This week in "Brussels"
12 July 2018
Draghi urges countries to complete banking union, EBA on passporting, G-SIB framework, banking resolution, Benchmarks Regulation, EMIR, MiFID II, IFRS standards and more.
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Articles from 05 July 2018 - 12 July 2018 |
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Banking Union |
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EurActiv: Draghi urges countries to complete banking union as risks fall
European Central Bank President Mario Draghi has urged eurozone member states to complete the banking union with a European Deposit Insurance Scheme, noting the “substantial” reduction of risks in the banks’ balance sheets and the benefits of risk-sharing. View Article |
EBA peer review shows competent authorities have robust and consistent procedures to comply with RTS on passport notifications
The EBA published the final peer review Report on the Regulatory Technical Standards (RTS) on the information to be notified when exercising the right of establishment and the freedom to provide services for credit institutions. The Report summarises the main findings of the peer review exercise. View Article |
Basel Committee issues revised G-SIB framework
The BCBS released the Global systemically important banks (G-SIB): revised assessment methodology and the higher loss absorbency requirement. When the BCBS first published the G-SIB framework in 2011, it agreed to review the framework every three years to allow for the opportunity to enhance the framework, as needed. View Article |
BIS: Financial stability implications of a prolonged period of low interest rates
This report identifies and provides evidence for the channels through which a "low-for-long" scenario might affect financial stability, focusing on the impact of low rates on banks and on insurance companies and private pension funds (ICPFs). View Article |
European Parliament: Valuation reports in the context of banking resolution: What are the challenges?
This paper gives an initial assessment of the preparation of valuation reports in resolution. It finds that there are still substantial uncertainties regarding the outcome of these valuations due to organisational, legal and economic challenges. View Article |
BIS' Restoy: Proportionality in banking regulation
Fernando Restoy, Chairman of the BIS' Financial Stability Institute, reviews the concept, motivation and the constraints associated with the proportionality principle, and he compares the different approaches in various jurisdictions. View Article |
OMFIF: Target-2 masks reduced fragmentation
The claims of the Bundesbank on the ECB through the Target-2 system are approaching €1tn. What do these claims represent? Are they simply a consequence of the complex mechanics related to the construction of the Eurosystem and how it implements monetary operations? View Article |
FCA: Building the UK financial sector’s operational resilience discussion paper
The Bank of England, Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have published a joint discussion paper on an approach to improve the operational resilience of firms and financial market infrastructures (FMI’s). View Article |
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Capital Markets Union |
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ESMA statement at ECON scrutiny session on Benchmarks Regulation
Introductory statement for ECON scrutiny session on Level 2 measures under the EU Benchmarks Regulation (BMR) of Jakub Michalik, Senior Officer at ESMA's Corporate Affairs Department. View Article |
ESMA consults on the clearing obligation under EMIR
ESMA’s consultation deals with an amending draft RTS regarding the treatment of intragroup transactions with a third country group entity. It seeks stakeholders’ views on a proposed extension of the temporary intragroup exemption. View Article |
MiFID II: ESMA issues latest double volume cap data
ESMA updated its public register with the latest set of double volume cap (DVC) data under the Markets in Financial Instruments Directive. View Article |
PCS: Helping transition to the STS Regime
PCS issued two documents designed to assist market stakeholders to prepare for the new STS securitisation regime coming into force in January of next year. View Article |
Marketing of financial instruments: the AMF publishes the summary of the good and bad practices observed during its inspections
Between the end of 2016 and the end of 2017 the Autorité des Marchés Financiers conducted a series of inspections relating to the marketing of various financial instruments among a population of an advanced age. View Article |
ICMA Quarterly Report
The report covers other international capital market practice and regulatory developments in the primary markets, secondary markets, repo and collateral markets, asset management, and green, social and sustainable bond markets. View Article |
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Clients Union |
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Antitrust: Commission consults stakeholders on draft guidelines to help national courts estimate the economic harm caused by cartels
The European Commission is inviting comments on draft guidelines to help national courts estimate the share of price increases caused by a cartel that are passed on to indirect purchasers and final consumers. View Article |
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Insurance |
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EIOPA issues Mediation Opinion regarding the determination of the correct insurance class for statutory risks
The European Insurance and Occupational Pensions Authority (EIOPA) published its Mediation Opinion regarding the determination of the correct insurance class for the insurance policy known as "statutory risks" in France. View Article |
EIOPA seeks evidence on the use of Big Data
The European Insurance and Occupational Pensions Authority (EIOPA) launched a European Union-wide thematic review on Big Data as a follow-up to the European Supervisory Authorities' cross-sectorial review of the use of Big Data published in March this year. View Article |
Commercial Risk Europe: Insurers increasingly use reinsurance for earnings protection and volatility reduction
Risk appetite is increasingly central to insurers’ business decisions, according to Willis Towers Watson’s latest survey. The Global Reinsurance and Risk Appetite Survey Report 2017/2018 reveals that insurers are becoming less tolerant of missed earnings targets as a result of pressure from investors, and are increasingly turning to more sophisticated metrics, such as return on equity and economic capital. View Article |
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Asset Management |
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Investment & Pensions Europe: IMF questions German coalition government pension measures
The International Monetary Fund (IMF) has indirectly criticised Germany’s coalition government’s pension reform plans, saying there were better ways to support adequate replacement rates than the measures it has pledged. View Article |
Investment & Pensions Europe: Japanese pension funds rethink asset allocation strategies – survey
