Graham Bishop.com

Jean-Claude Trichet: Intervention at the Eurofi Financial Forum 2011
In a speech at the Eurofi Financial Forum 2011 in Wroclaw, ECB President Jean-Claude Trichet welcomed the opportunity to exchange views on issues central to the effective functioning of the financial sector and its key task of supporting sustainable growth in the real economy. View Article

EBF: European banks urge governments to commit to budgetary discipline
European banks are committed to reform and to supporting the economy. They have already taken significant steps to demonstrate their ability to withstand any future crisis. View Article

CEPS: Business Models in European Banking - A pre- and post-crisis screening
This timely report presents the results of the first screening exercise conducted of the performance, stability, risk, efficiency and corporate governance of 26 major European banks, before, during and after the financial crisis, with a view to identifying key strengths and weaknesses inherent in the dominant business models in light of the upcoming regulatory changes. View Article

BIS: Consolidated banking statistics
The consolidated banking statistics report banks' on-balance sheet financial claims on the rest of the world, and thereby provide a measure of the risk exposures of lenders' national banking systems. View Article

BIS: Locational banking statistics
The locational banking statistics gather quarterly data on international financial claims and liabilities of bank offices in the reporting countries. View Article

José Manuel González-Páramo - Monetary and fiscal policies in times of crisis
In a speech at the Monetary and Fiscal Policies Network (MONFISPOL) conference, González-Páramo, Member of the ECB's Executive Board, discussed the challenges that the current crisis has posed to policymakers and central banks in particular. View Article

BBA: Drop the pressure
At a seminar chaired by British Bankers' Association's Irving Henry, the proactive and positive potential of stress testing was emphasised. View Article

Paul N Goldschmidt: Why are banks in the eye of the storm?
The Vickers Report, which recommends ring fencing ordinary commercial banking from investment banking activities, constitutes another example of proposals which, whatever their merit, will have no immediate impact on the financial crisis. View Article

Bruegel: Euro area banks must be freed from national capitals
Economic and monetary union requires that links between national banking systems and Member States be severed and replaced by a credible supranational framework for banking policy, building on the recently-created European Banking Authority (EBA) and on the financial resources of the EFSF. View Article

Commission approved restructuring of HSH Nordbank - subject to conditions
The restructuring plan, which was revised to take into account Commission objections, will result in a sounder, less risky business model and more adequate levels of capitalisation which will better ensure its future viability. View Article

Eurofinas: Response to the Financial Action Task Force's Review of the Standards
The European Federation of Finance House Associations provides comments on the FATF Review of the Standards in preparation of the 4th round of mutual evaluation. Eurofinas wishes to emphasise the low level of antimoney laundering (AML) risk posed by consumer credit products. View Article

ESMA issues first drafts of binding standards for credit rating agencies
ESMA published for consultation its first set of proposed future Regulatory Technical Standards. The draft RTSs on credit rating agencies detail the information that CRAs would have to disclose and the rules they would have to comply with in order to fulfil the requirements of the CRA Regulation. View Article

Parliamentary question on international rating agencies
Commissioner Barnier replies, stating that the Commission is analysing different policy measures to enhance the transparency and the process of issuing ratings. The Commission plans to come forward with a legislative proposal by the end of 2011. View Article

What reforms for the credit rating industry? A European perspective
This article by CEPS CEO/ECMI Director, Karel Lannoo, discusses the role of credit ratings agents today, the regulatory role of ratings, the scope of the EU regulation, and the regulatory approach of the business models of the large ratings agents. View Article

IOSCO announces commodity derivatives markets supervisory principles
The Report, prepared by the Task Force on Commodity Futures Markets, addresses the G20's November 2010 request for further work on regulation and supervision of physical commodity derivatives markets. View Article

AFME and ICMA announce new cooperation agreement
The agreement is focused on streamlining communication between the two associations and eliminating any operational inefficiency which could arise through duplication of effort. The aim is to maximise the influence of each association on behalf of its individual members. View Article

