This week in "Brussels"
14 March 2019
Pablo Hernández de Cos appointed as BCBS Chairman, slight increase of high earners in EU banks, Presidency and Parliament reach provisional deal on clearing house rules, ESMA and FCA approach to MiFID II/MiFIR and BMR provisions under a no-deal Brexit, ESAs propose amendment to PRIIPs KID and more.
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Articles from 07 March 2019 - 14 March 2019 |
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Banking Union |
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BIS: Pablo Hernández de Cos appointed as Chairman of Basel Committee on Banking Supervision
The Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, has appointed Pablo Hernández de Cos, Governor of the Bank of Spain, as the new Chairman of the Basel Committee on Banking Supervision, effective immediately. View Article |
The EBA observes a slight increase of high earners in EU banks for 2017
The EBA published its report on high earners for 2017. The data shows that the number of high earners in EU banks receiving a remuneration of more than EUR 1 million slightly increased from 4 597 in 2016 to 4 859 in 2017. View Article |
ECB's Lautenschläger: The evolution of banking regulation
Sabine Lautenschläger, Member of the Executive Board of the ECB, speaks about the crucial challenges Basel III poses - getting the balance right between risk sensitivity and simplicity. View Article |
Bank of England: Pillar 2 capital: Updates to the framework
In this consultation paper, the Prudential Regulation Authority proposes to update the Pillar 2 capital framework to reflect continued refinements and developments in setting the PRA buffer (also referred to as Pillar 2B). View Article |
EBA publishes clarifications to the first set of issues raised by its Working Group on APIs under PSD2
The European Banking Authority published clarifications to the first set of issues that had been raised and discussed by participants of its Working Group on APIs under PSD2, which met for the first time on 21 February 2019. View Article |
European Payments Council's decision paper on Brexit and UK PSPs’ participation in SEPA schemes
In consideration of the expected withdrawal of the UK from the EU the UK payment service providers (PSPs), represented through ‘UK Finance’, filed an application with the EPC to be able to maintain the participation of the UK in the EPC’s SEPA schemes in the event of a no-deal Brexit. View Article |
BCBS: Statement on crypto-assets
While the crypto-asset market remains small relative to that of the global financial system, and banks currently have very limited direct exposures, the Committee is of the view that the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential to raise financial stability concerns and increase risks faced by banks. View Article |
FCA reveals findings from first cryptoassets consumer research
The Financial Conduct Authority (FCA) has published two pieces of research looking at UK consumer attitudes to cryptoassets, such as Bitcoin or Ether. The research includes qualitative interviews with UK consumers and a national survey. View Article |
ECB changes the acronym for its euro short-term rate
“ESTER” acronym to be replaced with “€STR” with immediate effect. View Article |
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Capital Markets Union |
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Capital markets union: Presidency and Parliament reach provisional deal on clearing house rules
The Presidency and the Parliament reached today a provisional agreement on how EU and third country clearing houses should be supervised in the future, taking into particular account the effects of Brexit on the European financial system. View Article |
ESMA sets out its approach to several MiFID II/MiFIR and BMR provisions under a no-deal Brexit
ESMA published a statement on its approach to the application of some key MiFID II/MiFIR and Benchmark (BMR) provisions should the United Kingdom leave the European Union under a no-deal Brexit. View Article |
FCA statement on various MiFID obligations and benchmarks regulation if the UK leaves the EU without an implementation period
The opinions are relevant for a no-deal scenario and may change depending on the final timing and nature of Brexit. 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 (MiFID II). View Article |
European Commission and US CFTC joint statement on EMIR 2.2
European Commission Vice-President Valdis Dombrovskis and U.S. CFTC Chairman J. Christopher Giancarlo issued a statement on cross-border derivatives regulation on the occasion of a political agreement between European Union co-legislators on EMIR 2.2 legislation. View Article |
ISDA response to BCBS/IOSCO statement on non-cleared margin requirements
ISDA expressed joy that regulators have recognized the challenges posed by the phase-five implementation of initial margin requirements. View Article |
