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14 January 2010

This week in "Brussels" + podcast

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Financial Services Policy Banking Securities
Asset Management Corporate Governance/Accounting Competition: Financial Services
Edited Minutes of key legislative Bodies Financial stability - policy analysis About this email

  Articles from 07 January 2010 - 14 January 2010

  Financial Services Policy

MARKT Commissioner-designate Barnier will not take orders from Paris or London, but will defend the European common interest
He said good regulation is urgently needed and encouraged the EP to restore the ESAs’ powers. Remuneration should involve ethics and avoidance of excessive risk taking. He has presented about 27 legislative proposals to the EP so the Commission agenda in financial services will be packed.  View Article
Central Bank Governors and Heads of Supervision reinforce Basel Committee reform package
They requested the Basel Committee to deliver a fully calibrated and finalized package of reforms by the end of 2010. The reforms cover IAS 39 fair value, capital buffers, systemic risk of banking institutions, contingent capital and liquidity.  View Article
FSB on the financial reform agenda: it is essential to raise the quality and level of capital in the banking system
FSB agreed to take forward the regulatory policy reform agenda and reaffirm the timelines for policy development and implementation in 2010. A framework for strengthening international standards, and reviewed current conditions in the financial system, was also agreed.   View Article
FSB consults on peer review on compensation practices within large financial institutions
The review will focus on the steps being taken or planned by FSB member jurisdictions to ensure effective application of the Principles and Standards, published in April 2009, as well as progress to date in implementation by significant financial institutions.  View Article
Joint Forum Report: Review of the differentiated nature and scope of financial regulation
This review was requested by the G20 through the Financial Stability Board. It analyses key issues arising from the differentiated nature of financial regulation in the international banking, securities and insurance sectors. It also addresses gaps arising from the scope of regulation.  View Article
IMF consults on possible financial sector tax as requested by the G20 last September
The IMF is beginning to examine policy options for how governments can recover public money used to support banks and other financial institutions during the economic crisis. Some form of financial sector tax is one of the options under examination.  View Article
ICMA's regulatory newsletter pays special attention to the Commission’s proposal on OTC
ICMA’s newsletter draws attention to the impact of new liquidity proposals on the ECP market; the impact on the primary markets of changes in the Prospectus Directive in the EU and the European Commission’s proposals for OTC derivatives, which may also have implications for corporate bonds.  View Article
CFTC Gensler calls for comprehensive reform to the over-the-counter derivatives markets
It is critically important that we bring transparency to this market, CFTC Chairman Gensler said. Standard over-the-counter derivative transactions should be moved into well-regulated clearinghouses.  View Article
IMF First Deputy Managing Director interviewed about the future report on financial sector rescues
Mr Lipsky leads the IMF group preparing a report on analyzing how to fund the direct financial sector support that could be required in a potential financial crisis. The final goal is to reduce systemic risk and improve burden sharing. It will be presented to the G20 next June.  View Article


The International Banking Federation calls for Colleges of Supervisors to better manage risk
The IBFed called on the Basel Committee to use colleges of supervisors to help tailor liquidity reporting requirements for individual banks. IBFed also said that this approach would improve the international stability of the banking system by cutting out much of the multiple reporting.  View Article
UK Treasury calls for more choice in business finance – proposals for reform to follow later this year
Work to increase options for UK businesses in need of non-bank finance is the subject of a discussion document released by the Treasury. The document focuses on a range of issues including credit assessment and monitoring of non-bank loan markets and high-yield bond markets.  View Article


FESE publishes the European Equity Market Report – an accurate comparison of trading statistics across trading venues
The report includes for the first time the data from all market segments operated by FESE members (including Regulated Markets and Multilateral Trading Facilities). It also includes all the major MTFs operated by investment firms in the European market.  View Article
FT: IOSCO pact reshapes market enforcement - easier to track bad actors across international markets
IOSCO has managed to reach a high level of information sharing among 63 countries on insider trading and market abuse. This seemed to be impossible four years ago when IOSCO asked all 115 securities commissions worldwide to share information.   View Article

  Asset Management

Hedge week: UCITS IV Directive is not bringing the operational cost reductions it was supposed to
According to an Ernst & Young survey, in a poll of 98 European investment fund participants, 49% said that business model alignment with UCITS IV is the biggest driver for improving their operating model. However, just 37% identified UCITS IV as cost efficiency.   View Article
European and North American pension funds consider shift back into property
A study conducted in December by Bfinance indicated that there is still a trend among the 63 schemes surveyed to move towards riskier assets, with 27% of those questioned planning to increase their target allocations to property over the next six months.  View Article

