Graham Bishop.com

ECB published opinion on CRD IV/CRR
The ECB strongly supports the timely and effective implementation of the Basel capital and liquidity standards. The ECB notes the leading role taken by the Commission in delivering on the G20 commitment to adopt and implement these standards fully within the agreed timeframe. View Article

EBA: Consultation paper on Draft Regulatory Technical Standards on Own Funds
The European Banking Authority (EBA) launched a consultation on Draft Regulatory Technical Standards (RTS) on Own Funds (part one). These RTS will be part of the single rulebook aimed at enhancing regulatory harmonisation in Europe, with the particular aim of strengthening the quality of capital. View Article

EBIC preliminary observations on the Consumer Market Study on consumers’ experiences with bank account switching
The European Banking Industry Committee recognises the role of bank account switching as part of a competitive environment in the European retail banking markets. EBIC provides comments in this area to the European Commission. View Article

FSB launched peer review on risk governance
Specifically, the peer reviews will focus on the following: board responsibilities and practices; the risk management function; and independent assessment of the risk governance framework by internal audit and third parties. View Article

EBF position on the European Commission's green paper, "Towards an integrated European market for card, internet and mobile payments“
EBF fully supports the individual objectives stated by the European Commission in the Green Paper, namely: more competition, more choice and transparency for consumers, more innovation, enhanced payment security and customer trust, and the benefits of standardisation in some areas. View Article

BIS Working Paper: 'Systemic risks in global banking - What can available data tell us and what more data are needed?'
This paper highlights some of the unique challenges to global systemic risk measurement, with an eye towards identifying those high priority areas where enhancements to data are most needed. View Article

FT: Shadow banking out of the shadows
Lawmakers and regulators deciding how tightly to tie up banks with new regulations are already eyeing a new frontier. Adair Turner, chair of the UK's Financial Services Authority, and many others warn against the dark side of finance: non-bank companies taking the risks banks used to take. View Article

FED Bernanke scrutinises shadow banking system
Bernanke said the money market mutual fund industry might need a regulatory overhaul, a move that other officials have also proposed. View Article

ECB assessment of a new direct link between securities settlement systems in the euro area
The Governing Council of the ECB approved the direct link between the Greek securities settlement system (SSS) BOGS ("investor" SSS) and Clearstream Banking AG – CASCADE ("issuer" SSS) as eligible to be used for the collateralisation of Eurosystem credit operations. View Article

EBF comments on draft regulatory technical standards on risk mitigation techniques for OTC derivatives not cleared by a CCP
The EBF is of the view that the ability of an institution to implement a risk mitigation framework best suited to its specific needs and business model is a fundamental element of the European regulatory framework. View Article

ECMI: Setting the institutional and regulatory framework for trading platforms - Does the MiFID definition of OTF make sense?
As discussions around the revision of MiFID are heating up, this paper by Diego Valiante tries to set a new regulatory and institutional framework for multilateral and bilateral execution mechanisms of complex financial instruments, such as over-the-counter derivatives and fixed income products. View Article

FN: Exchanges resist new rules for ETFs
Deutsche Börse and the London Stock Exchange have opposed a proposal that would require trading platforms to ensure a minimum number of market makers for their exchange-traded fund segments. View Article

FN: Banks staff up for arms race over equity derivatives
European banks are aggressively bulking up their equities derivatives franchises, in stark contrast to the cuts being made in other business lines, prompted by the prospect of higher margins and growing demand for derivatives products from hedge funds and institutional investors. View Article

FT: CME considers launching futures exchange in London
CME Group is considering opening a futures exchange in London as a way for the US operator to expand in Europe. The development is a sign that if CME does not win the bidding for the London Metal Exchange, it could build a European futures exchange to complement its existing clearing business. View Article

Independent: EU credit rating reform in tatters
Michel Barnier, the European Commissioner, is close to succumbing to a backlash against his plans to regulate credit ratings agencies heavily. View Article

EIOPA publishes a report on good practices for disclosure and selling of variable annuities
EIOPA published today its Report on good practices for disclosure and selling of variable annuities (VAs). The report forms part of EIOPA's own initiative work on consumer protection and financial innovation, and aims to promote common supervisory approaches and practices. View Article

ECB: Statistics on euro area insurance corporations and pension funds - fourth quarter 2011
In the fourth quarter of 2011, the total financial assets of euro area insurance corporations and pension funds increased to €6,980 billion, from €6,919 billion in the previous quarter. This increase is due almost equally to positive transactions and valuation changes. View Article

Insurance Insight: CIRC to tighten capital adequacy supervision
China's Insurance Regulatory Commission (CIRC) is to bolster its supervision of the insurance industry over the next few years to ensure that insurers are able to pay claims. View Article

Insurance Insight: 500 million microinsurance schemes worldwide, says report
The number of microinsurance schemes has reached an estimated 500 million worldwide, according to the Microinsurance Innovation Facility and the Munich Re Foundation. View Article

Insurance Europe: Joint statement on Japan Post reform
Insurance Europe has joined 14 other insurance associations and business associations to express concerns over the competitive advantages that would be given to Japan Post Insurance by legislation introduced into the Japanese Parliament on 30 March. View Article

WSJ: Insurers facing greater scrutiny
New York's top financial regulator is expanding an investigation of insurers that force homeowners policies on borrowers, after turning up evidence that consumers were charged too much, according to people familiar with the situation. View Article

