Graham Bishop.com

Main results of the ECOFIN Council: SSM / SRM
The Council took note of the ECB's first quarterly report on the SSM, and discussed the possible adjustments to the Council's general approach reached in December 2013 on the SRM. It acknowledged a need for flexibility in order to reach an agreement with the EP on the SRM before the May elections. View Article

ECON Committee: Single bank resolution mechanism and fund - Key principles for successful negotiations
The lead EP negotiators have highlighted their key criteria to ECOFIN ministers, stressing that these elements would allow for taxpayer protection, a swift and efficient decision-making process, and equal treatment of banks. View Article

Commissioner Barnier: Intervention in the SRM discussions
Barnier discussed the discrepancies between the Parliament's and the Council's positions on the SRM, suggesting compromises. View Article

Remarks by Eurogroup/Dijsselbloem at ECOFIN press conference on the special IGA/SRF ministerial meeting
The aim of the special meeting was to review the main open issues regarding the IGA that have arisen since negotiations started in January. Dijsselbloem said "quite some progress" had been made, and all participants were determined to reach an agreement by the end of March on the total package. View Article

CEPS/Gros: Europe's ungainly banking revolution
This commentary finds that the plan for the gradual constitution of a common resolution fund constitutes merely an awkward step in the right direction - it leaves as many problems unresolved as it addresses. View Article

Deposit guarantee schemes: ECOFIN Council confirms agreement with EP
ECOFIN confirmed an agreement with the EP on a recast of rules on deposit guarantee schemes. Maintaining a coverage level of €100,000 per deposit, the draft directive harmonises the framework for DGSs across the EU and enhances depositor protection, simplifying coverage and pay-out arrangements. View Article

ECON Committee backs plan to update online payment rules, cap on card payment fees
Rules governing online payments by electronic transfer need an EU-wide update, and the fees that banks charge retailers for processing shoppers' payments should be capped, said ECON MEPs. (Includes EPP/Greens comments.) View Article

ECB/Cœuré: The best safeguard against banking crises is tough supervision
In an interview with Slovenian publication Delo, Cœuré underlined the necessity for a strict and conservative approach when stress-testing banks. View Article

UK Lords Select Committee: EU plan for rescuing big banks is underfunded and unwieldy
The House of Lords EU Sub-Committee published its report looking at EU proposals for rescuing failing banks, describing them as inadequately funded, overly complicated and politically unrealistic. (Graham Bishop comments, as his evidence given on 4.6.13 was used in this report.) View Article

EBA publishes risk dashboard of EU banking sector
The risk dashboard for Q4 2013 summarises the main risks and vulnerabilities in the banking sector in the EU. It also looks at the evolution of Key Risk Indicators from 55 banks across the EU in Q3 2013. View Article

EBA publishes final draft RTS on classes of instruments used for variable remuneration
The aim of these draft RTS is to ensure that instruments for variable remuneration reflect the credit quality of an institution and incentivise prudent risk-taking, hence making them appropriate for this purpose. View Article

EBA launches discussion on the impact on the volatility of own funds
EBA published a discussion paper on the impact on the volatility of own funds of the revised IAS for employee benefits (IAS 19), and the deduction of defined benefit pension assets from own funds in accordance with the CRR. Deadline for comments is 14 April, 2014. View Article

Comments on the new US supervisory rules for foreign banks: BdB, EBF
The Federal Reserve Board has adopted the final version of tight new capital rules for foreign banks. The reform is designed to address concerns that US taxpayers will need to foot the bill if European and Asian regulators treat US subsidiaries with low priority when rescuing one of their banks. View Article

Markets in financial instruments: Council confirms agreement with EP
The Perm Reps Committee approved, on behalf of the Council, a compromise agreed with the EP on new rules on the provision of services for investments in financial instruments and on the operation of regulated financial markets. View Article

FN: Financial industry unites to face MiFID II
Brokers, fund managers and stock exchanges across Europe are planning to harmonise their input to recently-agreed securities market reforms in a rare case of coordinated industry collaboration on new regulations. View Article

FN: Europe not ruling out fresh derivatives rules
The European Commission may consider further regulation of the derivatives markets, after admitting it still has concerns on key aspects of sweeping securities markets reforms agreed in January. View Article

ESMA asks Commission to clarify derivative definition under MiFID/EMIR
In a letter to Commissioner Barnier, ESMA says the current derivative definition is not harmonised across the EU, which could have a detrimental effect on the consistent application of EMIR. View Article

FN: UK and French regulators warn on reporting rules
The FCA has added its voice to a chorus of warnings that overlapping European rules on derivatives reporting will intensify the confusion already faced by market participants as a result of new reforms coming into force. View Article

Reuters: EC takes securitisation further down rehab path
The European securitisation market is a step closer to rehabilitation after the European Commission said it could potentially allow banks to use more securitisations in their liquidity buffers, the latest sign that the tide is turning for the asset class. View Article

ESMA-EBA: Euribor makes significant progress with reforms
ESMA and EBA have published the results of their joint review of the Euribor-EBF. While the review found that Euribor-EBF has made significant progress in implementing the ESMA-EBA Recommendations, the authorities stress that benchmark reforms must continue. View Article

