This week in "Brussels"
17 January 2019
EBA report on cost and performance of structured deposits, assessment of the consistency of internal model outcomes, Basel Committee work programme, ECB Annual Report, Leverage ratio, MiFID II latest double volume cap data, Commission report on the operation of the AIFMD and more.
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Articles from 10 January 2019 - 17 January 2019 |
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Banking Union |
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EBA publishes report on cost and performance of structured deposits
The report is a response to a request the EBA had received from the EU Commission as part of the implementation of its CMU Action Plan and concludes that the market for structured deposits in the EU appears to be limited in size and that data on costs and performance is not widely available. View Article |
EBA releases its annual assessment of the consistency of internal model outcomes
The European Banking Authority published two reports on the consistency of risk weighted assets (RWAs) across all EU institutions authorised to use internal approaches for the calculation of capital requirements. View Article |
BIS: Governors and Heads of Supervision endorse finalised market risk capital framework and Basel Committee work programme
The Basel Committee's oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), endorsed a set of revisions to the market risk framework and the Committee's strategic priorities and work programme for 2019. View Article |
ECB: CoMap: mapping contagion in the euro area banking sector
Key findings highlight that the degree of bank-specific contagion and vulnerability depends on network specific tipping points affecting directly the magnitude of amplification effects. View Article |
ECB: Debate about the Annual Report
Mario Draghi, President of the European Central Bank, discussed with MEPs the ECB’s activities and the European Parliament draft resolution on the ECB’s Annual Report 2017. View Article |
ECB publishes first statistics on secured euro money market
The data series include information on the total turnover and average rate for the 2018 maintenance periods, broken down by transaction type and maturity. The statistics are based on data from the 50 largest euro area banks. By publishing these figures, the ECB aims to enhance market transparency and therefore improve money market functioning. View Article |
European Commission: Evaluation of the consumer credit directive
The evaluation will assess the effectiveness, efficiency, coherence, relevance and EU added value of the Consumer Credit Directive. It will focus on progress made to date, costs and benefits in relation to different stakeholders and whether original objectives and tools of the Directive correspond to current needs. View Article |
Financial Times: Challenger banks complain about barriers to growth
The chief executive of one mid-sized bank said that while the UK has “got rid of a lot of the barriers to entry”, it has added “barriers to growth”. View Article |
Financial Times: Banks brace for next wave of digital shake-up
When British banks were forced to open up their customer data to rival lenders and digital upstarts a year ago, would-be innovators promised a flood of new products that would herald the biggest shake-up in retail banking for decades. View Article |
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Capital Markets Union |
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Comments on Leverage ratio treatment of client cleared derivatives
ISDA, GFMA and IIF remain supportive of the endeavours of the Basel Committee to implement the leverage ratio as a simple, transparent and non‐risk‐based backstop to the risk‐based requirements. View Article |
MiFID II: ESMA issues latest double volume cap data
The updates include DVC data and calculations for the period of 1 December 2017 to 30 November 2018 as well as updates to already published DVC periods. View Article |
ICMA ERCC publishes a briefing note on the European repo market at 2018 year-end
This report documents and analyses repo market behaviour through 2018 year-end. Compared with the previous two year-ends, 2018 was relatively uneventful. View Article |
Financial Times: The euro already has a safe asset
Martin Sandbu argues that the ECB should be enabled to issue time deposits to satisfy demand for riskless security. View Article |
The Autorité des marchés financiers unveils its priorities for 2019
During his New Year address to the press, AMF Chairman Robert Ophèle issued a wake-up call for greater European integration in the run-up to Brexit and the European elections, in order to ensure a strong and competitive Capital Markets Union. View Article |
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Insurance |
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Insurance Europe: Result of ECON vote on ESAs review largely positive, but concerns remain about proposed governance changes
Olav Jones, deputy director general of Insurance Europe, commented on the vote in the European Parliament’s Economics and Finance Committee (ECON) on its report on the review of the European supervisory authorities (ESAs). View Article |
EIOPA analyses costs and past performance of insurance and pension products
The EIOPA published its first Report on Costs and Past Performance of insurance and pension products following a request of the European Commission to the ESAs to periodically report on costs and past performance of retail investment, insurance and pension products. View Article |
Insurance Europe: EC ePrivacy proposal could limit consumers’ access to innovative insurance products