ESMA publishes responses to its consultation on Guidelines on standardised procedures and messaging protocols
ESMA published the responses received to its consultation on Guidelines on standardised procedures and messaging protocols used between investment firms and their professional clients under Article 6(2) of CSDR. View Article |
ESMA publishes responses to its Consultation on Guidelines on settlement fails
ESMA published the responses received to its Consultation on Guidelines on settlement fails reporting under Article 7(1) of CSDR. View Article |
Remarks by Vice-President Valdis Dombrovskis at the ECOFIN press conference
Mr Dombrovskis said Europeans need a taxonomy to offer trustworthy green financial products to institutional and retail investors alike, and the demand for that kind of products is growing very rapidly. View Article |
Capital Markets Union: Commission welcomes agreement on sustainable investment disclosure rules
The Commission welcomes the political agreement reached by the European Parliament and EU Member States today on new rules on disclosure requirements related to sustainable investments and sustainability risks. View Article |
EIOPA: Board of Appeal publishes its decision in the Nordic banks’ appeals
The Board of Appeal publishes its decision in the Nordic banks’ appeals from the decisions of the Board of Supervisors of ESMA in the “shadow ratings” cases. View Article |
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Clients Union |
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ESAs propose amendment to PRIIPs Key Information Document to clarify application to investment funds
The European Supervisory Authorities submitted a letter to the European Commission on the draft regulatory technical standards to amend the Delegated Regulation covering the rules for the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products. View Article |
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Insurance |
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Capital Markets Union: Making it easier for insurers to invest in the real economy
The European Commission adopted today new rules to help insurers to invest in equity and private debt and to provide long-term capital financing. View Article |
Invest Europe: European Commission reduces capital charges for insurers to invest in long-term assets
New treatment of long-term equity investments under EU rules for insurers are a step towards releasing €10 trillion of capital to support European SMEs via private equity funds, says Invest Europe. View Article |
Insurance Europe: Disappointing EC proposals are a missed opportunity to improve Solvency II
Olav Jones, deputy director general of Insurance Europe, comments the adoption of the European Commission’s final delegated acts amending the Solvency II delegated regulation. View Article |
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Asset Management |
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ESMA report values EU Alternative Investment Funds at €4.9 trillion
The ESMA published its first statistical report on European Union Alternative Investment Funds. The study finds that the EU AIF sector in 2017, as measured by Net Asset Value (NAV), amounted to €4.9tn or nearly one third of the total EU fund industry. View Article |
EFAMA calls for legal certainty and a compatible approach between the provisions of the new regime for investment firms
EFAMA welcomes the intention of the EU policy makers to conclude as soon as possible the trilogue negotiations concerning the new prudential regime for investment firms (IFD/IFR). View Article |
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Corporate Governance/Accounting |
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IASB/Hoogervorst: The Primary Financial Statements project—a game changer in financial reporting?
Mr Hoogervorst described the global nature of IFRS Standards, the recently issued major Standards and the IASB's work on improving the formatting and structure in IFRS financial statements through its Primary Financial Statements project. View Article |
Deloitte comments on six IFRS Interpretations Committee tentative agenda decisions
Deloitte has published its comment letters on IFRS Interpretations Committee tentative agenda decisions related to IAS 23, IAS 38, IFRS 9, and IFRS 11, as published in the November 2018 IFRIC Update. View Article |
IIA: New report weighs internal audit responsibilities
The Internal Audit Foundation announced the release of a new research report, Striking an Optimal Balance Between Assurance and Consulting Services – Practical Insights from Internal Audit Leaders, based on the Foundation’s comprehensive Common Body of Knowledge study. View Article |
ECGI: Why do auditors fail? What might work? What won't?
