Graham Bishop.com

ECOFIN Council results: Bank resolution/SRM
The Council discussed a draft regulation aimed at establishing a single decision-making authority and a single fund for the resolution of failing banks. The Presidency confirmed its intention to seek agreement on the dossier by the end of the year. (Includes statement by ECOFIN chair Šadžius.) View Article

ECOFIN Council statement on EU banks' AQRs and stress tests, including on backstop arrangements
This statement specifies the expected action by the financial institutions and Member State governments, as well as any use of euro area or EU level instruments if needed to address any necessary action. (Includes Barnier comments.) View Article

Reply from ECB/Draghi to the SSM Working Group's letter of 28 October 2013
Draghi answered questions i.a. on how the ECB would ensure that the planned AQR covers the whole of the banking system under the supervisory responsibility of the SSM, not just the 130 institutions cited in the note regarding the comprehensive agreement. View Article

EBA chief warns that stress tests may be undermined by flawed decision-making process
Europe's ability to deal effectively with the next financial crisis risks being undermined by the "impossible" committee-led governance plaguing its banking watchdog, Andrea Enria has warned, also saying he was 'cautious' about the new stress test. View Article

Barnier interview with Europolitics: Bank resolution - Majority of states support key elements
"A compromise (on the SRM) can be reached before the end of the year", said Barnier, adding that a vast majority of States had backed him on the key elements of his proposal. View Article

Bloomberg: EU lawyers say EBA can't bind Commission on bank resolution
The Commission's proposed bank resolution system shouldn't be bound by EBA decisions, lawyers for the EU's 28 Member States have said. The legal opinion puts a dent in efforts by the UK and Sweden to beef up the EBA's role in the SRM. View Article

Bloomberg: Germany digs in against risk-sharing in EU bank failure plan
Germany has argued against a joint backstop for struggling euro area banks, as European finance ministers renewed their debate on how to handle the costs of managing failed lenders. View Article

Beck & Trebesch: A bank restructuring agency for the eurozone – Cleaning up the legacy losses
This column proposes a eurozone bank restructuring agency as a way to speed up the crisis resolution. This temporary, centralised agency would be in charge of restructuring viable and non-viable banks throughout the eurozone. View Article

ECB/Mersch: On the road to a Banking Union - The way forward from the ECB's perspective
Mersch reflected on how the fundamental idea behind the Banking Union is reflected in the practical design of the single system of banking supervision, and what else could be done to be faithful to it when banks have to be wound up. View Article

Handelsblatt: EU's Barnier to propose law separating bank activities
In an interview with Handelsblatt, Barnier said he planned to propose, by the end of the year, legislation that would require banks to separate regular banking activities from speculative and risky operations. View Article

BCBS/Ingves: Strengthening bank capital – Basel III and beyond
"It is important that bank capital is seen to be of sufficient quantity, quality, consistency and reliability. These four characteristics are critical to the long-run credibility and success of the international capital adequacy framework." View Article

HLEG/Liikanen: How to improve financial stability and resilience of SIFIs after the crisis?
"The regulatory reform agenda to prevent future banking crises is very ambitious, and it is essential to take it into completion. There are short-term adjustment costs to the banking sector, but as societies we must keep our focus on the long-run benefits." View Article

Right to basic bank account for all backed by Economic Affairs Committee MEPs
Everyone legally residing in the EU must have the right to open a basic payment account, and this right should not be denied on grounds of nationality or place of residence, said the ECON Committee. Fees and rules for these accounts should be transparent and comparable. EBF expressed concern. View Article

ECB launches public consultation on Recommendations for the security of mobile payments
The Governing Council of the ECB has launched a public consultation on the "Recommendations for the security of mobile payments", in the context of the work undertaken by the European Forum on the Security of Retail Payments. View Article

ESMA/Maijoor: Letter to DG MARKT/Faull on Commission's intention to decline ETD postponement
ESMA still considers that the definition of the reporting rules for ETDs requires considerable technical guidance and adaption that would benefit from a delay of the start reporting date. View Article

ESMA finalises clearing and risk mitigation obligations for non-EU OTC derivatives
ESMA has issued final draft RTS related to derivative transactions by non-EU counterparties. The RTS implement provisions of the Regulation on OTC derivatives, central counterparties and trade repositories (EMIR). View Article

ESMA Risk Dashboard No 4 2013
This Risk Dashboard provides a snapshot of risk issues in the third quarter of 2013 and covers the following areas: economic environment and securities markets conditions, liquidity risk, market risk, contagion risk and credit risk. View Article