  Corporate Governance/Accounting

IAESB newsletter explains in detail the newly released Framework for International Education Standards for Professional Accountants
The intended benefits of the Framework include the development of International Education Standards which are consistent and a more efficient and effective standard-setting process. It will also increase transparency and accountability of the IAESB decision-making process.  View Article
2010 IFRIC meeting - IAS 39 still a remaining issue - fair value application and the bifurcation of an embedded foreign currency derivative
During the IFRIC meeting several issues were discussed, including IAS 32 Financial Instruments. Where there is a contractual obligation to deliver cash to the holder at the discretion of the issuer's shareholders, should preference shares be classified as a financial liability or as equity?   View Article

  Competition: Financial Services

Commission approves Hungarian liquidity support scheme for the financial system
The measure is appropriate, necessary and proportional to support the Hungarian financial system against the exceptional turbulence encountered by Hungarian banks in the midst of the global financial crisis, while limiting distortions of competition.  View Article
Future Competition Commissioner Almunia wants a "successful exit from the crisis" from a competition policy perspective
Spanish newspapers are reporting Almunia's competition priorities. These include an in-depth analysis of compensation issues for victims of monopolies, taking into account the desirability of avoiding the excessive number of disputes which have occurred in the United States.   View Article

  Edited Minutes of key legislative Bodies

Commissioner hearings: TAXUD Commissioner Šemeta wants to ensure quality of EU expenditure
Some of the proposals addressed by Lithuanian Commissioner-designate Algirdas Šemeta concern tackling fraud, reducing spending errors, improving Commissioners' code of conduct and harmonizing the corporate tax base and VAT calculation rules.  View Article
Commissioner hearings: COMP Commissioner Almunia wants everyone in the financial sector to respect state aid rules
Alumnia stated that competition policy should be applied rigorously while taking into account due process. Furthermore, the Commissioner-designate believes that cartels are the worst violation of competition law. He would also like to see a level playing field restored to the banking sector.   View Article
Commissioner hearings: ECFIN Commissioner Rehn calls for more economic co-ordination and unified international representation
He also called for a swift repair of the financial sector. A robust framework for promoting macro-financial stability must bring real steps forward in economic coordination. The euro area and the EU as a whole should speak with a single voice at the international level.   View Article

  Financial stability - policy analysis

Bruegel report on financial transaction tax to be used by the ECON Committee
The case for taxing merely to raise more revenues from the financial sector is not particularly strong. However, a tax on financial transactions could be justified in order to limit socially undesirable transactions. On that basis, the case for a very small tax on financial transactions is made.  View Article
ACCA publishes nine principles to achieve financial stability by 2020
ACCA provides useful principles to reach a healthier financial and regulatory world by 2020. The principles include a separation of retail banking from investment banking. The creation of a permanent secretariat for the G20 group of nations is also proposed.  View Article
Bruegel report on the EU’s role in supporting crisis-hit countries in central and eastern Europe
Zsolt Darvas looks at the role of the EU and its institutions in supporting crisis-hit CEE countries; the stabilising effects of the EU’s coordinated multilateral financial assistance; and the commitment shown by Western European banks to the region.  View Article
Centre for European Reform publishes 'How to Restore Financial Stability'
The report analyses the macro- and micro-economic causes of the crisis. It also examines how policy-makers have responded, arguing that the macro-economic causes of the crisis have been largely side-lined. It concludes by calling for a clearer sense of priorities in the reform process.  View Article
Nicolas Véron: EU has major challenges to confront
In a column for the Australian Financial Review, Nicolas Véron describes the successes and follies of the European Union in the aftermath of the crisis. His warnings include a restructuring of the banking industry and the creation of cross-border co-ordination mechanisms.  View Article
CEPS paper on comparing EU and US responses to the financial crisis
Karel Lanoo, Chief Executive of CEPS, writes that on the institutional side, the EU and the US seem to be moving in radically different directions, with (most likely) reduced powers for the Fed. However, on the regulatory side both blocs have recently started to converge as in CRAs or AIFM.  View Article



© Graham Bishop

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