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08 October 2009

This week in "Brussels"

© 2009Jump directly to articles on:-
Financial Services PolicyBankingSecuritiesInsurance
Corporate GovernanceCompetition issues in financial ServicesEdited Minutes of key legislative BodiesFinancial stability - policy analysis
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Articles from 01 October 2009 - 08 October 2009
Financial Services Policy Back to top 

FSA chairman outlines factors for successful European regulation
The ability of the proposed European Systemic Risk Board to develop good quality risk analysis and the “willingness of politicians to take its warning seriously and to countenance potentially unpopular responses” will be a key factor.  View Article

'Istanbul Decisions' to guide IMF as countries shape post-crisis world
IMF head tells policymakers from 186 countries that, though global cooperation had contained the recent financial crisis, the world must cooperate even more to build a post-crisis world and that it must take advantage of the current “momentum”.  View Article

Commissioner Almunia: crisis highlights urgent need for deeper and broader macro-economic coordination and surveillance in euro area.
The euro has protected the euro area from the exchange and interest rate turbulences of past crises and acted as an anchor of sound macro-economic policies for Member States wishing to adopt the euro, or whose currencies are linked to it.  View Article

Special European Parliament committee on financial and economic crisis
MEPs agreed today to set up a special committee on the financial and economic crisis with 45 members and a 12-month mandate. It will assess the extent and impact of the crisis on Member States and propose measures to rebuild stable financial markets.  View Article

Wolf Klinz on EP special committee to tackle the financial crisis
Wolf Klinz explained that this committee should have been set up in Autumn 2008 after the Lehman collapse, when the full scope of the crisis became visible. Due to the EP elections, the decision to set it up only took place after July.  View Article

Bundesbank's Weber: efficient implementation of the EU regulatory and supervisory package proposed by de Larosière.
Strengthening supervisory powers at EU level is important but these reforms absolutely must be aligned with global initiatives, given that major European banks are also acting globally.   View Article

Trichet: regulatory/supervisory reform in Europe must address moral hazard stemming from the automatic rescue presumption
Legislative proposals should fully reflect ongoing work at international and EU level aimed at enhancing the resilience of the financial system and protect consumers and investors against the impact of excessive risk taking.  View Article

FSA finalizes far-reaching overhaul of UK liquidity regulation
Making banks self-insure forces them to internalize more of the costs that they periodically put upon taxpayers. Banks will find it harder to generate profits by taking on extreme liquidity risks, believing they will be bailed out in a crisis.   View Article

SEC approves new exchange rules for breaking clearly erroneous trades
In general, the new rules allow an exchange to consider breaking a stock trade only if the price exceeds the consolidated last sale price by more than a specified percentage amount.  View Article

Banking Back to top 

UK online banking losses continue to climb
The UK financial services industry experienced banking fraud losses totalling £39 million in the six months to June 2009, amounting to a 55 per cent spike, as cybercrooks adopted more sophisticated tactics to dupe consumers.  View Article

Private banks reach out to the less wealthy
According to Switzerland's largest dedicated wealth manager, a key reason why private banks are softening their stance and reaching out to the less wealthy is the fact that many have lost money in the past year.  View Article

BBA statement on FSA liquidity review: it will harm banks
The FSA must avoid at all costs ‘choking off’ economic recovery by curtailing banks' ability to lend. These proposals would oblige banks to hold high amounts of government bonds, rather than allow them to diversify their assets.  View Article

Securities Back to top 

Autorité des Marchés Financiers responds to the European Commission communication "Ensuring efficient, safe and sound derivatives markets"
As derivatives markets are global and are markets in which American and European participants play a predominant role, it is important that the directive for these markets is drafted with a coordinated view.   View Article

Insurance Back to top 

European Insurers Association calls on EC for full renewal of Insurance Block Exemption Regulation.
Following the European Commission's recent announcement of a final public consultation, the CEA is opposing the Commission’s proposal not to renew the sections of the BER covering standard policy conditions (SPCs) and security devices.   View Article