FN: MiFID tightens the net around clearing silo model
Proposals outlined in the draft text of the latest MiFID II rules surprised the European trading industry when they promised to stop anti-competitive behaviour among clearinghouses owned by exchanges, known as vertical silos, by forcing them to open access to their clearing pools. View Article

Euractiv: EU short selling talks collapse amid sovereign debt fears
Negotiations to regulate short selling in Europe collapsed for the second time this week, over fears that legislation would further destabilise the sovereign debt markets in the eurozone. View Article

FN: Making the case for EFSF credit default swaps
Although there are one or two political obstacles to be negotiated en route, there is a good market case to be made for the development of credit default swap prices on the European Financial Stability Facility, the eurozone's financing support vehicle. View Article

FN: Stage set for fresh European clearing reform battle
Europe is set for a second major battle over clearing reform following HM Treasury's lawsuit against the European Central Bank over new rules that would disadvantage the UK. View Article

European contract law in the insurance sector
The Commission is preparing a legislative proposal for an optional European contract law to be presented in October. Differences in contract law may hinder cross-border trade for both SMEs and consumers buying across borders, as well as for some insurance companies. View Article

Joint Comments on the FSB's consultative document on Effective Resolution of SIFIs
The General Insurance Association of Japan (GIAJ), together with 16 other insurance associations around the world, has submitted comments on the Financial Stability Board's consultative document on Effective Resolution of Systemically Important Financial Institutions. View Article

Eurofinas, EBF and EMF highlight view on EC Insurance Review
The European Banking Federation (EBF), Eurofinas and The European Mortgage Federation (EMF) have stated their common view on specific aspects of the forthcoming European Union framework on Insurance Mediation (IMD II). View Article

IAIS commented on enhancing the value of auditor report published by IAASB
The IAIS commented on the IAASB's Consultation Paper, 'Enhancing the Value of Auditor Reporting: Exploring Options for Change'. The IAIS expressed its views on how changes to auditor reports addressed to the public may enhance audit quality through enhanced disclosures about the audit itself. View Article

GCC: Solvency II is changing the game
Guy Carpenter and Co claims market consensus holds that Solvency II will ultimately benefit reinsurers, but conceals numerous challenges and opportunities. View Article

European Commission looks at synthetic ETF crackdown
The European Commission has warned of the dangers of synthetic Exchange Traded Funds, and said some firms were using UCITS rules as a “shield”. View Article

ALFI response to the ESMA consultation on possible implementing measures of the AIFMD
On 13 September 2011, ALFI responded to the ESMA consultation on possible implementing measures of the Alternative Investment Fund Managers Directive. View Article

AFME response to ESMA Consultation Paper on Draft Technical Advice to the EC on possible implementing measures for the AIFMD
AFME notes that a separate response to the Consultation Paper (CP) has been prepared and will be submitted by an AFME working group comprising securitisation market participants. That response is focused on securitisation-specific points raised in the CP. View Article

EVCA response to ESMA's draft technical advice to the European Commission on possible implementing measures of the AIFMD
EVCA welcomes the consideration already given by ESMA around the diversity of funds covered and ESMA's recognition that a one-size-fits-all approach is not feasible, but still more tailoring is necessary in order to spare Europe's pensioners and savers from pointless cost and increased risk. View Article

AIMA responds to ESMA's AIFMD consultation paper
The Alternative Investment Management Association, the global hedge fund association, has responded to a consultation by the European Securities and Markets Authority on how the Alternative Investment Fund Managers Directive (AIFMD) should be implemented. View Article

FASB completes project on improvement of employer disclosures for multiemployer pension plans
The FASB issued ASU No 2011-09, 'Compensation—Retirement Benefits—Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer's Participation in a Multiemployer Plan'. This leads employers to provide more information about an employer's financial obligations to multiemployer pension plans. View Article

OECD survey - pension funds investment in infrastructure
The objective of this study was to understand the main problems encountered by pension funds when investing in infrastructure. View Article

