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09 January 2009

This week in "Brussels"

Articles from 18 December 2008 - 09 January 2009

Presentation of the Czech Presidency work programme
The EU will have to give priority attention to a solution to the problems resulting from the financial crises. Implementing further steps to enhance transparency and stability of financial markets will be an important goal.  View Article

Czech Presidency Programme
The Czech Presidency will continue the work necessary to stabilize the financial markets and will implement the European recovery plan that has been recently outlined by the European Commission.  View Article

IIF forcasts growth revival for mid 2009
Policy makers need to address the unholy trinity of the financial crisis, namely funding pressure, losses on troubled assets and capital inadequacy, the IIF states.  View Article

SEC study on Fair Value Accounting Standards
The report recommends improvements to existing practice, including reconsidering the accounting for impairments and the development of additional guidance for determining fair value of investments in inactive markets.  View Article

FSA Japan – Report: Toward Building Reliable and Vibrant Markets
The Report includes the deliberations focusing on a framework for regulation of credit rating agencies, alliances among financial instruments and commodity exchanges, and the review of the disclosure systems.  View Article

FSA Japan publishes English versions of major relevant Acts
The translations are to be used solely as reference material to aid in understanding of Japanese laws and regulations.   View Article

BOJ cuts rates close to zero
The Bank of Japan cut its key interest rate to 0.1% from 0.3%. It will likely take some time for the necessary conditions for Japan's economic recovery to be satisfied, the BOJ decision reads.   View Article

Single Market Review: one year on
The progress report sets out the Commission strategy for the single market in 2009 and outlines a series of measures that have already been taken or are in the pipeline.  View Article

3L3 protocol on co-operation - update
The Committees have updated their protocol co-ordinating their joint 3L3 activities and agreed a formal procedure to facilitate the co-ordination of joint 3L3 activities.  View Article

3L3 joint Guidelines for mergers and acquisitions
The guidelines define co-operation arrangements amongst supervisors from across financial sectors, in order to ensure an adequate and timely flow of information between them.    View Article

BIS consults on principles for sound stress testing
Drawing on the lessons for banks and supervisors emerging from the crisis, this paper presents sound principles for the governance, design and implementation of stress testing programmes at banks.  View Article

OECD: Deposit insurance coverage gives rise to moral hazard
The article highlights the need for policy makers in the coming months to focus on “exit strategies”, especially where unlimited guarantees have been extended.  View Article

EPC calls for action on counterfeit cards
The EPC released a set of recommendations designed to counteract card skimming at ATMs outlining a set of minimum standards and suggesting the establishment of a certification scheme for independent testing and validation.  View Article

Commission encourages applications for Payment Systems Market Expert Group
PSMEG will assist the Commission in the preparation of legislative acts or policy initiatives and will be chaired by the Internal Market and Services DG of the European Commission.  View Article

Basel Committee broadens mandate of implementation group
The mandate of the Accord Implementation Group will be renamed to the Standards Implementation Group (SIG), and will concentrate on implementation of Basel Committee guidance and standards more generally.   View Article

CEBS report on custodian banks
CEBS finds that where custodian banks internalise settlement activities, some recommendations relating to the design of the clearing and settlement system are not or only partially met by the CRD.  View Article

FSA proposes to extend short-selling disclosure regime
The FSA proposes  retaining the disclosure obligation until 30 June 2009, but allowing the short-selling ban to expire on 16 January.  View Article

AMF and BaFin extend short selling measures
The French AMF maintains its measures on short-selling of financial sector securities. Also, the German BaFin decided to extend the date for prohibiting naked short-selling.  View Article

CESR Q&A on MiFID - 2nd updated version
CESR published the second set of questions and answers on MiFID: Common positions agreed by CESR Members.  View Article

Liffe and LCH Clearnet launch CDS clearing
Liffe becomes the first exchange to offer clearing of CDS contracts offered via Bclear.   View Article

CESR list on short-selling measures – update 6 January
CESR updated the list of measures recently taken by Members regarding short-selling.  View Article

CESR call for evidence on the regulation of short-selling
CESR is inviting all interested parties to submit views as to what CESR should consider in its further work in the area of short-selling at short, medium and long-term.  View Article

CESR preliminary draft technical advice on access and interoperability arrangements
CESR concluded the mapping exercise on the regulatory and supervisory arrangements for post-trading infrastructures in all CESR members jurisdictions.  View Article

CESR consults on non-equity markets transparency
CESR believes that there would be value for market participants in receiving access to greater post-trade information.  View Article

CEIOPS report on financial stability of insurance market
The financial position of the defined benefit occupational pension fund sector is coming under increased pressure, the report finds. However, direct exposures to structured credit products remain limited.  View Article

IASplus: Report on IFRS for investment funds
The report points out that an IFRS conversion is not primarily an exercise in reshuffling the chart of accounts, nor is it principally a technical accounting and financial reporting matter.  View Article