FT: High yield bonds draw in billions
A wall of money has flooded into high yield corporate bond funds this year, as investors chase attractive yields buoyed by hopes that default rates will remain near their historic lows. View Article

Risk.net: Opinions divided on benefits of XBRL reporting standard for Solvency II
European policy-makers are exploring the use of XBRL, a standardised reporting language, for Solvency II. While mandating its use would harmonise reporting formats and bring the insurance industry in line with the banking sector, some argue there is little benefit to be gained from such a move. View Article

CRE: Spanish insurers fret over Solvency II ORSA requirements but gloss over eurozone threat
Spanish insurers are worried about a key element of new governance requirements that will be introduced by the forthcoming Solvency II Directive. View Article

ALFI UCITS IV implementation project
ALFI's Key Investor Information Document (KID) working group has analysed the UCITS IV implementing measures on the KID adopted by the European Commission by Regulation (EU) n° 583/2010 of 1 July 2010, as well as related regulatory guidelines and the use of KID in distribution networks. View Article

IPE: ESMA consultation on UCITS, ETFs 'lacks clarity'
Following the launch of a consultation paper on UCITS ETFs and other UCITS-related issues, a number of pension fund and asset management associations welcomed the guidelines set out by ESMA, but lamented a lack of clarity on several points. View Article

EDHEC-Risk Institute commented on ESMA Consultation Paper, "ESMA's guidelines on ETFs and other UCITS issues"
In response to the ESMA consultation paper on ETFs, EDHEC Risk Institute calls for improved transparency, governance and auditability of indices. View Article

FN: Five concerns over ESMA's ETF-UCITS consultation
Asset managers have set out their concerns surrounding the future of securities lending for UCITS funds, which they say could be jeopardised should the European Securities and Markets Authority's hefty consultation on exchange traded funds and UCITS go ahead as it stands. View Article

Hedgeweek: Managers not in favour of proposed securities lending reforms
Managers are resisting proposed regulatory reforms that would see them no longer being able to profit from securities lending – where shares or other assets held in a portfolio are lent out to hedge funds or other short-sellers in return for a fee, which helps reduce costs for investors. View Article

VoxEU: Are voluntary hedge fund disclosures reliable?
In the wake of the financial crisis, SEC proposed a rule requiring US-based hedge funds to provide regular reports on their performance, trading positions and counterparties. Before the policy is phased in, this column argues that such a move will benefit not only regulators but investors as well. View Article

IPE: Regulating Europe
Gail Moss reviews pension regulation and law changes under discussion in Denmark, Finland, Germany, the Netherlands, Sweden, Switzerland and the UK. View Article

IPE: Ireland announces details of new funding standard for pension funds
The Social Welfare and Pensions Bill published today shed light on the long-delayed revision to the funding standard which was announced last year by Joan Burton, the Minister for Social Protection. View Article

EFRAG's invitation to comment on Government Loans (Amendments to IFRS 1)
EFRAG has issued an invitation to comment relating to the endorsement for use in the EU of Government Loans (Amendments to IFRS 1). Comments are requested by 7 May, 2012. View Article

EFRAG's Endorsement Advice and Effects Study Report on IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011)
EFRAG has submitted its Endorsement Advice Letter and Effects Study Report to the EC regarding IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IAS 27 (amended 2011) and IAS 28 (amended 2011). View Article

EFRAG's Endorsement Advice and Effects Study Report on amendments to IAS 32 and to IFRS 7
EFRAG has submitted its Endorsement Advice Letter and Effects Study Report to the EC regarding the Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) and Disclosures–Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7). View Article

IASB and ASBJ hold biannual meeting
Representatives of the IASB and the ASBJ met on 2 April 2012 in Tokyo to discuss the future cooperation with the FASB, national accounting standard-setters and the ASBJ. View Article

European Commission published a report on the application of the Third Anti-Money Laundering Directive
The Report concludes that although the existing framework appears to work well and that no fundamental shortcomings have been identified which would require substantial changes, some modifications are necessary to adapt to the evolving threats posed. View Article

EBA, ESMA and EIOPA publish two reports on Money Laundering
The Joint Committee of the three European Supervisory Authorities (EBA, ESMA and EIOPA) has today published two reports on the implementation of the Third Money Laundering Directive. View Article

Bruegel/Vallée comments on the 'two pack'
Shahin Vallée comments in his blog i.a. on the two pack, expressing surprise that it has been largely overlooked, both by the general public and by financial markets. View Article

Goodhart/Wagner: Regulators should encourage more diversity in the financial system
This column argues that financial institutions have become too similar to each other, making financial crises more likely. It proposes a regulatory approach based on relative stock market correlations that would encourage greater diversity in the financial system. View Article

MoneyMarketing: Top 10 CPD myths
Julie Pardy, retail sector director at Corporate Training Partnerships, writes that in less than a year, formal continuing professional development (CPD) schemes become compulsory for retail financial services firms. She has put together a top 10 list to dispel many of the CPD 'myths'. View Article

Euro battle over RDR commission ban
European Commission proposals for MiFID II, published in October, would ban commission for advisers operating on an independent basis. View Article

Consumer Panel says RDR guide does not go far enough
The chair of the Financial Services Consumer Panel (FSCP) has said the FSA's two-page consumer guide to the Retail Distribution Review (RDR) does not go far enough to explain upcoming changes to financial advice. View Article

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This week in "Brussels"

12 April 2012

© Graham Bishop