Reuters: EU set for battle over rules for securities markets
A battle over the rules governing Europe's stock, bond, commodities and derivatives markets will rachet up when the EU's financial services chief pushes for stricter controls which some Member States say risk driving business away. View Article

CFTC issues final rules for derivatives clearing organisations to align with international standards
The CFTC finalised rules to establish additional standards for systemically important derivatives clearing organisations (SIDCOs). View Article

CFTC's DMO issues new guidance on the application of certain Commission regulations to SEFs
The CFTC's Division of Market Oversight issued new guidance to swap execution facilities and applicants for registration as an SEF concerning certain Commission regulations. View Article

Bloomberg: Wall Street bid on cross-border swaps quashed by US regulator
CFTC has moved to close off large banks' ability to avoid new regulation by arranging trades in America and then booking the deals in overseas affiliates. View Article

Deutsche Bank: CDS spreads widen under central clearing obligation
Deutsche Bank's research indicates that with the introduction of the new market infrastructure, investors that use CDS contracts to hedge their exposures may face higher premiums and may need to revise their hedging practices. View Article

FSB publishes Global Shadow Banking Monitoring 2013
This report includes data from 25 jurisdictions and the euro area as a whole. These jurisdictions represent about 80 per cent of global GDP and 90 per cent of global financial system assets. View Article

ECON Committee: EP/Council deal on rules to reduce insurance firms' investment risks
Draft EU legislation to reduce the riskiness of insurance firms' investments – and taxpayer exposure to them – has been informally agreed by Parliament and Member State negotiators. (Includes links to comments from Commissioner Barnier, Sharon Bowles and Lithuanian Presidency.) View Article

Comments on Omnibus II agreement: ECON/Bowles, EPP/Balz, Greens/Giegold
The new capital requirements for insurance companies - known as Solvency II - will be risk-based and will take effect soon. View Article

Insurers welcome EU agreement on Omnibus II; criticism from some quarters
Among the industry comments, EIOPA chair Bernardino also said that Omnibus II and the clarity over the Solvency II implementation timeline had been long awaited, and that it would certainly contribute to the strengthening of insurance supervision in Europe. View Article

Risk.net: Insurers demand clarity on Omnibus II
European insurers have warned policy-makers they need to act fast to dispel the remaining ambiguities around Solvency II if the Directive is to be successfully implemented. View Article

Commissioner Barnier: The evolving environment for insurance and pensions
Speaking at EIOPA's annual conference, Barnier looked at Solvency II, pensions, long-term investment/financing and consumer protection. View Article

BaFin: Incentives in sales - Recommendations for improved consumer protection
The insurance industry has learned its lesson: compliance officers, risk managers and experts on the planned European Solvency II regulations now recognise that certain practices in sales can cause massive damage to a company's reputation and cost it a great deal of money. View Article

EIOPA/Bernardino: Building a credible and respected supervisory authority
Bernardino spoke about EIOPA's key achievements to date and shared his reflections on the way forward. View Article

Bloomberg: Money market funds face push for tougher rules by EU lawmaker
Money market funds with a fixed share price should be banned from operating in the European Union from 2020, according to an EU lawmaker seeking tougher rules than Michel Barnier. View Article

FSB releases Guidance for More Effective Supervision of Risk Appetite (consultation) / Risk Culture at Financial Institutions
Supervisory expectations for firms' risk management functions and overall risk governance frameworks are increasing, as these were areas that exhibited significant weaknesses in many financial institutions during the global financial crisis. Deadline for consultation: 31 January, 2014. View Article

Fitch: Alternative asset managers targeting retail investors
The growing role of retail investors in the management of their own retirement assets is driving alternative asset managers, including most large private equity firms, to expand capital-raising strategies, says Fitch Ratings. View Article

Finance Watch/Hache: Evidence at EPP Group Hearing on ELTIFs
In its contribution to the hearing on European Long Term Investment Funds, Finance Watch said that more could be done to prevent a decline in bank lending, including revisiting the overly prescriptive approach of prudential regulation, and providing banks with stronger guidance. View Article

IPE: Dutch pension funds passing buck on sustainable investment policies
The Association of Investors for Sustainable Development (VBDO) has blasted Dutch pension funds for leaving their sustainable investment policies to asset managers and failing to consult participants on the issue. View Article

ESMA: Financial institutions must improve financial statement disclosures
ESMA published a Review of the comparability and quality of disclosures in 2012 IFRS financial statements of listed financial institutions. The Review makes recommendations aimed at enhancing the transparency of financial statements through the improvement of disclosures in certain key areas. View Article