AMF Regulation and Asset Management Newsletter - 4th Quarter 2008
The newsletter focuses on the modernisation of the French investment fund legislation and contains articles on aspects such as UCITS and short selling.  View Article

Commission consultation on hedge funds
The consultation will contribute to European and international reflections on whether the approach to the regulation and supervision of hedge funds should be reassessed in light of the financial crisis, the Commission notes.  View Article

OECD: Pension fund losses highlight need for private pension reform
By October 2008, the total assets of private pension plans in OECD countries had declined by nearly 20% of their value compared to December 2007, underlining the urgent need for further reforms of private pension systems.  View Article

AMF recommendation regarding financial statements for 2008
The principal themes include the consequences of the financial crisis, structural transactions, and new standards and interpretations.   View Article

IASB and FASB announce membership of Financial Crisis Advisory Group
IASB and FASB announced the membership of the Financial Crisis Advisory Group set up by the boards to consider financial reporting issues arising from the global financial crisis.   View Article

CESR statement on the reclassification of financial instruments
CESR has considered the issues on fair value option and concludes among others that there is a need to examine the effects of the use of the fair value option in more detail within a short timeframe.  View Article

EFRAG draft comment on amendments to IFRIC 9 and IAS 39 - Embedded Derivatives
EFRAG has issued its draft comment letter and suggests some changes to the proposed amendments.   View Article

IASB consults on amendments to IFRS 7 - investments in debt instruments
The proposals provide additional disclosures on all investments in debt instruments, other than those classified in the fair value through profit or loss category.  View Article

EFRAG draft letter on IAS 24 'Relationships with the State'
EFRAG disagrees to extend the definition beyond that proposed in the previous ED and identifies problems in practice that may arise from the definition of a ‘state’.  View Article

IASB proposes amendments to clarify the accounting for embedded derivatives
The proposals would require all embedded derivatives to be assessed and, if necessary, separately accounted for in financial statements.  View Article

IASB provides update on steps taken in response to the global financial crisis
The IASB issued a list of actions taken to address recommendations made by the G20 leaders and an outlook on future measures envisaged in 2009.   View Article

EDHEC survey - changes in accounting standards lead to new problems
EDHEC considers that a return to accounting at historical cost would be mistaken. It would only prolong the crisis, much as it prolonged the Japanese banking and financial crisis.  View Article

IASB and FASB propose joint approach for revenue recognition
The IASB and FASB are consulting on a discussion paper setting out a joint approach for the recognition of revenue.  View Article

EFRAG draft letter on amendments to IFRS 7
EFRAG believes the IASB should not proceed with the amendments at the pace and with the implementation timetable that is proposed.   View Article

EFRAG final Letter on 'Simplifying Earnings per Share'
EFRAG recommends deferring further work as the IASB and the FASB are currently involved in a joint project on distinguishing equity from liabilities.  View Article

IASB consultation on ED 10 on Consolidated Financial Statements
The IASB published for comment proposals to strengthen and improve the requirements for identifying which entities a company controls.  View Article

Commission approves Italian recapitalisation scheme for financial institutions
The Italian recapitalisation measures provide for the possibility for Italy to subscribe subordinated debt instruments, to be counted as bank core tier 1 capital. The global budget will be around €15 - 20 billion.  View Article

Commission approves modifications to UK financial support measures
The amendments mainly concern the fee payable on guaranteed liabilities and the widening of the range of currencies in which the guaranteed instruments can be issued.   View Article

Commission approves German banking rescue aid for NordLB
The Commission approved the guarantee package Germany intends to grant to NordLB to cover the bank's medium-term refinancing needs in the financial crisis.   View Article

Commission approves state support for IKB
The Commission approved the support guarantee to IKB to cover the bank's medium-term refinancing needs. The support aims to ensure that IKB's restructuring is not impeded by insufficient liquidity.   View Article

Commission approves Latvian support scheme for banks
The guarantee will cover all liabilities with the exception of interbank deposits, subordinated liabilities and collateralised liabilities such as covered bonds which have a maximum maturity of three years.   View Article

Commission approves Spanish guarantee scheme for credit institutions
The state guarantee would cover, against remuneration, the issuance of notes, bonds and obligations admitted to the official secondary market in Spain.   View Article

Commission approves state support for BayernLB
The Commission approved the capital injection and a risk shield that the Freistaat Bayern intends to grant to BayernLB. BayernLB obtains a core capital increase of €10 billion and a risk shield for an amount of €4.8 billion.   View Article

Commission approves recapitalisation of Belgian KBC Group
The Commission approved the emergency recapitalisation package the Belgian authorities intend to grant to KBC Group via a special type of securities worth €3.5 billion.   View Article

© Graham Bishop

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