This week in "Brussels"
05 July 2018
EU leaders postpone completion of banking union at European Council, Net Stable Funding Ratio, ECB report on recovery plans, BoE warns over cryptocurrency risks, Capital Markets Union, implementation of MiFID II, securitisation repositories, EFAMA “Evidence Paper” on PRIIPs rules and more.
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Articles from 28 June 2018 - 05 July 2018 |
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Banking Union |
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EurActiv: EU leaders postpone completion of banking union
Despite previous promises to achieve results on eurozone reforms in June, EU leaders postponed until December an agreement on the backstop to wind down failing banks and did not include any date for starting discussions on a European deposit guarantee scheme. View Article |
Basel Committee issues technical amendment to the Net Stable Funding Ratio
The Basel Committee on Banking Supervision has approved a technical amendment which is related to the treatment of extraordinary monetary policy operations in the NFSR. View Article |
ECB: Report on recovery plans
The purpose of this report is to share the lessons ECB Banking Supervision has learned and the best practices it has identified after three successive cycles of analysing recovery plans in order to help significant institutions (SIs) further shape their plans and make them even more operational. View Article |
IMF Blog: How to deal with failed banks
IMF study looks at the question of what to do when a bank fails. Using public funds to rescue failing banks (bail-outs) could weaken market discipline and lead to excessive risk taking—the moral hazard effect. Letting private investors absorb the losses (bail-ins) could destabilize the financial sector and the economy as a whole—the spillover effect. View Article |
EBA publishes updated ITS package for 2019 benchmarking exercise
The European Banking Authority published an update to its Implementing Technical Standards on benchmarking of internal approaches. The ITS include all benchmarking portfolios that will be used for the 2019 benchmarking exercise. View Article |
Financial Times: BoE warns banks and investors over cryptocurrency risks
Cryptocurrencies are highly volatile, vulnerable to fraud and may give rise to “reputational risks” for businesses that get involved with the assets, the deputy governor of the Bank of England wrote in a “dear CEO” letter to banks, insurers and investors. View Article |
EPC: Mobile Contactless SEPA Card Payments Interoperability Implementation Guidelines
This document provides an insight into MCPs through MCP use cases, description of MCP transaction aspects and further specifies technical and security guidelines for the different components of a mobile contactless payment solution. View Article |
EPC: 2017 SEPA Credit Transfer rulebook version 1.2
The 2017 SEPA Credit Transfer (SCT) rulebook version 1.2 has been published on 28 June 2018 and is effective as of that same day. View Article |
EPC: SEPA Credit Transfer Scheme Interbank Implementation Guidelines 2017 version 2.1
These Implementation Guidelines set out the SEPA rules for implementing the interbank ISO 20022 XML message standards based on version 1.2 of the 2017 SEPA Credit Transfer (SCT) rulebook, which took effect on 28 June 2018. View Article |
EBA does not object to the Swedish FSA proposed measures to address macroprudential risk
The EBA published an Opinion following the notification by Finansinspektionen, the Swedish Financial Supervisory Authority (FSA) of its intention to change the method it currently uses to apply a risk weight floor for Swedish mortgages through Pillar 2 by replacing it with a requirement within the framework of Article 458 of the CRR. View Article |
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Capital Markets Union |
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Vice-President Valdis Dombrovskis: "Making the Capital Markets Union work for retail investors"
Opening speech at the public hearing on making the Capital Markets Union work for retail investors. View Article |
Speech by ESMA Executive Director Verena Ross on LEI at the Banque de France Conference in Paris
ESMA Executive Director Verena Ross delivered a speech which focused on the Markets in Financial Instruments Directive and Legal Entity Identifiers. View Article |
ECMI: Funds, fees and performance
Karel Lannoo states that the implementation of MiFID II, and the unbundling requirement, will certainly have an effect, but it will take another two years before its impact on fees becomes apparent. View Article |
Bloomberg: German banks are plotting a counter-attack against MiFID II
The country’s bankers are plotting to water down the MiFID II regulations that are increasing costs and eating into what are already the lowest profit levels in northern Europe. View Article |
ESMA Consultation on draft RTS on the application for registration as a securitisation repository
ESMA published the responses received to its Consultations on the application for registration as a securitisation repository. View Article |
ESMA publishes the responses to its Consultation on securitisation repositories
ESMA published the responses received to its Consultation on securitisation repositories. View Article |
ESMA issues clarifications on the clearing obligation for pension scheme arrangements
ESMA issued a statement on the clearing obligation for PSAs, with the objective to avoid disruption to certain PSAs who may face potential challenges clearing their OTC derivative contracts on 17 August 2018, when the current, and final, exemption from the clearing obligation under EMIR expires. View Article |
ESMA publishes 2017 Annual Report
The Report contains details about ESMA’s work under each of these activities, with a focus on the key achievements in each of those areas. View Article |
ISDA: The steps to benchmark reform
ISDA Chief Executive Officer Scott O'Malia says that the reforms to interest rate benchmarks will have a big impact. ISDA and its partner trade associations have tried to help with the question of where to start with implementation, by publishing a checklist of steps firms can take now. View Article |
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Clients Union |
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Insurance Europe: Overview of consumers’ rights under GDPR
Insurance Europe has today published an overview of insurance consumers’ main rights under the General Data Protection Regulation. View Article |
EU to ban data localisation restrictions as ambassadors approve deal on free flow of data
The EU is moving to boost its data economy by creating a single market for data storage and processing services, such as cloud computing. View Article |
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Insurance |
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IAIS releases draft revised ICPs 6 and 20 for public consultation