Insurance Europe is concerned that the European Commission’s proposal for an ePrivacy Regulation could hamper insurers’ ability to offer innovative insurance policies to consumers. This is because the scope of the proposal is unclear and creates legal uncertainty. View Article |
Commercial Risk Europe: New year insurance premium tax changes in EU countries
The new year has seen a number of tax changes affecting the insurance sector in EU countries, according to insurance premium tax specialists Impendulo. View Article |
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Asset Management |
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European Commission: Report on the operation of the alternative investment fund managers directive (AIFMD)
The European Commission released a report on the impact of the rules on alternative investment fund managers, which play an important role towards the Capital Markets Union's objective to increase opportunities for EU savers. View Article |
ESMA report finds investment product performance highly impacted by charges
The report covers Undertakings for Collective Investment in Transferable Securities (UCITS), Alternative Investment Funds sold to retail investors (retail AIFs) and Structured Retail Products (SRPs). View Article |
Financial Times: Fund groups gain reprieve from EU money market rules
Fund managers including BlackRock, Morgan Stanley Investment Management and State Street Global Advisors have been allowed to delay implementing EU rules after an eleventh-hour alteration to the regulation. View Article |
Investment & Pensions Europe: FCA warns on 'technology-led' asset management decisions
The Financial Conduct Authority (FCA) has identified “inappropriate technology-led asset management decisions” as one of five issues in the investment management sector that could undermine stability. Writing in its annual “Sector Views” publication, the regulator said such decisions could result in “harmful side effects”. View Article |
Investment & Pensions Europe: EU aims to boost investment in small cap, CEE with new indices
The European Commission is targeting the development of an equity index family covering all listed companies in the EU, flagging the possibility of the emergence of a “Capital Markets Union asset class”. View Article |
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Corporate Governance/Accounting |
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ECA: ECB must allow full scrutiny of banking supervision
The ECA has called on the EU’s legislators to intervene and ensure the ECB allows full access to documents for audits related to banking supervision. The ECA expresses that the ECB’s current position regarding access to documents and information prevents the ECA from carrying out its work properly. View Article |
ECA: Anti-fraud policy needs to be reformed to improve the fight against fraud affecting the EU budget
The EU must step up its fight against fraud and the EC should ensure leadership and reconsider the role and responsibilities of its anti-fraud office (OLAF), as the current fraud investigation system has inherent weaknesses, according to a new report from the ECA. View Article |
EFRAG requests comments on its draft endorsement advice on definition of a business
EFRAG has issued a draft endorsement advice letter and a separate invitation to comment relating to the endorsement for use in the EU of Definition of a Business (Amendments to IFRS 3). View Article |
FRC: Consultation on changes to Third Country Auditors (Fees) Instrument
The FRC launched a consultation to seek views on the proposed changes to the Third Country Auditors (Fees) Instrument. View Article |
ECB publishes single code of conduct for high-level officials
The code is the latest measure undertaken by the ECB to further strengthen and refine its good governance and integrity frameworks. The ethical rules take into account the ECB’s specificities as a central bank, a banking supervisor and an EU institution. View Article |
ACCA highlights international trade concerns among SMEs worldwide
A global survey of 1,240 private-sector businesses from ACCA has revealed that only 16 percent of SMEs worldwide are accessing advice on international trade, despite 31 percent citing uncertain global trade as their biggest barrier to growth over the next three years. View Article |
European Commission: Report on climate-related disclosures
The Technical Expert Group on Sustainable Finance has published its first report on companies' disclosure of climate-related information. View Article |
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Market Abuse |
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ESMA reports on accepted market practices under MAR
AMPs are a defence against allegations of market manipulation. In particular, dealings in financial markets which are carried out for legitimate reasons and in conformity with an established AMP will not constitute market manipulation. View Article |
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Anti-Money Laundering |
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ESAs announce multilateral agreement on the exchange of information between the ECB and AML/CFT competent authorities
The Agreement will create a clear framework for exchanging information between the ECB and CAs and potentially will enhance the effectiveness of their supervisory practices. View Article |
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Financial Services Policy |
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BIS: Regulation and supervision of financial cooperatives
Based on a survey of regulators and supervisors from both emerging market and advanced economies, the paper outlines these challenges in the new regulatory and technological context and assesses how FCs and the relevant authorities are responding. View Article |
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Grahams Articles, Comments & Speeches |
