmental, social and governance (ESG) goals. Although a nascent market, these products – sustainability-linked derivatives (SLDs) – have the potential to contribute to the green transition.
ICMA appointed by the FCA to jointly provide the Secretariat for a working group to develop a Code of Conduct for ESG data and ratings provi : The group has been tasked with developing a voluntary code of conduct for Environment, Social and Governance (ESG) data and ratings providers.
The Net-Zero Asset Owner Alliance’s statement on COP27 outcomes : The Net-Zero Asset Owner Alliance is encouraged by the international agreement to establish a ‘loss and damage’ fund. The fund will help the world’s most vulnerable in developing countries withstand and recover from the physical impacts of climate change, today and into the future. V
GRI: Beginning of the end for greenwashing? : Mandatory assurance of sustainability data is ‘only a matter of time’: The drive towards a comprehensive global system for sustainability reporting, which evenly addresses both impact and financial disclosure, will be a major instigator for mandatory auditing of sustainability information.
CEPS' Elkerbout: COP27 agreed compensation for loss and damage… but the fear is we’ll just end up seeing even more loss and damage : Not all COPs are made equally. After 2021’s COP26 in Glasgow – successfully hyped up by the Boris Johnson-led UK as a showcase of ‘Global Britain’s’ diplomatic mettle – COP27 in in Egypt was perhaps always fated to be a less significant one.
AFME/EY: ESG and the Role of Compliance : This report sets out observations on how compliance functions can support their firms in robustly and transparently managing the regulatory risks associated with Environmental, Societal and Governance (ESG).
AccountancyEurope: Comparing European corporate governance models - Survey results : This publication explores the different corporate governance systems based on a survey of 17 European countries. We identify significant differences in national legislation and practice to lay the groundwork for EU sustainable corporate governance initiatives to be well integrated into the national corporate structures.
Bloomberg: Capital Market Risks Trigger Calls for New Rules: ESG Survey : A Bloomberg survey shows Europeans are more in favor of enhanced environmental regulations than Americans, while Asians want more rules — period.
Protecting Customers
BETTER FINANCE: Council of the EU is the Last Hurdle to Tackling Conflicts of Interests in Retail Investment Services : The struggle against conflicts of interests and to deliver an adequate, high level of “retail” investor protection now hinges on the positions of representatives of the EU Member States (Council of the EU). BETTER FINANCE firmly advises the co-legislator not to hamper EU progress and to support the proposal to ban “kickbacks” that are detrimental to “retail” investors.
Fin Tech Regulation
Remarks by the IOSCO Fintech Task Force Chair at Singapore Fintech Festival - Applying and Adapting IOSCO Principles to Digital Asset Market : A mere one year ago from today, crypto-assets peaked at just over $3 trillion, but today about two-thirds of that value has been digitally erased and some are calling this a “crypto winter”.
UK Finance: Regulatory reporting for digital banks: how to stay creative, innovative but compliant with regulation : Digital (and challenger) banks come in all shapes and sizes. Some are offshoots of big tech companies, others are fintech startups, and yet others provide banking as a service (BaaS) to non-financial institutions via APIs
Digital New Deal: Report Finds ‘Algorithmic Audits’ Need More Clarity to Bring Accountability to AI : Authors recommend guidelines for designing and deploying audits of opaque AI systems to mitigate algorithmic harms to users and society.
Economic Policies Impacting EU Finance
Remarks by Executive Vice-President Dombrovskis, Commissioner Gentiloni and Commissioner Schmit at the press conference of the 2023 European : Commissioners' overview of the economic situation
Questions and answers on the 2023 European Semester: Autumn Package : Comprehensive package of economic analysis of the state of the EU economy
Brexit
POLITICO: Sunak’s Britain Is Starting to Have Second Thoughts About Brexit : UK leader denies he’d seek ‘Swiss-style’ ties with EU; Public opinion, experts now speaking out against Brexit
CITY AM: Sunak slaps down idea of Swiss-style Brexit deal to bring UK closer to EU : Rishi Sunak will not pursue a post-Brexit “Swiss-style” deal to bring the UK closer to the EU, the PM has said today. Sunak said he was “unequivocal on this” and that “under my leadership, the United Kingdom will not pursue any relationship with Europe that relies on alignment with EU laws”.
YouGov: One in five who voted for Brexit now think it was the wrong decision : The wider public now think Britain was wrong to leave the European Union by 56% to 32%
What UK thinks: Has Britain leaving the EU made the current economic situation generally better or worse, or has it made no real difference? : Worse 55% - Better 10%
FT: UK business leaders urge Sunak to seek better EU relations : Premier will face calls to soften impact of Brexit when he addresses CBI on Monday
Revoking EU law is a distraction and will create substantial uncertainty for business, says IoD : Such a review is likely to create a huge amount of uncertainty around the regulatory framework navigated by business. This is the last thing that business needs in such a fragile economic environment.
Federal Trust video: Hunting for Brexit Benefits : In this new Federal Trust video, Brendan Donnelly argues that Rishi Sunak and Jeremy Hunt realise Brexit is in trouble.
POLITICO: Britain’s trade honeymoon is over : Forging an independent trade policy was a key Brexit selling point — but now the rubber’s hitting the road. Forget the flag-waving Instagram posts — Britain’s post-Brexit trading dreams are coming back down to earth.