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21 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 Brief Opinions Financial stability - policy analysis
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  Articles from 14 January 2010 - 21 January 2010

  Financial Services Policy

Spanish Prime Minister presents the EU presidency work programme - special focus on the reform of the European financial market
Mr Zapatero affirmed that his main concern will be to consolidate the economic recovery. On financial services policy, the Presidency will increase its efforts to negotiate the CRD and to foster an agreement within the Council to negotiate the AIFMD with the European Parliament.   View Article
ECOFIN Council conclusions on Commission report on Greek government deficit and debt statistics
The Council urges the Greek government to ensure independence to the Statistical Authority and more generally improve the institutional setting for the generation of national data. There is a need to put in place transparent working practices between the various Greek institutions.  View Article
Greek Stability and Growth Programme update presented to EU Council
Greece has to face a double challenge: (1) to consolidate the country’s fiscal position through effective fiscal and structural policies aimed at reducing the budget deficit and lowering the public debt to GDP ratio; and (2) securing the conditions for economic development in the years to come.   View Article
Head of IMF warns of threats to recovery; stimulus is still required
Though the global economy is recovering from the international financial crisis faster than expected, Dominique Strauss-Kahn is concerned that growth is still largely driven by government stimulus measures. Countries risk a return to recession if anti-crisis measures are withdrawn too soon.  View Article
ECB and Commission launch assistance programme for supervision of EU candidates
The ECB and European Commission have signed an agreement to implement a technical assistance programme for EU candidates and potential candidates. The aim will be to strengthen macro and micro-prudential supervision in the Western Balkans and in Turkey.  View Article
Commission consults on tying and other unfair commercial practices in the retail financial service sector
The study finds that the reasons for financial institutions engaging in cross-selling practices are commercial strategy, risk reduction and cost efficiency. Consumers are seen as having no choice but to purchase products tied to conditional access.The Commission wants to avoid this happening.  View Article
G20 and FSB split on scale of financial reform Jong-Goo Yi, Standing Commissioner of the Financial Services Commission for South Korea, believes disagreement between the two camps is likely to result in a "hard fought" battle, but he hopes the next G20 summit in Seoul will "give some concrete guidance on that".  View Article
ECOFIN Council conclusions on strengthened mutual assistance for the recovery of taxes
The review directive on recovery of taxes will include the need to provide information held by banks and other financial institutions. It will provide for more flexible conditions for requesting assistance, requiring the spontaneous exchange of information.  View Article
Eurofinas believes the proposed Consumer Rights Directive is an ill-suited framework for the lending market
Eurofinas raises serious concerns on its application to financial services agreements. Instead of resolving regulatory fragmentation, the directive proposal, if ever applied to financial services agreements, would result in harmful complexity for all parties involved including consumers.  View Article
Paul Goldschmidt: disappointing Congressional hearings on the financial crisis
Paul Goldschmidt analyses the current debate in the US with regard to bankers and the financial crisis. He believes that the Congressional hearings will, unfortunately, contribute very little to clarifying the causes of the financial crisis and, on the contrary, prolong an atmosphere of distrust.   View Article
CFTC consults on regulations regarding retail FOREX transactions
The Commission is proposing a comprehensive scheme that would put in place requirements for registration, disclosure, recordkeeping, financial reporting, minimum capital and other operational standards.   View Article
IPE: CFTC proposals will affect few, if any, commodity investors
The CFTC proposals for position limits in energy market derivatives fall far short of the Draconian measures feared by traders. “Few, if any, passive index and speculative investors will be significantly impacted by the proposed position limits", a Commission offical said.  View Article
SEC proposes rule to reduce market access risks
The SEC is proposing a new rule which would effectively prohibit broker-dealers from providing customers with "unfiltered" access to the markets. It is also calling for comment on issues relating to high-frequency trading, co-locating trading terminals and dark pool trading.  View Article
Obama Bank Tax: We want our money back – and we’ll get it!
US President Barack Obama called on Wall Street to pay a fee of up to $117 billion to repay taxpayers money for the financial bailout. The so-called "financial crisis responsibility fee," would apply only to financial companies with assets of more than $50 billion.  View Article


BBA statement on US banking levy – UK and US measures differed widely
UK Banks are already repaying the taxpayer and the Chancellor said in his pre-Budget statement that he expects that investment to be fully repaid and, ultimately, to make a profit. The US adopted different mechanisms - such as purchasing distressed instruments from institutions.  View Article