FSA and firms reach agreement on MPPI
The Financial Services Authority and Mortgage Payment Protection Insurance (MPPI) firms have agreed an industry-wide package of measures for consumers, including refunds of around £60 million.  View Article

Commission publishes consultation report on the revised draft Block Exemption Regulation for the insurance sector
The Commission's findings also show that neither agreements on standard policy conditions nor agreements on security devices appear to be specific to the insurance sector. Standard policy conditions are also agreed in other sectors including banking.  View Article

Corporate Governance Back to top 

Banker/IFAC survey shows small business lending holds steady; accountants play key role in lending decisions
The survey results confirmed the critical role that accountants play in providing information which influences lender decision-making. Only 2 per cent of respondents said they would restrict loans to SMEs.  View Article

IASB issues amendment to IAS 32 Financial Instruments: Presentations
The amendment addresses accounting for rights issues (rights, options or warrants) that are denominated in a currency other than the functional currency of the issuer. Previously such rights issues were accounted for as derivative liabilities.  View Article

CEBS comments on the European Commission's consultation on the adoption of ISAs
CEBS supports the adoption of ISAs at EU level and believes that add-ons would be acceptable to the extent that they stem from specific national legal requirements relating to the scope of statutory audits.   View Article

IAASB releases new tools to support clarity in ISA implementation
This new resource includes modules that provide an introduction to, and an overview of, the clarified ISAs. These modules address auditing accounting estimates, including fair value estimates and communication with those charged with governance.  View Article

Competition issues in financial Services Back to top 

State Aid: Commission approves Dutch export-credit insurance scheme
Under the notified scheme, the State will provide a reinsurance facility which would top up the cover offered by credit insurers in cases where the existing credit limits have been reduced.  View Article

Commission recalls rules concerning Tier 1 and Tier 2 capital transactions for banks subject to restructuring aid investigation
Following questions from market operators, the Commission recalls its July 2009 Communication stipulating that "banks should not use state aid to remunerate own funds (equity and subordinated debt) when their activities do not generate sufficient profits”  View Article

State aid: Commission approves temporary additional aid to German Landesbank WestLB
The aid measure amounts to €6.4 billion and is provided by SoFFin, a fund administrating the German support scheme for financial institutions. WestLB is currently in the process of implementing a restructuring plan.  View Article

Commission grants extension of deadline for implementation of remedies to Fortis Bank Nederland and ABN AMRO Bank Nederland
Commissioner Kroes remarked that there are good prospects for the imminent divestment of HBU to the most active bidder; the Commission has decided to grant an extension until 19th October to allow negotiations to conclude on the essential terms of the sal  View Article

Edited Minutes of key legislative Bodies Back to top 

ECON Committee – 06 October 2009 - AIFM exchange of views
The second exchange of views on the Alternative Investment Fund Manager has highlighted the divisions and difficulties that this debate implies. Wolf Klinz remarked that hedge funds represent just one seventh of the funds which are affected by this direc  View Article

Financial stability - policy analysis Back to top 

Hans Hoogervorst, Europe’s reform of financial supervision is headed in the right direction
The lesson is clear: a public safety net of central bank lending and government intervention in the financial sector is of course necessary. But the moral hazard it creates must be counter-balanced by strong regulation and adequate supervision.  View Article

ECB Gertrude Tumpel-Gugerell: recent advances in modelling systemic risk using network analysis
The European Systemic Risk Board will be established with the mandate to map financial risks and their concentration at the system level for the macro-prudential supervision of systemic stability.  View Article

Goldschmidt: Too big to fail? Maintaining a single market and fairness between bigger versus smaller EU members
A proper resolution mechanism should not discriminate against banks from smaller states: There is a basic contradiction between an EU single market for banking services and a Member State-based “resolution mechanism”.   View Article

© Graham Bishop

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