FN: European super-regulators too close to industry
Groups representing consumers of financial services have accused two of the new European super-regulators of stuffing their advisory bodies with industry representatives. A formal complaint has been filed against both the EBA and the European Insurance and Occupational Pensions Authority. View Article

IPE: NAPF says solvency standards driving pension funds into short-termism
Lindsay Tomlinson, chairman of the UK's National Association of Pension Funds, argued that pension funds are being forced to adopt the mindset of short-term investors by solvency regulation and accounting standards. View Article

EBA commented on enhancing the value of auditor report published by IAASB
The EBA published its comment on the IAASB's Consultation Paper, 'Enhancing the Value of Auditor Reporting: Exploring Options for Change'. The EBA has a strong interest in promoting sound audit practices supporting high quality corporate reporting. View Article

FASB: Accounting standards update to simplify testing goodwill for impairment
The FASB issued Accounting Standards Update No 2011-08, 'Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment'. The Update simplifies how an entity tests goodwill for impairment. View Article

EFRAG Update September 2011
The September 2011 edition of EFRAG Update reports the discussions held at the recent EFRAG TEG meeting. View Article

EFRAG: Invitation for companies to participate in the field-testing of IFRS 11 and IFRS 12
EFRAG, in partnership with European National Standard Setters, will conduct field-testing of the new requirements on joint arrangements IFRS 11 and IFRS 12, published by IASB in May 2011. Response to participation is expected by 22 September 2011. View Article

EFRAG: Invitation for companies to participate in the field-testing of IFRS 10 and IFRS 12
EFRAG, in partnership with European National Standard Setters, will conduct field-testing of the new requirements on consolidation IFRS 10 and IFRS 12, published by IASB in May 2011. Response to participation in the field-testing is expected by 22 September 2011. View Article

Barroso: The economic governance package is a robust answer to what was a serious shortcoming in the design of the euro
Barroso stressed that the economic governance package will give the EU and its Member States a powerful tool – one missing until now – to avoid falling into the trap of unsustainable debt. View Article

Presidency Statement: Communication on the agreement on the Economic Governance Package for the EU
The intensive work on the six legal acts improving economic governance in the EU has been finalised. Finance Ministers of the EU have reached an agreement on a few outstanding issues. View Article

ECON Committee published FAQ on the economic governance "six pack"
The deal overcomes the qualms of the Council and the European Parliament about introducing procedures that will allow the Commission to take action when dealing with Member States with unsustainable budgetary and macro-economic policies. View Article

Informal ECOFIN Council in Wrocław
Minister Rostowski underlined the need to base Europe's stable economic future on two pillars: a robust and secure financial system, where the private sector plays a key role; and on efficient public economic management designed to bolster public finances. View Article

CEPR published 13th CEPR/ICMB Geneva Report on the World Economy: ‘Public Debts: Nuts, Bolts and Worries’
Recent discussions of debt sustainability and fiscal consolidation have been motivated by the crisis: markets are impatient and time is short. While not denying the need for immediate measures to address immediate problems, this report views the public debt situation from a longer-term perspective. View Article

Code Group acceptance of Jersey's zero-ten tax regime
Chief Minister Le Sueur said: "This is excellent news for Jersey, and vindicates the consistent stance maintained by the Treasury Minister and myself over a long period”. View Article

IMF publishes Global Financial Stability Report
The report argues that strained public finances force policymakers to exercise particular care in the use of fiscal policy to support economic activity, while monetary policy has limited room to provide additional stimulus and, as a result, the crisis has moved into a new, more political phase. View Article

Bloomberg: Barroso says eurobonds should not be ruled out
European Commission President José Barroso said that policy-makers battling a European debt crisis shouldn't rule out issuing joint euro area bonds and must develop integration tools to make that possible, even if German opposition means it can't be done immediately. View Article

Reuters: Greece sharpens austerity measures
Greece adopted yet more austerity measures on Wednesday to secure a bailout instalment crucial to avoid running out of money next month. View Article

