This week in "Brussels"
30 November 2017
Non-performing loans, Bank of England's Financial stability report, MiFID II, Banking Union, foreign exchange global code of conduct and more.
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Articles from 23 November 2017 - 30 November 2017 |
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Banking Union |
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ECB: Overcoming non-performing loan market failures with transaction platforms
Transaction platforms can help deal with Europe’s high stock of non-performing loans, a special feature of the upcoming Financial Stability Review finds. But this would also require structural changes aimed at expanding the investor base. View Article |
EBA sees a more resilient EU banking sector but challenges in NPLs, IT security and long-term profitability remain
The European Banking Authority published its tenth report on risks and vulnerabilities in the EU banking sector. The report is accompanied by the 2017 EU-wide transparency exercise, which provides key data in a comparable and accessible format for 132 banks across the EU. View Article |
Bank of England: Financial stability report, November 2017
The 2017 stress test shows the UK banking system is resilient to deep simultaneous recessions in the UK and global economies, large falls in asset prices and a separate stress of misconduct costs. View Article |
Deutsche Bundesbank publishes its 2017 Financial Stability Review
The Review saluted persistently low interest rates and strong growth; warned that risks might be underestimated and that they can be mutually reinforcing in the financial system; and sounded the alarm over the resilience of the financial system, saying it might be overstated. View Article |
CEPS: A Blueprint for Completing the Banking Union
Completing the banking union is an urgent project facing the EU, given the eurozone’s continued vulnerability to idiosyncratic liquidity shocks to national banking systems. Stefano Micossi proposes guidelines for achieving such an objective. View Article |
VoxEU: Banks as buyers of last resort for government bonds
A key remaining issue for the completion of the Banking Union is the concentrated exposure of banks to their own sovereign. This column argues that the belief that banks should be allowed to buy large amounts of their own sovereign so they can stabilise the market in a crisis is mistaken. View Article |
EBA formally repeals its Guidelines on retail deposits subject to different outflows for the purpose of liquidity reporting
EBA repealed its Guidelines on retail deposits subject as they have been superseded by the LCR Delegated Regulation. View Article |
EBF: Banks step up commitment to financing growth
European banks, represented by the Board members of the European Banking Federation, agreed to step up their work on funding the real economy with a priority focus on financing the energy transition and on the rapid digital shift in the global banking sector. View Article |
Bank of England: Bank and FCA launch next phase of sterling Libor transition work
The Bank of England and the Financial Conduct Authority announced the next phase of work with market participants on Libor transition. From January 2018, the market-led Working Group on Sterling Risk-Free Rates will have an extended mandate and broader participation. View Article |
ECB: Call for expressions of interest to participate in the working group on euro risk-free rates
This call is also being issued on behalf of the Belgian Financial Services and Markets Authority (FSMA), the European Securities and Markets Authority (ESMA) and the European Commission. The new working group’s terms of reference are also published and its work will be guided by them. View Article |
ECB: Statement of commitment to foreign exchange global code of conduct
All central banks in the European System of Central Banks (ESCB) are strongly committed to supporting and promoting adherence to the Foreign Exchange Global Code of Conduct. 15 of the ESCB central banks, including the ECB, simultaneously issued Statements of Commitment to the Code. View Article |
Deutsche Bundesbank's Dombret: Too little, too much, or just right? Reforming banking regulation after the financial crisis
Speech by Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, in which he revisits the topic of “Ways to a stable financial system”. View Article |
EBF: Online payment standards still face obstacles
The European Banking Federation notes that the European Commission adopted its regulatory and technical standards for the second EU Payment Services Directive, known as PSD2, designed to allow consumers to access more convenient and innovative payment solutions. View Article |
PSD2/RTS on strong customer authentication and secure communication, IFR/RTS on separation of payment card schemes and processing entities
This briefing supports ECON’s work on scrutiny of delegated acts, in particular the discussion on the RTS on Strong Customer Authentication and Secure Communication to be adopted by the EC under Article 98 of the revised Payment Services Directive (PSD2). View Article |
ECB: Policy analysis with big data
Benoît Cœuré, Member of the Executive Board of the ECB, told an audience that micro data collected by central banks themselves, in particular data on transactions between banks, have already proven to be an additional valuable guide for policymakers in devising policy responses. View Article |
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Capital Markets Union |
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ESMA publishes MiFID compliance function peer review results
The Review found a high level of compliance by the majority of EEA national competent authorities with the Guidelines, although significant weaknesses were identified in the supervisory approaches of Cyprus, Iceland and the Netherlands. View Article |
POLITICO: ESMA letter reveals MiFID II concerns related to Brexit
The EU’s markets watchdog has written to the European Commission to warn on the effectiveness of new trading and transparency rules for firms outside the bloc. This is a particularly pertinent issue due to Brexit. View Article |
The Economist: In a pre-Brexit skirmish with the City, Eurex takes on LCH
