This week in "Brussels"
27 September 2018
Basel Committee meeting, ECB guide to on-site inspections and internal model investigations, EBA's 2018 EU-wide transparency exercise, AFME report setting KPIs to track the progress of CMU, MiFID II tightening equivalence rules, ESMA agrees to limit the application of tick sizes and more.
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Articles from 20 September 2018 - 27 September 2018 |
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Banking Union |
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BCBS discusses a range of policy and supervisory issues, takes stock of its members' implementation of post-crisis reforms
The Basel Committee met in Basel on 19-20 September and finalised stress-testing principles, reviewed ways to stop regulatory arbitrage behaviour, agreed on annual G-SIB list, and discussed leverage ratio, crypto-assets, market risk framework and implementation. View Article |
ECB: Guide to on-site inspections and internal model investigations
The Guide describes the inspection process, from the decision to launch the inspection to the follow-up stage, and sets out the best practices to foster fruitful cooperation between the entities being inspected and the inspection teams. View Article |
EBF comments on the draft EBA guidelines on outsourcing
Outsourcing arrangements are widely used by the banking industry as they contribute to the efficiency and to the competitiveness of banks’ business models. Outsourcing indeed helps banks focus on their core business and gives them access to skills and services that are not available in house at the same level of efficiency and/or effectiveness. View Article |
EBA launches its 2018 EU-wide transparency exercise
In December 2018, together with the Risk Assessment Report (RAR), the EBA will release over 900000 data points on about 130 EU banks. The data will cover capital positions, risk exposure amounts, sovereign exposures and asset quality. This data disclosure is an important component of the EBA's responsibility to monitor risks and vulnerabilities and foster market discipline. View Article |
ECB: Waiting for ESTER: the road ahead for interest rate benchmark reform
Benoît Cœuré, Member of the Executive Board of the ECB, explained the need for a new benchmark and the process of creating it. View Article |
Financial Times: Regulation, Brexit and bad loans to dent banks’ profits 40% by 2022
Increasing regulatory scrutiny, Brexit-related costs, rising bad loan provisions and low interest rates are poised to dent European banks’ profitability by 40 per cent over the next five years, according to a new study by German banking consultancy Zeb. View Article |
Financial Times: European banks seek lighter-touch regulation in the US
European banks and US senators are warning that America’s banks face retaliation overseas if the lighter-touch regime promised to domestic lenders is not extended to foreign competitors. View Article |
Vox EU: Foreign expansion, competition, and bank risk
This column explores how banks’ decisions to enter foreign markets impacted their individual and systemic risk. Results from a sample of European banks suggest that banks’ foreign expansions decreased risk from both an individual and systemic viewpoint. The findings cast doubt on the idea that banking globalisation was one of the culprits behind the crisis. View Article |
Bruegel: Excess liquidity and bank lending risks in the euro area
Authors argue that excess liquidity is not a good indicator of whether banks’ have more incentives in risk-taking and look at indicators that might signal that bank lending in the euro area creates undue risks. View Article |
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Capital Markets Union |
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AFME: Trade bodies representing key capital markets participants publish KPIs to track the progress of CMU
AFME published a new report tracking the progress to date of the European Commission’s flagship Capital Markets Union project through seven Key Performance Indicators (KPIs). View Article |
Bloomberg: UK finance dealt another Brexit blow by Brussels lawmakers
UK-based firms would probably need to open a unit in the EU to continue underwriting stocks and bonds and doing market-making business for clients in the bloc under draft legislation endorsed by a European Parliament committee. View Article |
ESMA agrees to limit the application of tick sizes to systematic internalisers quotes for shares and depositary receipts
ESMA, considering the need to address the application of tick sizes to systematic internaliser (SIs) quotes in a timely fashion, has agreed to limit the application of tick sizes to quotes of SIs to shares and depositary receipts. View Article |
ESMA: What drives the use of CDS by EU investment funds?
