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10 December 2009

This week in "Brussels" - with Podcast

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© 2009Jump directly to articles on:-
Financial Services Policy Insurance Asset Management Corporate Governance
Competition: Financial Services Edited Minutes of key legislative Bodies Financial stability - policy analysis  
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Articles from 03 December 2009 - 10 December 2009
Financial Services Policy Back to top 

ECON Members’ visit to Madrid regarding exit strategies and the future financial supervisory arrangements
'Internationally, regulatory arbitrage is hard to eliminate, but in the EU we can remove supervisory arbitrage. Enhancing effective day-to-day supervision should be the focus of our work', Sharon Bowles, ECON chair, said.  View Article

Commissioner Almunia: Greece attracts attention of financial markets and rating agencies
FT says Fitch has slashed rating on Greek debt to BBB+ – first time in 10 years leading CRA has rated Greece below A grade. Standard & Poor’s may do the same. EU authorities keen to put pressure on Athens to step up efforts to reduce deficit.   View Article

Audit Office report on maintaining financial stability across UK banking system
Given scale of economic and social costs if one or more major banks had collapsed, public support provided to UK banks was justified. Total public support £850 billion, but final cost to taxpayers will not be known for a number of years.   View Article

ECON Committee Chair tells British Bankers’ Association some banks will have to curb bonuses
MEP Sharon Bowles: ‘Countries have pledged several times their GDP to support banks in order that their economies survive. In the UK, the taxpayer has stumped up around £200bn to help bail out the banks’.   View Article

UK Pre-Budget Report: bashing bankers and consulting on concrete plans to promote financial markets
The PBR includes plans to improve MBS, stimulate non-bank lending channels, commence a new regulatory framework for recognised inter-bank payments systems and promote financial education. It also covers bond markets.  View Article

FSA feedback statement on remuneration – limited application of Code to large banks, building societies and broker dealers
The Statement on Reforming Remuneration Practices in Financial Services explains how and why the FSA has decided not to extend the Remuneration Code to other FSA-authorized firms. However, the FSA lays out plans for further intervention in that area.  View Article

ECON committee dialogue with Trichet – EP does not support ECOFIN-adopted conclusions on ESAs
Trichet: ECOFIN ESA decision not first best. However, considering complexity of the topic and sensitivity of different governments, the Swedish Presidency had done a good job. He also said difficult decisions have to be taken with regard to Greece.  View Article

FT comments on Barnier: he promises to stick to G20 guidelines
He told the Financial Times he did not intend to propose rules that went beyond the G20 framework. Wolfgang Munchau notes Barnier will be in charge of two of the EU’s most difficult political tasks: strengthening both the single market and financial regulation.  View Article

Eurofinas’s comments on Commission Consultation responses on responsible lending and borrowing
Respondents are concerned whether responsible lending/borrowing has an EU dimension. On the issue of credit intermediaries, Eurofinas believes in a differentiated approach between brokers, agents and dealers/retailers involved in credit distribution.  View Article

Bernanke reiterates supervisory approach for systemically important financial institutions
Not just banks but all systemically important financial institutions should be subject to strong and comprehensive supervision on a consolidated, or firm-wide, basis. They should be subject to tougher capital, liquidity, and risk-management requirements than other firms, he said.  View Article

Sobel calls for consistent supervision and regulation of financial institutions
Although there is a high degree of cooperation between the U.S. and the EU, the devil is in the detail when it comes to translating high-level standards into concrete proposals, in particular, with regard to CRAs, hedge funds, and the treatment of OTC derivatives, he warned.  View Article

US Financial Services Committee completes work on new rules for financial system
The new rules create an inter-agency oversight council that will identify and regulate financial firms that are so large, interconnected, or risky that their collapse would put the entire financial system at risk.   View Article


Insurance Back to top 

CEIOPS publishes second bi-annual Financial Stability Report for insurance and occupational pensions
CEIOPS has found that the insurance industry as a whole continues to face a number of risks, of which the most prevalent are financial. These include the risk of low - or even decreasing again - interest rates, as well as risks related to depressed equity markets.  View Article


Asset Management Back to top 

Interview with MEP Gauzès, rapporteur on hedge fund directive – not intended to demolish the financial industry
Gauzès said that hedge funds are a particular category of funds that invest in operations, but which can be removed quickly, seeking profit. They are not necessarily pointless for the economy, but are speculative and, therefore, risky.   View Article

EVCA research paper shows impact of crisis on funding for European business
It demonstrates how private equity firms have changed focus from financing new deals to supporting companies in their portfolios through the recession. The most active regions in investments by amount this year have been the UK and Ireland.  View Article


Corporate Governance Back to top 

EFRAG Final Comment Letter on Part II of IASCF Review of the Constitution - proposals for enhanced public accountability
EFRAG believes IASB should have a public consultation on IASB work plan and that the proposal to introduce mandatory consultation about the agenda with Trustees and SAC doesn't go far enough. Adoption of high quality global standards to be emphasized.  View Article

CESR comments on EFRAG letter on IASB Exposure Draft Rate-Regulated Activities – international co-operation needed
In order to achieve a level playing field in financial reporting, CESR wants IASB to work with US FASB and other standard-setters to find robust grounds on which the recognition of regulatory assets and/or regulatory liabilities can be based.  View Article

Joint FEE-EFRAG paper: Impairment of Financial Assets – The Expected Loss Model – better understanding of IASB impairment model
Provides detail on context of recent IASB proposals. It gives a general description of the expected loss model, as well as the kind of information generated by the model and a comparison of that specific model with other kinds of impairment models.   View Article

CESR gathers international supervisors to discuss worldwide enforcement of IFRS
A global dialogue is needed in order to underpin both investor confidence and understanding of the impact that the financial crisis could possibly have had on the financial performance of a company, the enforcers of IFRS from 33 countries said.  View Article


Competition: Financial Services Back to top 

Commission approves Slovak bank support scheme – potential beneficiaries include subsidiaries of foreign financial institutions
Slovakia committed to implement state capital contributions and state guarantee measures only during a maximum period of six months after scheme’s approval by the Commission. The measures provide safeguards to prevent the aid from being misused.   View Article

State aid: Scoreboard shows strong increase of aid in response to financial crisis
The latest State Aid Scoreboard shows that total crisis support reached € 3361 billion. The timely and coordinated action by member states and the Commission contributed to safeguarding financial stability, the report said.  View Article


Financial stability - policy analysis Back to top 

Discussion paper on the role of the financial sector - possible options to reduce cost to taxpayers of financial sector failures
Highlights the importance of financial sector to UK economy alongside risks posed to society. While some risk-taking is inherent in financial sector operations, recent crisis shows high cost to taxpayers when risk-taking becomes excessive.   View Article

IIF report on reforming Financial Services Industry: strengthening practices for a more stable system
The Institute of International Finance makes clear in its report that strengthening risk management is a top priority. Specific areas of improvement include governance and transparency, stress testing, liquidity risk management, risk measurement and risk-aligned compensation.  View Article




© Graham Bishop

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