The IAIS has released draft revised ICP 6 (Changes in Control and Portfolio Transfers) and ICP 20 (Public Disclosure) for public consultation. View Article |
IAIS has released the draft application paper on the composition and the role of the board for public consultation
The IAIS has released the draft Application Paper on the Composition and the Role of the Board for public consultation. View Article |
IAIS releases draft application paper on supervision of insurer cybersecurity for public consultation
The IAIS has released the draft application paper on supervision of insurer cybersecurity for public consultation. View Article |
EIOPA calls upon national supervisory authorities to remind insurers of their duty to inform customers about the impact of Brexit
The EIOPA published the Opinion addressed to national supervisory authorities about the duty of insurance undertakings and insurance intermediaries to inform customers about the possible impact of the withdrawal of the United Kingdom from the European Union. View Article |
Commercial Risk Europe: Insurers see value of Solvency II but concerns still exist
The majority of EU insurers have seen a positive effect from the EU’s 2016 Solvency II regulation, but there are still concerns over the cost of capital in the risk margin, and the impact of the regulation on long-term savings products with guarantees. This is according to a survey of insurers from across Europe by Insurance Europe. View Article |
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Asset Management |
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EFAMA “Evidence Paper” on PRIIPs rules confirms shortcomings of the regulation for investors
Six months into the implementation of the new PRIIPS rules, EFAMA has published an “Evidence Paper” which explains the shortcomings of the new PRIIPs Key Information Document rules based on “real life” data from its corporate members. View Article |
Investment & Pensions Europe: UK regulator heeds ESMA call for discretion over clearing obligation
Europe’s top financial regulator has suggested to national supervisors that they do not force pension funds to abide by derivative clearing rules when an exemption expires next month. ESMA told regulators to “not prioritise” enforcing the rules introduced as part of EMIR. View Article |
ESMA hosts workshop for national supervisors on closet indexing
The European Securities and Markets Authority held a supervisors’ workshop for National Competent Authorities (NCAs) to promote supervisory convergence in NCAs’ supervision of closet indexing. View Article |
EFAMA publishes the 16th edition of its Fact Book
The publication date of the Fact Book has been brought forward from September to July in order to provide readers with more timely data and analysis. View Article |
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Corporate Governance/Accounting |
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IASB: Issue 16 of the Investor Update published
The IASB Investor Update aims to make it easy for investors to keep up with changes in the world of IFRS Standards and how those changes may affect an investor's day job. View Article |
IASB/Hoogervorst: IFRS Standards as enlightened self-interest
The IASB has published its Chair's speech on the topic “IFRS Standards as enlightened self-interest” which summarises the use of IFRS Standards around the world and the current thinking of the IASB. View Article |
IASB: Consultation on the accounting for financial instruments with characteristics of equity
The IASB has published for public comment a Discussion Paper on how companies issuing financial instruments should classify them in their financial statements. View Article |
ACCA: EU Company Law 'upgraded' package - making the best use of digital solutions and cross-border mobility
ACCA, BusinessEurope and UEAPME organised a discussion with European decision-makers and stakeholders to shed light on recent EU company law developments and how to make the best of digital solutions and cross-border mobility. View Article |
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Market Abuse |
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AMF establishes liquidity contracts on shares as an accepted market practice
The Autorité des marchés financiers has decided to establish an accepted market practice for liquidity contracts on shares taking into account the opinion provided by ESMA on 11 April 2018. In effect from 1 January 2019, this practice will be reviewed after a two-year period. View Article |
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Financial Services Policy |
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EBA assesses risks and opportunities from Fintech and its impact on incumbents business models
The European Banking Authority (EBA) published the first products of its FinTech Roadmap, namely a thematic report on the impact of FinTech on incumbent credit institutions' business models and a thematic report on the prudential risks and opportunities arising for institutions from FinTech. View Article |
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Political |
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The Guardian: Competing visions of Europe are threatening to tear the union apart
EU leaders have never been more divided about the very nature of the project – with Merkel, Macron and Orban split on fundamental issues, writes Hans Kundnani. View Article |
The European Council establishes the composition of the European Parliament
The decision sets out the number of representatives in each member state to be elected to the European Parliament for the 2019-2024 parliamentary term. View Article |
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Economic |
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European Council conclusions
The European Council on 28 June adopted conclusions on: migration, security and defence, jobs, growth and competitiveness, innovation and digital, and on other issues. View Article |
ECB announces methodology for calculating Euro Short-Term Rate (ESTER)
The Governing Council of the European Central Bank has decided on the final methodology for calculating the Euro Short-Term Rate – an overnight unsecured rate based entirely on money market statistical reporting (MMSR), which will start to be published by October 2019. View Article |
Volume of retail trade unchanged in euro area
In May 2018 compared with April 2018, the seasonally adjusted volume of retail trade did not change in the euro area and increased by 0.3% in the EU28, according to estimates from Eurostat. View Article |
June 2018: Economic Sentiment broadly stable in the euro area, slightly down in the EU
In June, the Economic Sentiment Indicator (ESI) remained virtually unchanged in the euro area for the third consecutive month, registering a marginal decrease of 0.2 points (to 112.3). In the EU the indicator edged down by 0.6 points (to 112.2). View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union