As part of ongoing efforts to improve the monitoring of derivatives markets, this article investigates the drivers of credit default swaps usage by UCITS investment funds. View Article |
ESMA monitors volatility in financial markets
ESMA set out the details of its analysis of volatility in financial markets. View Article |
ESMA updates its EMIR Q&As
The purpose of these Q&As is to promote common supervisory approaches and practices in the application of EMIR. View Article |
ESMA updates Q&A on MiFIR data reporting
ESMA issued an update of its Q&As regarding data reporting under the Market in Financial Instruments Regulation (MiFIR). View Article |
ESMA finds deterioration in liquidity in stressed financial markets for both sovereign and corporate bonds
The study, reporting on different aspects of market liquidity, shows that the situation differs significantly between sovereign and corporate bonds. View Article |
ESAs’ Joint Board of Appeal decides on an individual’s appeal against a decision of ESMA in relation to binary options and contracts
ESAs published a decision in an appeal brought by "V" against the European Securities and Markets Authority. View Article |
ISDA and US chamber center for capital markets competitiveness publish CFTC-SEC safe harbor recommendation
The proposed safe harbor would allow firms to rely on their compliance with one commission’s rules to satisfy comparable requirements set by the other commission. View Article |
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Clients Union |
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ACCA: Human rights metrics - reaching scale through the Sustainable Finance agenda
European and international experts discussed reaching scale on high-quality human rights metrics through the sustainable finance agenda. View Article |
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Insurance |
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EIOPA: Newly appointed Members of EIOPA’s Insurance and Reinsurance Stakeholder Group elect its Chair and Vice Chair
The EIOPA Insurance and Reinsurance Stakeholder Group Members elected Greg van Elsen as its Chair and Michaela Koller, Director General of Insurance Europe, as the Group's Vice Chair representing the insurance industry. View Article |
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Asset Management |
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EFAMA: Assets under Management in Europe rose to EUR 25 trillion in 2017
The EFAMA has published the 10th Edition of its Asset Management Report. The report focuses on the value of assets managed by regulated third-party asset managers in Europe, providing detailed data on the location of the asset management activity, the asset owners, the evolution of the asset allocation, and the contribution of the industry in terms of employment. View Article |
Investment & Pensions Europe: Pension funds ‘should begin derivatives clearing now’ to save costs
The cost of using derivatives is set to climb by as much as 10 times current levels under new European rules, according to analysis firm OpenGamma – and pension funds should act soon. View Article |
Financial Times: Legacy of Lehman Brothers is a global pensions mess
Pension funds have taken on many of the risks that were once held by banks. Low bond yields, which make it more expensive to guarantee an income, have forced them to take extra risks. View Article |
EFAMA appoints Tanguy van de Werve as its new Director General
EFAMA has announced the appointment of Tanguy van de Werve as its new Director General. Mr Van de Werve will take up his position on 1st January 2019. View Article |
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Corporate Governance/Accounting |
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IFAC and IIA: New report outlines keys to sound governance
Effective governance is the outcome of a mosaic of organizational policies, processes, and cross-functional interactions, according to experts featured in a new report from the IIA and IFAC. View Article |
ACCA: One in two finance organisations admit failing to embrace robotics and risk becoming irrelevant
A new report commissioned by ACCA, CA ANZ and KPMG explores the significant opportunities automation presents for the finance function, after results found many CFOs are still uncertain how implementing robotics solutions can be applied to benefit their finance functions. View Article |
ECA: Putting EU law into practice effectively is essential for delivering results
This was the first time the ECA, as the guardian of the EU’s finances, has looked in a focused manner and from a cross-cutting perspective at a topic related to the application of EU law. View Article |
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Anti-Money Laundering |
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POLITICO: EU watchdog to probe Danish, Estonia supervisors over Danske Bank
The EU’s banking watchdog is set to probe the actions of Denmark and Estonia’s national supervisors to see how they failed to pick up on Danske Bank’s massive money laundering scandal — and if their actions broke EU laws. View Article |
EBA notifies the European Commission and MEPs on the outcome of its enquiry into the application of EU law on AML in Malta
The EBA notified the European Commission and Members of the European Parliament on the outcome of its enquiries in relation to the application of EU law on anti-money laundering (AML) in Malta by the Malta Financial Services Authority (MFSA). View Article |
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Financial Services Policy |
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OMFIF: Christine Lagarde: A regulatory approach to fintech
The IMF Director Christine Lagarde explains why some enthusiasts say crypto assets may represent the beginning of a breakthrough similar to that of Alexander Graham Bell's telephone. View Article |
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Economic |
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ECB's President Mario Draghi: Economic and Monetary Union: past and present
The President of the ECB highlighted the key planks to a successful EMU: advancing the single market agenda through completing banking union and capital markets union. View Article |
EurActiv: Draghi warns on protectionism as a risk for the Eurozone
The Eurozone should prepare for US and China protectionist measures if they materialise, President of the European Central Bank Mario Draghi said at the European Parliament. View Article |
VAT: EU Member States still losing almost €150 billion in revenues according to new figures
EU countries lost almost €150 billion in Value-Added Tax (VAT) revenues in 2016, according to a new study published by the European Commission. View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union