EIOPA/Bernardino: EIOPA's role in enhancing insurance supervision in the EU
Bernardino said that the stress test for the insurance sector would be launched on 30 April, with the results being released in November. He called for EIOPA's mandate to be enhanced, and for EIOPA's power to ban or restrict financial activities to be 'brought to life'. View Article

Risk.net: Concessions on Solvency II equivalence not followed through in level 2 proposals
The European Commission is under pressure to relax further Solvency II rules on the methods for calculating group solvency for European insurers seeking to benefit from third-country equivalence. View Article

Risk.net: IAIS valuation methodology for basic capital requirement flawed
Insurers could experience extreme balance sheet volatility under the valuation basis proposed for the new basic capital requirement, industry groups are warning. View Article

EIOPA: Towards an EU single market for personal pensions
In its report for the Commission, EIOPA explored practical ways forward for achieving economic integration to create a single market for personal pensions through scale economies, risk diversification and innovation. View Article

Main results of the ECOFIN Council: Own funds / Hedge funds
The Council decided not to object to the adoption by the Commission of: 1) a regulation on RTS for own funds requirements for banking institutions; and 2) a regulation on RTS determining types of AIFMs. View Article

Reuters: EU lawmakers delay money market, benchmark rules
EU lawmakers have delayed new rules to regulate money market funds used by big companies to park billions of euros, after they clashed over how tough the changes should be. The draft rules, and a separate draft law on regulating benchmarks, aim to make markets more transparent. View Article

FSB to review foreign exchange benchmarks
The FSB will promote adoption and implementation of principles and good practices that emerge regarding the benchmark setting process. A high-level Official Sector Steering Group (OSSG) of regulators and central banks is taking this work forward. View Article

ESMA consults on Guidelines for issuers' performance measures
ESMA has launched a consultation on Guidelines on Alternative Performance Measures (APMs). The aim of the guidelines is to encourage European issuers to publish transparent, unbiased and comparable information on their financial performance. The closing date for responses is 14 May, 2014. View Article

FEE: Letter to EBA on country-by-country reporting requirements under CRD IV
FEE is particularly concerned about the new requirements and requests the EBA to clarify certain outstanding points. View Article

Insurance Europe: IFRS requirements must be consistent
Insurance Europe expects the finalisation of the international standard for accounting for financial instruments (IFRS 9) by the IASB this week, and calls for the standard to be compatible with that proposed for insurance contracts (IFRS 4 Phase II). View Article

ACCA: Ethics should be the focus of corporate culture
According to participants at a debate hosted by ACCA in Brussels, governance can be a far-reaching tool for contributing to growth or change of direction, but over-regulation remains a concern. View Article

IAASB takes a holistic approach in its new Framework for Audit Quality
The IAASB released 'A Framework for Audit Quality: Key Elements that Create an Environment for Audit Quality'. The aim is to raise awareness of the key elements of audit quality, and encourage stakeholders to challenge themselves to do more to increase audit quality in their particular environments. View Article

ECIIA: Vote on audit reform
ECIIA looks at the details of the Commission's initiative to improve the quality and transparency of company auditing, which is likely to be voted on in the EP in mid-March. View Article

Commissioner Barnier: From crisis responses to defining a new ambition for Europe
Commissioner Barnier highlighted the main challenges the EU is facing: continuing to stabilise the European financial sector; consolidating the euro area by furthering the Banking Union and reaching an effective resolution process; and taking bold measures to boost competitiveness and growth. View Article

MEPs vote to strengthen and streamline financial supervision system
The report calls for greater efficiency and more power for ESAs, with a view to ending the power struggle with national authorities. It also calls for stronger supervision of systemic risks and solutions for conflicts of interests between the ECB and the ESRB. View Article

Commissioner De Gucht in Washington: Towards the TTIP - Stepping up a gear
Commissioner De Gucht met with US Trade Representative Froman to review progress on the TTIP. Following two days of meetings, De Gucht said that the negotiations had made good progress and now needed to step up a gear. (Includes letter from trade ministers and further comments.) View Article

TheCityUK: The danger of divergence
The Atlantic Council's report, "The Danger of Divergence: Transatlantic Financial Reform & the G20 Agenda", provides new analysis and key insights into the issues associated with financial regulatory divergence, and demonstrates the vital importance of transatlantic financial cooperation. View Article

IMF note on global prospects and policy challenges
In its assessment ahead of the G20 meeting in Sydney, the IMF says recovery from the deep global recession has been disappointingly weak and urges stronger cooperation between developed and developing countries. It warns that deflation in the eurozone is a key new risk for the world economy. View Article

ECOFIN Council conclusions on Annual Growth Survey / 2014 European Semester: Macro-economic and fiscal guidance to Member States
ECOFIN emphasised the need for continued determined and ambitious implementation of agreed policies at EU level and reform commitments as identified by the CSRs, and agreed on the five broad policy priority areas on which national and EU level efforts should concentrate in 2014. View Article

ECOFIN Council conclusions on Alert Mechanism Report 2014
ECOFIN welcomed the Commission's third Alert Mechanism Report (AMR), providing the starting point of the Macro-economic Imbalance Procedure (MIP) in the context of the 2014 European Semester. View Article

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This week in "Brussels"

20 February 2014

© Graham Bishop