Responses to Philippe Maystadt's draft report "Should IFRS standards be more European?": EBA, EIOPA, ESMA
The European Supervisory Authorities published their responses to Philippe Maystadt's draft report on recommendations for enhancing the EU's role in international accounting standard-setting. View Article

FRC proposes amendments to hedge accounting
The FRC has issued for consultation hedge accounting proposals in UK and Irish GAAP. The comment period closes on 14 February, 2014. View Article

Responses to IAASB consultation on standards for auditor reporting: ACCA, EuropeanIssuers
ACCA and EuropeanIssuers have submitted their responses to the IASB's ED, 'Reporting on Audited Financial Statements: Proposed New and Revised International Standards on Auditing (ISAs)'. View Article

IIA/Chambers: The transparency debate - How does it affect internal audit?
President and CEO of the IIA, Richard Chambers, looks at greater transparency in the corporate sector. In 2008 it was argued that lack of corporate transparency, particularly in the financial sector, was a direct factor in the crisis. View Article

IASB: Significant phase shift in reform of financial instruments accounting
The IASB announced the completion of a package of amendments to the accounting requirements for financial instruments. Published amendment to IFRS 9 'Financial Instruments' incorporates a new general hedge accounting model. View Article

EFRAG publishes final comment letter on IASB's revised ED Insurance Contracts
Regarding the general measurement and presentation requirements, EFRAG does not support the mandatory use of OCI to report the impact of changes in the discount rate of the insurance liabilities. View Article

FRC consults on amending AS TM1 for revised disclosure regulations
The FRC published a fast-track consultation paper on proposed amendments to Actuarial Standard Technical Memorandum 1, to reflect changes introduced by new disclosure regulations which affect Statutory Money Purchase Illustrations (SMPIs). The consultation period ends on 13 December, 2013. View Article

Plenary Session: Key things small investors should be told
Parliament endorsed draft EU rules on key information that small investors should be given before signing a contract. They backed plans for a mandatory, two-page A4 KID, providing clear, comparable and complete information on investment products. (Includes comment from ECON/Bowles.) View Article

ECOFIN Council: Adoption of the Professional Qualifications Directive
The Council adopted a review of the Professional Qualifications Directive. The review is aimed at making the system of mutual recognition of professional qualifications more efficient in order to achieve greater mobility of skilled workers across the EU. View Article

EIOPA/Montalvo: Making a difference for Europe and its citizens
Montalvo discussed the review of the European System of Financial Supervision (ESFS). View Article

EU and US conclude second round of TTIP negotiations in Brussels
Commissioner De Gucht said: "TTIP may well act as a nucleus and a laboratory for the next stage of rulemaking at the global level... because we will use TTIP to promote rules and standards that could form the basis for future international agreements whenever we can." View Article

ECFIN Economic Brief: The G20@5 - Is it still delivering?
In the five years since G20 Leaders first met, the G20 has become the premier forum for global economic policy coordination. The question is whether the G20 can maintain and even strengthen its role in the future and how it can achieve this. View Article

ECOFIN Council results: Savings taxation
The Council addressed the draft Directive aimed at enlarging the scope of savings income taxation to include all types of savings income and products that generate interest or equivalent income and exchange of information among taxation authorities. (Includes Šadžius/Šemeta comments.) View Article

Plenary Session: EP approves EU's long-term budget (MFF) 2014-2020
After months of complex negotiations, Parliament gave its blessing to the EU's long-term budget for 2014-2020. The overall budget for the next seven years is €960 billion in commitments and €908 billion in payments (at 2011 prices). (Includes comments from Lithuanian Presidency/Schulz/Barroso.) View Article

Plenary Session: Parliament approves EU's 2014 budget and plugs 2013 payment gaps
For payments, €500 million were added to the 2014 budget, bringing the total compared to the initial Council position to €135.5 billion. Commitments were set at €142.6 billion, in line with the Commission's budget proposal. (Includes statement by Commissioner Lewandowski.) View Article

Graham Bishop: Perspectives on the future of the EU and possibilities for a transatlantic free trade agreement
Speaking at the Senate Presidents' Forum in Madrid, Graham reprised the history of the EU movement and gave his perspective on the future of the EU. View Article

Graham Bishop: Temporary Eurobill Fund (TEF) – Summary of the Proposal and Timeline to Implementation
The Temporary Eurobill Fund is carefully structured to avoid opening its members to the virtually unlimited liability of guaranteeing all the debts of other members – as would happen in a mutualised pool of debt with 'joint & several' guarantees. View Article

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This week in "Brussels"

21 November 2013

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