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11 February 2010

This week in "Brussels" + Podcast

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  Articles from 04 February 2010 - 11 February 2010

  Financial Services Policy

Barroso: De Larosière’s ideas have shaped the direction of the G20
At a financial services roundtable, Barroso said that the debate on CRD IV is at a relatively early stage. In 2010 there will be an assessment of cumulative impacts, both at global and EU level. We must get right the calibration on issues like leverage ratio.  View Article
MEPs call for swifter response and tighter coordination in Eurozone to avoid tension in financial markets
EP Liberal leader Guy Verhofstadt, speaking about the Greek situation, said that: "the tactical and strategic error was that the EU didn't intervene immediately and that it followed the wrong approach from the start". He criticized the "lack of cohesion, confidence and solidarity"  View Article
Barroso’s new team wins Parliament backing
MEPs have approved 26 candidates for the EC, enabling President Barroso’s new team to get down to business. The vote was 488 in favour - well over the majority required. French Commissioner Barnier will be in charge of DG MARKT and, therefore, implementing financial services policy.  View Article
G7 fails to reach agreement on financial regulation
“The G7 cannot play the role it once did, but it can and it must continue to lead by example in whatever role it will play in the future,” said Canada’s Finance Minister Jim Flaherty. However, he added: “The first responders to the recent crisis were G7 members”  View Article
CEBS public hearing summary guidelines on lessons learnt from the financial crisis
A number of concerns were raised. Some respondents believe the guidelines are too detailed and increase the already significantly large amount of disclosures. Clarity is required on what is to be considered a situation of “stress”.  View Article
Lord Myners: “one of the ironic failures of governance has been executive remuneration”
At the NAPF Corporate Governance Seminar in London, Lord Myners said that if UK banks had reduced dividend payout ratios by a third between 2000 and 2007, it would have generated more capital than that supplied by the UK government during the crisis.   View Article
Finextra: finance firms to spend billions on risk management
According to research by Deloitte, the top 100 financial institutions will spend over $100 billion a year implementing risk governance frameworks by 2012. The money will be spent on people, computer systems and meeting Basel II and Solvency II capital standards.  View Article
EC consultations on future EU-US data protection and information-sharing agreement
The EP’s rejection of the SWIFT agreement - being a polemic issue - has led the EC to consult on all types of data-sharing including EU-US financial transactions. The transfer of personal data is an essential element of transatlantic law enforcement cooperation.  View Article
Japanese FSA: “Development of Institutional Frameworks pertaining to financial and capital markets”
In response to the financial crisis, the Financial Services Agency decided to start a detailed examination of the issues that Japan should address, including OTC markets and hedge fund regulation. It is also taking additional steps to improve the system, including the presentation of a draft bill.  View Article
Japanese FSA uses revised cabinet office ordinances to permit voluntary application of International Financial Reporting Standards
The Financial Services Agency is using these revisions to enable Japanese listed companies that meet certain requirements (“Specified Companies”) to prepare their consolidated financial statements by applying IFRS. This will begin from the consolidated fiscal year ending on or after March 31, 2010.   View Article
Paul N. Goldschmidt: EU, rather than Germany, should offer support to Greece
He believes that from a credible and audacious response to the Greek crisis should emerge a basis for improved economic coordination (government) within the EU, as well as an efficient mobilisation of the resources of the ECB and EIB for the benefit of all European citizens.  View Article
Paul N. Goldschmidt: Obama and the Bankers
Paul Goldshmidt gives an overview of the current state of financial regulation. He believes that excessive bonuses should be classified from an economic point of view as “dividends” rather than as “remuneration”.  View Article


BBA’s views on the Turner review conference discussion paper
The industry accepts the need to work with the regulatory authorities to reduce the potential scale of future government intervention in the banking system. This should be done with an understanding of the causes of the crisis and the impact that remedial measures may have on the wider economy.  View Article
Basel Committee consults on micro-finance activities and core principles
The report is based on a careful analysis of key regulatory and supervisory issues relevant to micro-finance activities. It includes a comprehensive snapshot of current practices and experiences in countries from different regions and with different income levels.  View Article