Eurex’s clearing division said that so far around 20 banks, including lots of heavyweights, had joined a “partnership programme” to boost its interest-rate business. View Article |
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Clients Union |
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Financial Times: UK banks prepare to share customer data in radical shake-up
The General Data Protection Regulation will force banks to hand access to retailers and tech groups. View Article |
BoE's Carney speech at the FICC Market Standard Board “Two years on from the Fair and Effective Markets Review”
Mark Carney said the City “has a special responsibility to address the root causes of misconduct given its pre-eminent position in global markets.” View Article |
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Insurance |
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Commercial Risk Europe: EIOPA to focus on enhancing supervisory convergence
The European Insurance and Occupational Pensions Authority announced that in the next three years, one of its key priorities is to further enhance supervisory convergence, with the aim to move towards a common European supervisory culture. View Article |
IAIS extends deadline for submitting comments for public consultation: ICPs 8,15 and 16
The deadline for submitting comments for the public consultation on the draft revised ICPs 8, 15, 16; the ComFrame material integrated with these ICPs; and the proposed definitions of enterprise risk management-related terms have been extended. View Article |
François Villeroy de Galhau: Insurance and pensions - institutional innovation, economic innovation, technological innovation
The Governor of the Bank of France focuses on three kinds of innovation that can lead us to rethink insurance and pensions: institutional innovation, economic innovation and technological innovation. View Article |
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Asset Management |
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ALFI response to the European Commission consultation on its legislative proposal for an EU framework on crowd and peer to peer finance
This initiative is part of the Commission's priority of establishing a Capital Market Union. Broadening access to finance for SMEs, in particular for innovative companies, start-ups and scale-ups, is at the heart of the 2015 CMU Action Plan. View Article |
IOSCO report provides new data on global hedge fund industry
The Board of the IOSCO published its Report on the Fourth IOSCO Hedge Fund Survey, which provides regulators new insights into the global hedge fund industry and the potential systemic risks this industry may pose to the international financial system. View Article |
IOSCO Good practices for the termination of investment funds seek to protect investors
The Board of the International Organization of Securities Commissions published 14 good practices on the voluntary termination of investment funds that seek to protect investors’ interests during the termination process. View Article |
Investment & Pensions Europe: EIOPA to gather pension scheme data through local supervisors
European pensions supervisor EIOPA will stick to its plan to mine data about individual pension funds, but will do so through local regulators. View Article |
ALFI surveys confirm: Real assets move into the focus of asset managers and investors
Three surveys issued by ALFI confirm the trend towards the simplification of Real Estate Fund structures and strategies; that Luxembourg’s fund structuring toolbox attracts large international Private Equity houses; and how loan funds fill the financing gaps by investing in real asset classes. View Article |
Investment & Pensions Europe: Blockchain ‘promising but still far off’
Although the concept of blockchain is promising, the introduction of the technology is still a long way off as many issues still need solving, according to currency experts. Speaking at the IPE Conference, Martijn Vos, managing director of pensions and insurance at Ortec Finance, said he “strongly believed” in the technology. View Article |
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Corporate Governance/Accounting |
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FRC: Investors note improved information on risk, but more needed on viability reporting
Investors want a better understanding of how boards identify and manage risk to protect the sustainability of companies, according to a report from the FRC’s Financial Reporting Lab, which sought to understand how companies can better inform investors on the risks they face and their viability. View Article |
ICGN calls for benchmark stock indices to disallow shares with differential ownership rights
The ICGN issued a new Viewpoint discouraging the inclusion of non-voting or limited voting shares in benchmark stock indices. View Article |
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Economic |
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ECB: Economic growth is supporting financial stability but markets are vulnerable to a sudden increase in volatility
Systemic stress indicators for the euro area have remained low over the past six months, according to the latest Financial Stability Review of the ECB. Better growth prospects as well as lower fiscal and external imbalances contributed to reduced systemic stress indicators for the euro area, according to the report. View Article |
Bruegel: How should the European Central Bank ‘normalise’ its monetary policy?
During the crisis, the ECB resorted to a number of unconventional monetary tools. This paper discusses how to phase out these policies and what the ‘new normal’ in monetary policy should look like. View Article |
New Europe: European Commission to announce European Monetary Fund on December 6
The European Commission will propose on December 6 the transformation of the European Stability Mechanism into a European version of the International Monetary Fund, El Pais reported. View Article |
November 2017: Economic Sentiment continues to rise in the euro area, broadly stable in the EU
In November, the Economic Sentiment Indicator (ESI) for the euro area improved again, increasing slightly by 0.5 points to 114.6. The indicators reached the highest levels since October 2000 (euro area) and June 2007 (EU). The UK saw the largest decline (-1.5). View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union