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78 days to Brexit: UK Parliament is the only British institution so far to have ‘taken back control’
An explosive year for Europe started with fireworks: the ECB appointed administrators to Italy’s Banca Carige, while the UK Parliament forced amendments to PM May’s Brexit plans that will restore its power over the process. An extension of Brexit date and allowing a People’s Vote seem more likely. View Article |
147th Brussels for Breakfast – CPD Notes
Organised by the Centre for the Study of Financial Innovation (CSFI), hosted by Chartered Institute of Securities and Investment (CISI) and with co-presenter Conor Foley (Norton Rose). View Article |
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Friends Services |
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78 days to Brexit: UK Parliament is the only British institution so far to have ‘taken back control’
An explosive year for Europe started with fireworks: the ECB appointed administrators to Italy’s Banca Carige, while the UK Parliament forced amendments to PM May’s Brexit plans that will restore its power over the process. An extension of Brexit date and allowing a People’s Vote seem more likely. View Article |
147th Brussels for Breakfast – CPD Notes
Organised by the Centre for the Study of Financial Innovation (CSFI), hosted by Chartered Institute of Securities and Investment (CISI) and with co-presenter Conor Foley (Norton Rose). View Article |
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Political |
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The Guardian: Matteo Salvini says Italy and Poland could build new Europe
Italy’s far-right interior minister, Matteo Salvini, has said that Italy and Poland could trigger a “European spring” that could break the dominant “Germany-France axis” as he strives to forge far-right alliances before the European parliamentary elections in May. View Article |
The Guardian: AfD party votes to campaign for German exit from EU
The German far-right party Alternative für Deutschland (AfD) has voted to campaign for the country’s exit from the European Union if its demand for reforms within the bloc are not met. View Article |
EurActiv: Five Star Movement unveils plan to form EU Parliament group
Promoting direct democracy and reducing overspending in politics are among the priorities that the Five Star Movement’s new political group in the EU Parliament will look to promote in a manifesto to be published in the run-up to the 2019 European elections. View Article |
Paul N. Goldschmidt: S.O.S. : Europe rudderless!
The author warns that all the conditions necessary to significantly weaken the weight of Europhile parties in the Strasburg Assembly seem to be coalescing, which could impair severely its work program and render more arduous appointing the new Commission, the President of the Council and of the ECB. View Article |
Bloomberg: French democracy not working well, 70% say in poll
Democracy in France isn’t working well for 70 percent of respondents in an annual Opinionway poll, up 9 percentage points from a year ago. View Article |
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Economic |
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Financial Times: Eurozone blip threatens to become a downturn
After a global expansion that started off in a staggered fashion, a bout of nerves is now gripping the major economies in an unhelpfully synchronised wave. The FT warns that evidence is building up of broad-based European economic weakness. View Article |
ECB President Mario Draghi: 20th anniversary of the euro
Mario Draghi, President of the European Central Bank, celebrates the first 20 years of the euro as a safeguard of the integrity of the Single Market and urges member states to accelerate completion of the EMU. View Article |
Bank of France's Villeroy de Galhau: Twenty years after the introduction of the euro, what are the economic prospects for Europe?
François Villeroy de Galhau, Governor of the Bank of France, outlines the three principles on which Europeans have built success of the euro - price stability, independence and general European interest, - which must guide us in addressing Europe's challenges in the face of 2019's uncertainties. View Article |
Vox EU: The ECB’s performance during the crisis: Lessons learned
Central bank interventions are effective if they clearly signal a commitment to reinvigorating the economy and if they address the source rather than the symptom of financial stress, authors argue. The ECB did not follow these principles, limiting its ability to improve financial market sentiment. View Article |
Vox EU: The mixed success of the Stability and Growth Pact
This column shows that the corrective arm of the SGP, which is procyclical by design, is an important driver of euro area fiscal policy. The preventive arm, which is designed to avoid the need for such procyclical policies, is much less effective - reform of the pact should focus on addressing this. View Article |
Euro area international trade in goods surplus €19.0 bn
The first estimate for euro area (EA19) exports of goods to the rest of the world in November 2018 was €203.0 billion, an increase of 1.9% compared with November 2017 (€199.2 bn). View Article |
EU28 current account surplus €38.7 bn
The EU28 seasonally adjusted current account of the balance of payments recorded a surplus of €38.7 billion (1.0% of GDP) in the third quarter of 2018, down from a surplus of €59.9 billion (1.5% of GDP) in the second quarter of 2018. View Article |
EFAMA comments on DAC6 - administrative cooperation in direct taxation
This letter outlines some transactions that EFAMA members, as an Industry, consider that should fall out of scope of the hallmarks introduced as Annex IV of DAC6. View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union