Graham Bishop.com

Schulz letter increases pressure in institutional dispute over SRM
EP president Schulz has sent a letter to Commission president Barroso criticising the Council's attempts to negotiate the SRM on an intergovernmental basis. View Article

President Barroso appeals for compromise on bank resolution
Speaking at the European Parliamentary Week, Barroso urged the Council and the Parliament to reach an agreement on the Single Resolution Mechanism for banks before the European elections. (Includes links to further EPW speeches.) View Article

Conference of Presidents discussion on Single Resolution Mechanism
The Conference of Presidents, the leaders of the political groups, the President and the EP negotiating team on the SRM held an intensive discussion on the state of play of the SRM negotiations. View Article

Bruegel/Merler: European Bank Resolution - Don't try this at home
Merler looks at how the resolution of a bank would work in practice, highlighting the potential problems with the decision-making process and the common backstop. View Article

Fundamental elements of a bank's capital planning process issued by the Basel Committee
The Basel Committee has issued 'A Sound Capital Planning Process: Fundamental Elements', which sets out sound practices that foster overall improvement in banks' capital planning practices. View Article

Consultative paper on revised good practice principles for supervisory colleges issued by the Basel Committee
The Committee seeks to ensure that the principles remain fit for purpose and that they describe how high quality supervisory colleges typically function. Comments should be uploaded by 18 April, 2014. View Article

Bloomberg: EU weighs ban on proprietary trading at some banks from 2018
The largest banks in the EU would face a "narrowly"-defined ban on proprietary trading from 2018, under draft plans by Commissioner Barnier. View Article

Bloomberg: Bonus curbs under threat from EBA plan, lawmaker tells Barnier
Rules to cap banker bonuses at twice fixed pay may be undermined by recommendations from the EBA that would create widespread waivers to the curbs, MEP Philippe Lamberts has said. Separately, Fitch Ratings said the caps were unlikely to drive shifts in banks' cost. View Article

Extension of deadline for SEPA migration: Council confirms deal with EP
The Perm Reps Committee approved, on behalf of the Council, an agreement with the EP on a proposed regulation that postpones to 1 August 2014 the end date in the euro area for the migration of domestic and intra-European CTs and DDs in euros towards SEPA CTs and SEPA DDs. View Article

BoE: Launch of new Indexed Long-Term Repo operations
This is the next step in the Bank's new approach to increasing the availability and flexibility of liquidity insurance, as announced by the Governor in October. View Article

ECJ rejects UK challenge to short-selling regulation
The UK was challenging the power of ESMA to adopt emergency measures under the SSR, which in their view went against general EU principles. The ECJ rejected the plea, finding that the SSR and the powers given to ESMA are compatible with EU law. (Includes MEP comments.) View Article

FT: MiFID show moves to Paris after breakthrough agreement
After the euphoria of the EU's MiFID deal, ínterest is now turning to the agreement's fine details. This will be overseen by Paris-based ESMA, and will ultimately decide the winners and losers. View Article

ISDA: Cross-border fragmentation of global OTC derivatives
This ISDA analysis reveals that the 2.10.13 effective date for SEF compliance, the definition of a US person, and the Footnote 88 interpretation are clearly having a disruptive impact on OTC derivative trading volumes. View Article

Reuters: Derivatives may escape transaction tax in eurozone
Some financial derivatives may be ditched from plans to tax financial transactions in 11 eurozone countries to avoid harming sovereign debt markets. The countries met to discuss a revised proposal to tax stock, bond and derivatives transactions and make banks repay taxpayer money. View Article

FN: Brokers unite to tackle caps on dark pool trading
Brokers in Europe are teaming up to devise ways of managing restrictions on dark pool trading included in MiFID II. One possibility would be to impose a flexible minimum size constraint on dark pool orders. View Article

Bloomberg: Merkel allies call for tough EU response to Libor-fixing scandal
German lawmakers demanded a tough stance on regulating Libor, with greater supervision to clarify the role of banks in setting the international benchmark. BBA is to hand over the administration of Libor to Intercontinental Exchange Benchmark Administration Ltd. on 1 February. View Article

CEPR/Perotti: The roots of shadow banking
This policy insight reviews recent work that is finally shedding some light on shadow banking, referred to by Perotti as an 'ill-defined and poorly understood segment of the financial system'. View Article

EIOPA: Insurance Stress Test 2014
Stress tests represent one of the regular supervisory tools that help to assess the resilience of the insurance sector to adverse situations and to extract valid conclusions to support the stability of the financial system. View Article

Insurance Europe: MiFID - IMD 2 best place to regulate insurance investment products
Insurance Europe believes that the agreement in trialogue to amend IMD 1 through MiFID 2 can only be seen as an interim solution, as IMD 1 will be replaced by IMD 2. It may make the implementation of the rules unnecessarily burdensome and expensive. View Article

EDHEC-Risk Institute: LTGA impact assessment and bond management - Has Solvency II reached a deadlock?
One of the factors behind the deadlock on the Omnibus II Directive vote, which has led to a delay in the implementation of Solvency II, was the calibration of bond risk under QIS5, and it could very well undermine the financial stability and financing of both businesses and sovereigns. View Article