European Systemic Risk Board meeting
Key risks stem from potential further adverse feedback effects between sovereign risks, funding vulnerabilities within the EU banking sector, and a weakening of growth outlooks both at global and EU levels. View Article

FT: Troika makes good progress on Greece
Evangelos Venizelos, the Greek finance minister, and the troika debating funding for Greece concluded a conference call late on Tuesday, with lead negotiators set to return to Athens early next week in the clearest sign yet they are about to sign off on an €8 billion aid payment to Greece. View Article

FT: Italy plans reforms to rebuild growth
Italian economy minister, Giulio Tremonti, is drawing up new reforms designed to lift Italy's stagnating economy, in response to market pressures that followed the government's disappointing austerity budget and following a downgrade of its credit rating. View Article

IMF publishes working paper 'Growth spillover dynamics from crisis to recovery'
The paper argues that positive spillovers from Spain were important prior to the 2008-09 crisis. Spain is generating negative spillovers in this recovery due to a depressed domestic demand. Negative spillovers from the European crisis countries appear limited, consistent with their modest size. View Article

WSJ: Should busted Greece stay in eurozone?
Should they stay or should they go? Now that it's (almost) alright to admit that Greece is insolvent, the question can now be asked: When should it default, and should it stay inside the eurozone or not? View Article

Bloomberg: S&P cuts Italy rating on weak growth outlook
Italy's credit rating was cut by Standard & Poor's on concern that weakening economic growth and a “fragile” government mean the nation won't be able to reduce the euro region's second-largest debt burden. View Article

FT: Greece should default and abandon the euro
Nouriel Roubini writes that to escape its present predicament, Greece must now begin an orderly default, voluntarily exit the eurozone and return to the drachma. View Article

IMF and World Bank: Weak global economy tops agenda for policymakers
Reza Moghadam, Director of the IMF's Strategy, Policy, and Review Department, discusses the issues that are likely to receive most attention at the meetings. View Article

Euractiv: Eurozone meeting ends on debt crisis stalemate
A meeting of eurozone finance ministers ended with no new measures, amid pressing calls to finalise quickly the second aid package to Greece and ratify reforms of the eurozone's €440 billion bailout fund. "Everyone is disorientated", summed up a dismayed Jean-Claude Juncker, Eurogroup chairman. View Article

BIS September 2011 Quarterly Review traces back recent turbulence in financial markets to weaker growth expectations
The BIS Quarterly Review for September 2011 shows how a weaker outlook for the global economy drove down the prices of risky assets and fuelled concerns about sovereign risk. View Article

WSJ: Greece seeks further cuts
Greece's government held an emergency cabinet meeting Sunday to plan new measures to bring its unruly budget deficit into line, after heated warnings from the other eurozone nations over the weekend that its efforts were insufficient and might threaten the delivery of future aid. View Article

FT: Lenders harden their stance on Athens
Greek authorities made a fresh attempt on Monday to convince international lenders they had a credible plan to close a growing financing gap, amid signs negotiators were hardening their line over an €8 billion aid payment that Athens needs in three weeks to prevent it from running out of cash. View Article

Reuters: EU finance ministers take stock of progress on debt crisis
EU finance ministers broke no new ground in dealing with the eurozone debt crisis in discussions over the weekend, instead absorbing some ideas and rejecting others and taking stock of progress on agreed steps. View Article

Bruegel: Resolving the European debt crisis
Bruegel and the Peterson Institute for International Economics hosted a conference on resolving the European debt crisis. The conference was designed to contribute towards a better understanding of the implications of alternative approaches to resolving the crisis. View Article

FT: Mood improves as eurozone tensions ease
Jean-Claude Trichet, ECB president, called on all governments to step up their efforts to slash budgets. Olli Rehn, EU economic affairs commissioner, said that he expected tougher eurozone-wide budget rules to be in place by the beginning of next year. View Article