ECB to set back T2S timetable to beyond 2013
Finextra: ECB is to delay the implementation of the T2S system, conceived as a mechanism for cutting cross-border trading costs through the creation of a streamlined pan-European platform for securities settlement against central bank money.   View Article
Eurex newsletter emphasizes G20 commitment to reach CCP clearing for all standardized OTC derivative contracts by end-2012
In February 2009, nine large trading houses committed themselves to the European Commission for clearing European CDS contracts. Eurex Clearing successfully completed the first CDS clearing cycle. During 2009 Eurex became the first European exchange to launch real estate futures contracts.  View Article
CESR updates FAQ on prospectuses
CESR introduces clarification on free offers: where securities are generally allotted free of charge, no prospectus should be required. CESR is seeking the Commission’s views on the correct legal basis for this conclusion.  View Article
CESR introduces new working structures to increase efficiency and prepare for a smooth transition to ESMA
To date, CESR’s work has been conducted by expert and operational groups. But from now it will be organised under eight standing committees (SCs), two panels, numerous taskforces and networks. New chairs have been appointed to lead the SCs’ work following the re-organisation,  View Article

  Asset Management

Spanish Presidency notes on AIFMD - follows work done by the Swedish Presidency
The aim of this Presidency document is to contribute to the debate by describing and comparing the options and solutions put forward by both institutions (Council and the Parliament) in order to find some common ground on the defining features of the regulatory model sought for AIFM.   View Article
CESR publishes consolidated information on UCITS depositary obligation for all 29 CESR Members
CESR maps the following areas: general criteria on the depositary, liability of the depositary when delegating custody functions, legal framework (administrative/civil), and due diligence requirements on depositaries when delegating.  View Article
EVCA response to the European Commission on its future EU 2020 Strategy
EVCA calls, among other things, for the Commission to rethink its policy strategy on venture capital. The aim should be to develop a self- sustaining and significantly larger European venture capital industry which can compete globally, both for investors and for new innovative investments.   View Article

  Corporate Governance/Accounting

Financial Reporting Council consults on stewardship code for institutional investors
The Stewardship Code can contribute to an improvement in the corporate governance of UK listed companies, following Sir David Walker’s report. The potential benefits are large, including greater clarity in the responsibilities of asset managers and asset owners.  View Article
FSA Lord Turner calls for close engagement between Accounting Standard-Setters and prudential regulators of banks
Speaking at a conference hosted by the ICAEW, Lord Turner argued that banks must be viewed differently from any other sector of the economy, including the rest of the financial sector. Accounting standards relevant to banks need to reflect these differences.  View Article
IPSASB publishes three new standards for accounting and disclosure of financial instruments
The new International Public Accounting Standards cover presentation (IPSAS 28), recognition and measurement (IPSAS 29) and disclosure (IPSAS 30) of financial instruments. These new IPSASs provide a coherent set of requirements that enhance accountability for financial instruments.  View Article
IAASB issues Q&A to raise awareness of XBRL uses in business reporting
IAASB recognizes the growing international use of Extensible Business Reporting Language (XBRL) - a language for the electronic communication of business and financial data that is changing business-reporting around the world. IAASB raises awareness about how XBRL-tagged data is prepared.   View Article
IFAC Survey shows accountants as advocates for small business and global standards
The Third Annual Global Leadership Survey of the International Federation of Accountants revealed its membership as vocal advocates for the adoption of global accounting and auditing standards. It also highlighted corporate governance enhancements in jurisdictions around the world.  View Article

  Competition: Financial Services

Commission requests Spain to limit aid given to savings banks
The Commission’s failure to approve the Spanish bank restructuring fund (FROB) has delayed the savings bank sector integration process. There are eight merger operations in progress. The two main mergers will be postponed until the Commission has ratified the FROB.   View Article

  Edited Minutes of key legislative Bodies

ECON Committee Chair Sharon Bowles comments on Designated Commissioner hearings
“All eyes were on Michel Barnier. There are some in the City of London who fear having a Frenchman in charge of the Internal Market portfolio”. The Liberal MEP believes both Michel Barnier and Joaquin Almunia have signed up to their 'pledges'.  View Article
Commissioner-designate for Health and Consumer Policy Dalli wants well informed consumers who can take educated decisions
MEPs questioned Mr Dalli on many consumer issues and this included the question of collective redress - potentially of great signifcance to financial services.  View Article
EP to vote soon on SWIFT agreement on bank data transfer
The EP will have the last word on the interim agreement on banking data transfers to the United States signed on 30 November. One of the MEPs’ concerns is the possibility of misuse of personal data, and they also want to allow access to data "on a case by case basis".  View Article

  Financial stability - policy analysis

Ruben Lee: The Governance of Financial Market Infrastructure
This report examines the governance of the three key types of infrastructure that underpin how markets operate – exchanges, central counter-parties and central securities depositories. It answers the two crucial questions: How are markets run? and, How should they be run?   View Article
Nicolas Véron: the jury is still out on EU's crisis performance
Nicolas Véron examines the EU's performance in reacting to the economic crisis. While the EU has had major difficulties in the wake of the crisis, he says that there have been several positive reactions to the creation of the world's first supranational financial authorities.  View Article
Twenty leading figures, including Lord Turner, give their views on the future of the UK financial services industry
The CBI/PwC report touches several issues including government intervention and banking. On Building Societies, Lord Turner pointed out that some of the biggest casualties of the credit crunch had been demutualised building societies which had tried to capitalise on deregulation to grow bigger.   View Article



© Graham Bishop

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