This week in "Brussels"
16 February 2017
EBA guidelines on PD estimation, LGD estimation and the treatment of defaulted exposures, Dodd-Frank act overhaul, fight against financial crime, blockchain, MiFID II, CRAs, IFRS 16 Leases, CETA and more.
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Articles from 09 February 2017 - 16 February 2017 |
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Banking |
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EBF response to EBA consultation on Guidelines on PD estimation, LGD estimation and the treatment of defaulted exposures
The European Banking Federation (EBF) supports the technically sound and well-informed approach that the EBA is following. The use of models is central to the risk management practices and it deserves an in-depth review like the one proposed in these series of EBA guidelines. View Article |
AFME: Consultation response draft EBA guidelines on PD estimation, LGD estimation and treatment of defaulted assets
The Association for Financial Markets in Europe (AFME) is very supportive of the EBA’s IRB repair programme. AFME notes that the objective of the EBA Guidelines is to provide rules that will lead to comparability of model outcomes. The industry supports and agrees with this objective. View Article |
ECB publishes Consolidated banking data for end-September 2016
The European Central Bank (ECB) has published the end-September 2016 Consolidated banking data (CBD), a data set of the European Union (EU) banking system on a group consolidated basis. View Article |
ECB: Inside asset purchase programs: the effects of unconventional policy on banking competition
Authors test if unconventional monetary policy instruments influence the competitive conduct of banks. Using detailed security holdings data at the bank level, they show that banks exposed to this unexpected (loose) policy shock mildly gained local loan and deposit market shares. View Article |
EBA publishes final draft technical standards on exclusion from CVA of non-EU non-financial counterparties
The EBA published its final draft RTS specifying the procedures for excluding transactions with NFCs established in a third country from the capital requirement for CVA risk. The proposed RTS aim at harmonising the treatment of NFCs established in a third country across EU Member States. View Article |
BBC News: Bank warns 'lax financial rules' are a route to failure
Sir Jon Cunliffe, responsible for financial stability at the Bank of England, has warned against relaxing banking regulation, saying that such a move could damage the global economy. View Article |
The Economist: Remaking American financial regulation
Donald Trump starts a long struggle to overhaul the Dodd-Frank act. View Article |
ESAs consult on the establishment of central contact points to strengthen fight against financial crime
The Joint Committee of the three European Supervisory Authorities launched a public consultation on draft RTS to help Member States determine when payment service providers and electronic money issuers should appoint a CCP to support the fight against money laundering and terrorist financing. View Article |
Hedgeweek: Blockchain to become mainstream in financial post trade market within a few years
Blockchain will become adopted in the financial post-trade area in three to five years, according to almost half of the membership base of the Post-Trade Distributed Ledger (PTDL) Group. View Article |
British Bankers Association: Cloud Bank – helping banks balance cloud technology and compliance concerns
The public cloud provides users with access to unprecedented computing resources that can be near infinitely scaled to meet user demand. It has enabled innovation and disruption in a range of industries but has yet to really take off in banking. View Article |
Project Syndicate: The financial education of the Eurozone
EU leaders should focus in 2017 on restoring the banking sector’s credibility, by providing it with more capital and better oversight. Even if they make progress on nothing else, achieving this goal could turn 2017 into a very good year after all. View Article |
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Securities |
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ESMA revises MiFID standard on position reporting
ESMA published a revision of its draft Implementing Technical Standards on position reporting under the Markets in Financial Instruments Directive. View Article |
ESMA letter to the Commission on MiFID II systematic internalisers operating broker crossing networks
ESMA has written to the European Commission to raise its concern over the potential establishment of networks of systematic internalisers by investment firms to circumvent certain MIFID II obligations. View Article |
Paul Goldschmidt: Time to revisit the governance of Rating Agencies?
The author reviews the role of CRAs in light of new political challenges ahead such as the rise of Marine Le Pen and other nationalist parties whose plans imply modifying unilaterally the rights of the investors in French debt securities. View Article |
OMFIF: Target-2 and Germany’s election dilemmas
The euro may be the most problematic currency in 2017; the issues signalling its weakness bring great dilemmas for Germany, where voting takes place last in this year’s scheduled elections in leading EMU economies. View Article |
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Asset Management |
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Insurance Europe: Policymakers must act now to address EU pension gap
Europe faces an unprecedented challenge, as fewer workers and more retirees put a huge and growing strain on state pension systems. Policymakers must make pension systems more sustainable, encourage people to save more and remove regulatory barriers to avoid harming long-term investment. View Article |
Investment & Pensions Europe: FCA to consider market structure changes to boost 'patient capital'
The UK’s financial markets regulator is seeking feedback on market structure and regulation to assess whether they reinforce short-termism. View Article |
Investment & Pensions Europe: German finance groups outsource record level of pension liabilities
German financial services companies transferred a record volume of pension liabilities from their balance sheet to BVV, the pension fund for the sector, in 2016. View Article |
Investment & Pensions Europe: A purpose-driven performance metric for asset management?
Asset owners can help improve their managers’ performance by pushing firms to increase their “internalised purpose”, according to research. View Article |
Investment & Pensions Europe: Pension funds should be subject to governance code, say MPs
UK politicians have called for corporate governance rules to be extended to cover large pension funds and private company boards. View Article |
Hedgeweek: Majority of fund managers see upcoming regulatory environment demanding more time, says Northern Trust survey
Close to 70 per cent of fund manager clients, prospective clients and consultants attending a Northern Trust event on regulation believe that the upcoming regulatory environment will demand more of their time, compared with time spent over the past year. View Article |
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Corporate Governance/Accounting |
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EFRAG requests comments on its Draft Endorsement Advice on IFRS 16 Leases
EFRAG has issued its Draft Endorsement Advice on IFRS 16 Leases and seeks the views of constituents, in particular on its preliminary assessment of whether endorsing IFRS 16 would be conducive to the European Public Good. View Article |
Accountancy Europe comments on IAASB’s Request for Input Exploring the Growing Use of Technology in the Audit
Accountancy Europe supports the IAASB’s efforts to embrace technological innovation within their suite of ISAs. View Article |
FRC: Strong audit firm governance and leadership necessary for improved audit quality and independence
The FRC will review the governance and culture at audit firms as concerns emerge about the handling of conflicts of interest and delivery of improvements in audit quality. View Article |
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Financial Services Policy |
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Financial services: Agreement on the involvement of consumers in policymaking
Representatives of the Council and the European Parliament reached agreement on a programme to promote the involvement of consumers in policy-making in financial services. View Article |
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International/G20 |
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CETA: MEPs back EU-Canada trade agreement
The EU-Canada Comprehensive Economic and Trade Agreement (CETA), which aims to boost goods and services trade and investment flows, was approved by the European Parliament. The landmark trade deal could apply provisionally from as early as April 2017. View Article |
Bruegel: The EU should not retaliate against Trump’s protectionism
Marek Dabrowski argues that the EU would be unwise to retaliate with its own anti-import policies: the border adjustment tax would be difficult to implement and damaging to the global trade order. Instead the EU should build a broad coalition of allies to defend free trade. View Article |
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Grahams Articles, Comments & Speeches |
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127th Brussels for Breakfast – Notes
The 'Brussels for Breakfast' debate tackled the most relevant issues this month in the EU, such as the UK Government's 'Brexit White Paper; the IRSG report calling for a new, bespoke UK-EU deal; capital requirements under IFRS9 and the need to move on with the completion of CMU. View Article |
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Graham's tweets |
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© Graham Bishop
Banking