CESR consults on extensions to major shareholding notifications
CESR proposes to extend major shareholding notifications to instruments of similar economic effect to holding shares and entitlements to acquire shares. It advocates an approach that is consistent with the pan-European short-selling regime already proposed by CESR.   View Article
EP Civil Liberties Committee recommends SWIFT agreement is rejected
At the beginning of 2010 new arrangements for judicial EU/USA co-operation came into force, granting access to targeted financial data, on request, via the national authorities. Consequently, in the event that the agreement is rejected, the rapporteur insists there would not be a "security gap".  View Article
International Centre for Financial Regulation: overview of OTC derivatives markets regulation
Nicole Hergarten, Director of Training at the ICFR, gave a seminar on OTC derivatives. She highlighted the G20 targets for OTC regulation and that by the end of 2012, all standardised OTC derivatives contracts should be traded on exchanges and cleared through central counterparties.  View Article


ABI concerned about regulators’ approach to latest Solvency II advice
Responding to CEIOPS’ third and final set of advice on Solvency II implementing measures, Peter Vipond, Director of Financial Regulation at the ABI, said: “concerns are about the continuing overtly cautious approach of regulators, whose desire for firms to hold extra capital”.  View Article

  Asset Management

House of Lords European Union Committee publishes report on AIFM Directive
The Committee said that unless the Directive is compatible with a global regulatory approach, it will "seriously damage the EU and UK Economies". They also stressed that the UK Government should not agree with the Directive unless it is compatible with equivalent legislation in third countries.  View Article
ECON Committee Chair Sharon Bowles comments on AIFMD’s future
“While I understand the concerns some in the City have, at times I believe these concerns have been somewhat overstated. New regulation is there to help maintain a stable market, not to undermine confidence”.  View Article

  Corporate Governance/Accounting

Leaseurope: changes to international lease accounting standards may impact on cost and availability of finance for small businesses
Leaseurope is calling for businesses and policy-makers to review the IASB’s latest plans which are certain to lead to a drastic change in existing lease accounting requirements. The new standards are extremely complex and will affect almost all European businesses.  View Article
FASB/IASB joint meeting: new definition of ‘lease’
Among other issues, both institutions discussed the definition of leasing, possible objectives for hedge accounting and whether hedging risk components (bifurcation-by-risk) should be permitted.  View Article
EC approves co-operation with Canada, Japan and Switzerland on exchange of audit working papers
All three countries have expressed an interest in exchanging audit working papers with EU member states. Commissioner McCreevy emphasized that the objective is mutual reliance on each other's oversight systems.  View Article

  Competition: Financial Services

EC temporarily approves additional recapitalisation package for ABN AMRO and Fortis Bank
The additional recapitalisation package of €6.9 billion is necessary to finance the separation of ABN Amro from its mother company, and the integration costs resulting from the merger between FBN and ABN Amro. This urgent rescue aid will be valid until 31 July 2010.  View Article

  Financial stability - policy analysis

BIS General Manager on financial stability at Reserve Bank of Australia Symposium’s 50th Anniversary
Jaime Caruana’s speech posed ten questions about, inter alia, the stability of markets, sufficiency of private risk control and capital requirements, policies towards systemic risk, their relationship to monetary policy and international cooperation.   View Article
EDHEC- risk: it was not just the banks that failed to spot the risks
In an article entitled “Roles, rights and powers of shareholders”, Dr Arjuna Sittampalam, Editor and Research Associate with EDHEC-Risk Institute, analyses the crisis. He describes how the company profits pie should be divided between employees and shareholders.  View Article
Fifth ECB Central Banking Conference proceedings published: “The euro at ten – lessons and challenges”
Following the conference held in November 2008, the ECB is publishing a report with papers, commentaries and speeches analysing the recent global crisis and the first decade of the euro. Ben Bernanke highlighted the useful cooperation among the Fed and the ECB to tackle the financial crisis.  View Article



© Graham Bishop

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