Japanese pension funds are rewriting their asset allocation strategies in response to shrinking returns from traditional assets, according to a newly-published survey. The 11th annual survey of the sector by JP Morgan Asset Management (JPMAM) found that today’s priority among Japanese pension funds is international diversification. View Article |
Investment & Pensions Europe: Dutch regulators follow ESMA's advice on central clearing
Dutch financial supervisors DNB and AFM have said they will not force pension funds to conduct derivatives transactions through central clearing if an expected extension of the current European exemption for pension funds comes too late. View Article |
Investment & Pensions Europe: UK regulator backs voluntary cost disclosure templates
Asset managers doing business in the UK have been encouraged to sign up to a new voluntary cost disclosure regime launching later this year. Five templates for displaying asset management costs have been proposed by the Institutional Disclosure Working Group (IDWG) – a collaboration between asset owner and asset manager representatives commissioned by the FCA. View Article |
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Corporate Governance/Accounting |
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EBA and ESMA publish guidelines on suitability assessment for management body members and key function holders
EBA and ESMA have published their joint Guidelines to assess the suitability of members of management bodies and key function holders. View Article |
EFRAG requests comments on its draft endorsement advice on amendments to references to the conceptual framework in IFRS standards
EFRAG is consulting on its assessment of Amendments to References to the Conceptual Framework in IFRS Standards. View Article |
FT: Public Company Accounting Oversight Board to examine auditors’ ‘going concern’ reporting
The PCAOB has promised to examine whether market intervention is necessary to strengthen investor confidence in auditors’ “going concern” statements — crucial judgments that indicate whether a company is viable for the next 12 months. View Article |
IASB: Supporting IFRS 17 implementation
The IASB has published educational materials for insurance contracts issued by mutual entities as part of its activities to support the implementation of IFRS 17 Insurance Contracts. View Article |
IASB: Reducing the gap between insurance and other industries
IASB Member Gary Kabureck outlines the similarities between key requirements in IFRS 17 and those in other IFRS Standards. View Article |
ACCA, MSI Global Alliance: MoU to strengthen legal & accountancy skills
ACCA and MSI Global Alliance have signed a memorandum of understanding to collaborate on projects aimed at developing the skill-sets of the legal and accountancy professions. View Article |
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Anti-Money Laundering |
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European Parliament: Cryptocurrencies and blockchain
The paper focuses on the phenomenon of criminals who are increasingly using cryptocurrencies for illegitimate activities such as financial crime, money laundering and tax evasion. It contains policy recommendations for future EU standards. View Article |
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Financial Services Policy |
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The AMF publishes its 2018 markets and risk outlook
The analysis highlights a number of uncertainties on how the markets will function after the March 2019 Brexit deadline or following structural changes due to the implementation of new regulations. View Article |
ISDA Response on ECON Cross-border Regulation Consultation
ISDA’s comment paper supports a risk-based approach to the evaluation and recognition of the comparability of regulatory regimes in third-country jurisdictions, in line with its September 2017 white paper on the issue. View Article |
Commercial Risk Europe: Rushed blockchain projects creating cyber risk ‘blindspots’, warns RSA Security
Businesses pushing through blockchain-driven projects risk new cyber vulnerabilities with some financial services companies, in particular, “rushing” such technology before checking blindspots in security systems, warns RSA Security. View Article |
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Grahams Articles, Comments & Speeches |
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Brussels and Chequers: a lacklustre performance - 143rd Brussels for Breakfast – CPD Notes
PM May’s Pyrrhic victory at Chequers gave support to her ‘soft Brexit’ proposal but at the cost of three of her most vocal ministers. EU officials hinted at flexibility towards the new plan, now that their biggest and most debated project - the banking union - has been put to rest until December. View Article |
Italian Banks… More improvements ahead
Graham Bishop writes in Financial World that, if the benign conditions continue, then there should be time for Italian banks to deal with their massive – but increasingly manageable – legacy of bad loans. View Article |
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Friends Services |
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Brussels and Chequers: a lacklustre performance - 143rd Brussels for Breakfast – CPD Notes
PM May’s Pyrrhic victory at Chequers gave support to her ‘soft Brexit’ proposal but at the cost of three of her most vocal ministers. EU officials hinted at flexibility towards the new plan, now that their biggest and most debated project - the banking union - has been put to rest until December. View Article |
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Economic |
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ECB's Mersch: Deepening EMU – political integration and economic convergence
Yves Mersch urged lawmakers to pursue more actively fiscal and structural reforms; to further reduce risks and fragmentation in the financial sector; and to decisively strengthen the institutional architecture of EMU. View Article |
BIS: Prolonged low interest rates could affect financial stability, central banks find
Low market interest rates for a long time could have implications for financial stability as well as for the health of individual financial institutions, a report by the Committee on the Global Financial System finds. View Article |
EU-Japan: Council adopts decision to sign trade agreement
The Council adopted a package of decisions on the economic partnership agreement with Japan (EPA), including a decision on the signature of the agreement and a decision to request the consent of the European Parliament for the conclusion of the agreement. View Article |
EU budget for 2019: Council agrees its position
EU ambassadors agreed the Council's position on the 2019 EU draft budget in advance of negotiations with the European Parliament. View Article |
ECA to examine VAT and customs duties in e-commerce
The ECA is conducting an audit to find out how effectively the EU is addressing the challenges posed by e-commerce in terms of VAT and customs duties. View Article |
EU28 current account surplus €63.9 bn
The EU28 seasonally adjusted current account of the balance of payments recorded a surplus of €63.9 billion (1.6% of GDP) in the first quarter of 2018, down from a surplus of €68.0 billion (1.8% of GDP) in the fourth quarter of 2017. View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union