Fitch: European insurers' investment strategies potentially rating negative
Fitch Ratings says in a new report that European insurers' investments are becoming riskier and that although the increase in risk is small and likely to remain so, it could ultimately have negative rating implications. View Article

Insurance Europe: Warning issued on US tax proposals
Responding to the US Senate Finance Committee's consultation that includes a proposal to disallow a tax reduction for certain affiliated reinsurance premiums, Insurance Europe said this would create unequal treatment for EU insurers, violating the US's international commitments and double-tax treaties. View Article

Risk.net: Group supervisors 'lack teeth' for regulating international insurance groups
Group supervisors need to have more responsibility for the regulation of internationally active insurance groups (IAIGs), according to insurers and industry lobby groups. View Article

Risk.net: Insurer global capital standard unfairly constrains loss-absorbing capital instruments
New insurer capital standards proposed by IAIS unfairly constrain the loss-absorbing instruments that insurers can use and will clash with existing regulatory regimes, insurance industry bodies are warning. View Article

MoneyMarketing: EU eyes tougher pensions regulation
Experts are warning the pensions industry is set for increasing regulatory scrutiny from Europe later this year, as the EU seeks to improve the quality of private schemes. The EU is lining up proposals and consultations affecting pensions from tough new investment rules to scheme governance. View Article

Risk.net: Banks ask Basel Committee to delay trading book impact studies
A new row between bankers and regulators is brewing, after three industry associations wrote to the Basel Committee calling for more time to complete quantitative impact studies due this year – part of the committee's push towards a new trading book capital regime. View Article

IPE: Aba backs calls for EIB to support pension investment in infrastructure
Germany's pension fund association, the aba, has called for national or European bodies to support the industry's investment in infrastructure by assessing the risk associated with individual projects. View Article

FCA publishes finalised guidance on inducements for product providers and advisory firms
In finalised guidance on inducements, the FCA makes it clear that financial advisers and product providers share the responsibility of managing potential conflicts of interests when receiving and making payments under service and distribution agreements. View Article

EDHEC-Risk Institute: The risks of closed-ended long-term debt funds
Policy-makers are anxious to support alternative sources of long-term private funding for the real economy, but if banks cannot or will not lend long, new channels of financial intermediation may be necessary. View Article

JURI Committee: Reforming EU audit services to restore investors' confidence
A draft agreement between Parliament and Council on legislation to open up the EU audit services market beyond the dominant "Big Four" firms and remedy auditing weaknesses revealed by the financial crisis was endorsed by the Legal Affairs Committee. (Includes MEP responses.) View Article

ACCA welcomes the endorsement of the compromise texts on audit by the JURI Committee
ACCA hopes that the EP and the Council will give their final nod before the end of the current legislature. View Article

Reuters: UK to review accounting changes after EU deal
Britain's Competition Commission will review changes it has ordered to prise open an accounting sector dominated by four big players after the EU agreed a tougher set of reforms. View Article

FEE publishes fact sheet on the new June 2013 Accounting Directive
The 2013 Accounting Directive provides the legal framework for single company and consolidated accounts for undertakings based in the EU that must be transposed into the national legislation of each Member State by 20 July, 2015. View Article

Reuters: Global regulators aim for single rule on bank asset valuation
Global regulators are planning the world's first common rule within three years to value hard-to-price assets held by banks, after unexpected revisions have unsettled investors. View Article

IFAC: IAESB's new standards on content of the professional accounting education programme
The IAESB has published three IESs: IES 2, Initial Professional Development-Technical Competence; IES 3, Initial Professional Development-Professional Skills; and IES 4, Initial Professional Development-Professional Values, Ethics and Attitudes. View Article

IASB/Pacter: Global accounting standards - From vision to reality
Former Board member Paul Pacter reports that a detailed study of the adoption of IFRS in 122 jurisdictions provides solid evidence that IFRS has already become the de facto global language for financial reporting. The study of additional jurisdictions is ongoing. View Article

EFRAG: The Equity Method - A measurement basis or one-line consolidation?
EFRAG has published the first paper in a new Short Discussion Series addressing topical and problematic issues in financial reporting. Views of constituents are welcomed and requested by 15 May, 2014. View Article

EFRAG: The use of information by capital providers
EFRAG has published the second paper in the EFRAG Short Discussion Series. The paper examines the implications for standard-setting, following on from the academic literature review published by EFRAG and ICAS in December 2013 on the use of information by capital providers. View Article

Deloitte commented on the recent IFRS Interpretations Committee tentative agenda decisions
Deloitte has published its comment letters on IFRS Interpretations Committee agenda decisions on IFRS 2, IFRS 10, IAS 8, IAS 17, IAS 39 and IFRIC 21. View Article

Commissioner Barnier opens high-level group on retail competitiveness
The group, which is composed of executive managers representing the different stakeholders in the retail chain, will assist the Commission in developing policies to improve the long-term competitiveness of the EU retail sector. View Article

Financial Services: Balance of EU Competences Review by HMT - Response submitted by Graham Bishop on behalf of European Movement (UK)
The central message is that the UK must step forward to regain its influence in one of the world's largest financial markets. In short, we must 'get real'! View Article

European Integration Monitor - December 2013
The driving forces of politics, finance, economics and budgets are a powerful cocktail that will intensify in the years ahead. View Article

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This week in "Brussels"

23 January 2014

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