FT: Finland sees end to Greek collateral problem
Alexander Stubb, Finnish European affairs minister, said he was "carefully optimistic that this will be solved as part and parcel of the whole package for Greece within the next few days". View Article

Lorenzo Bini Smaghi: Policy rules and institutions in times of crisis
Bini Smaghi says that the central banks have taken unconventional measures to try to improve and to restore the effectiveness of monetary policy in a context of financial instability. View Article

Euro reform deal delays crisis solution, say S&D Euro MEPs
S&D Euro MPs today criticised the agreement on eurozone reforms - the so-called economic governance package - as failing to provide a lasting solution to Europe's economic and social crisis. View Article

FT: Central banks act to help Europe lenders
Five central banks, including the European Central Bank, the Bank of England and Switzerland's central bank, said they would provide three-month dollar loans to banks from October, which will cover the year-end period. View Article

Lagarde urges collective action to restore confidence
Lagarde argues that as uncertainty continues to roil the world's financial markets, world leaders should act together to address the three main challenges facing the global economy: debt pressures sapping growth, risk of instability in the core of the global economic system, and social tension. View Article

Graham Bishop's blog: ECOFIN finally sees sense
ECOFIN finally sees sense and agrees "six pack" with Parliament - good omen for a grand economic/political bargain soon. View Article

Bruegel: Why we should listen to Tim Geithner
Guntram B Wolff writes that if, as urged by Geithner, eurozone leaders were to use EFSF guarantees and capital more efficiently by leveraging it with ECB money, thereby increasing the firing power of the EFSF for buying government bonds, it would immediately ease the crisis. View Article

Bruegel: Eurozone countries CAN'T afford more fiscal stimulus
Jean Pisani-Ferry says there is a big difference between the Vietnam War and the euro battle: it is hard to think that the former could have been won whatever the means deployed. View Article

Bruegel: Greece - quo vadis?
Zsolt Darvas comments that there is no real choice: although an immediate sovereign default is very unlikely, with or without it Greece has to put its house in order inside the eurozone. View Article

CER: The euro - reaching the endgame?
Eurozone policy-makers, especially German and Dutch ones, have been unable to rise above hubris and moral posturing, leaving the eurozone with very little ammunition to confront the coming financial storm. They have stubbornly dug in their heels, preferring to deepen the crisis than to admit their mistakes. This makes a fracturing of the eurozone almost inevitable. View Article

Wolfgang Münchau: Eurobonds and fiscal union are the only way out
Soon, the ECB will come under pressure to monetise debt. The ruling of Germany's constitutional court and a shocking rise in anti-euro sentiment in the German government make it unlikely that the European Union will end the crisis by means of a eurobond and a fiscal union in the short run. That leaves the ECB as the last line of defence for the euro. Can this work? View Article

OMFIF: Euro has become a political football for US, Chinese
David Marsh writes that as bickering intensified in Germany's governing coalition over ways out of the mess, Geithner's Polish journey underlines how the euro has become a political football kicked around by the US and China. The world's two largest economies are taking predictably different lines. View Article

John Wyles: The rocky road to integration
Writing for European Voice, Wyles says the eurozone needs a ‘grand bargain' with EU outsiders to create a new system of governance for the euro. "We are on tenterhooks: are we at mission impossible, or at the beginning of a new Europe?" View Article

Lawrence Summers: The world must insist that Europe act
Writing for the FT, Summers says that in normal circumstances comity would require deference by others to European authorities on the resolution of European problems. Now, when these problems have the potential to disrupt growth around the world, all nations have an obligation to insist that Europe find a viable way forward. View Article

Stewart Fleming: Fiddling while Europe burns
As Rome and Athens have fiddled in their negotiations for a eurozone bail-out, Europe has been burning: oblivious Finland has been nit-picking over the bail-out terms, and eurozone governments have been mulling over the details of the yet-to-be-approved 21 July plan to strengthen the debt strategy. View Article

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This week in "Brussels"

22 September 2011

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