The paper written by John Coffee analyses the reasons of accounting scandals that have sprung up everywhere over the last two years. This article’s premise is that diversified institutional investors still care about auditing, but lack relevant information about the auditor’s relative performance. View Article |
ECGI: The data standardization challenge
Authors explain the divergence between optimal and actual policy with respect to data standardization and the lessons it holds for financial regulation more generally. They identify myriad frictions favouring the status quo. View Article |
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Anti-Money Laundering |
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Money laundering and terrorist financing: Council returns draft list of high risk countries to the Commission
The Council unanimously decided to reject a draft list put forward by the Commission of 23 "high-risk third countries" in the area of money laundering and terrorist financing. View Article |
The Economist: More banks are caught up in money-laundering scandals
The money-laundering scandal that struck Danske Bank last year was staggering. The Danish lender’s Estonian branch is suspected of handling up to $230bn of iffy funds from former Soviet states. Aftershocks are rumbling under other European banks. View Article |
House of Commons: UK’s fragmented anti-money laundering system needs re-ordering, warns Treasury Committee
The Treasury Committee has today published a unanimously-agreed Report on Economic Crime – Anti-money laundering supervision and sanctions implementation. View Article |
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Grahams Articles, Comments & Speeches |
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149th 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-presenters Denis McShane (Avisa Partners) and Andrew Henderson (Eversheds Sutherland). View Article |
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Friends Services |
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149th 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-presenters Denis McShane (Avisa Partners) and Andrew Henderson (Eversheds Sutherland). View Article |
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Political |
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POLITICO: Germany’s CDU chief sets out European vision, responds to Macron
Annegret Kramp-Karrenbauer, the leader of Germany’s Christian Democrats, issued a response to French President Emmanuel Macron's calls for a stronger Europe, taking issue with key points of his vision and setting out her party's agenda for European reform. View Article |
POLITICO: Macron seeks support across Europe for election campaign
Emmanuel Macron's party launched a campaign to win support across the Continent ahead of May's European Parliament election — even though it's only running in France. View Article |
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Economic |
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The Economist: Spooked by slowdown, the ECB rolls out stimulus
The ECB pledged to keep interest rates on hold for longer—“at least through the end of 2019”—having previously said it would keep rates at rock-bottom until the summer. And it announced a third round of “targeted longer-term refinancing operations” (TLTRO-III), which will make cheap loans to banks. View Article |
Financial Times: The European Central Bank is attempting to get ahead of events
The ECB’s U-turn this week — reviving part of its stimulus programme after two years of weaning the eurozone off easy money — took markets by surprise. But signs of eurozone weakening, especially in Germany, and in key partners such as China, had been evident for months, the FT points out. View Article |
Financial Times: Eurozone banks buy sovereign bonds, reviving ‘doom loop’ fear
Banks across the eurozone have begun to stock up on their own governments’ bonds for the first time since the bloc’s debt crisis half a decade ago — even as the European Central Bank launches a fresh round of stimulus to prod them into lending. View Article |
Foreign direct investment report: continuous rise of foreign ownership of European companies in key sectors
The Commission report confirms a continuous rise in foreign company ownership in key sectors in the EU and an increase in investments from emerging economies, such as China. It illustrates the need for effective implementation of the freshly adopted EU investment screening framework. View Article |
Denis Beau: Monetary and financial challenges for the Euro area - what are our options?
The First Deputy Governor of the Bank of France emphasised the two "burning obligations" that fall on financial intermediaries and regulators and the financial sector: a strong vigilance and promoting a deeper financial integration of the euro area. View Article |
Fondation Robert Schuman: For a geopolitics of the euro
Promoting the internationalisation of the euro would also strengthen the influence and security of Europe. In virtue of this it must be a diplomatic goal of the institutions and the Member States, write Cyprien Batut and Olivier Lenoir. View Article |
Main results - Eurogroup
The Eurogroup discussed progress Greece made with reforms. Ministers also held a thematic discussion on housing markets and, in inclusive format, looked at features of the budgetary instrument for convergence and competitiveness for the eurozone. View Article |
Chatham House: US–EU trade relations in the Trump era: which way forward?
This paper recommends a framework for strengthening US–EU trade relations and achieving successful trade talks in the current era of protectionism. View Article |
GDP up by 0.2% and employment up by 0.3% in the euro area
In the EU28, GDP was up by 0.3% and employment by 0.2%. View Article |
Taxation: Council revises its EU list of non-cooperative jurisdictions
The Council adopted a revised EU list of non-cooperative jurisdictions for tax purposes. View Article |
Insurance Europe: Insurers warn OECD tax proposals for digital business could result in significant legal uncertainty
While welcoming the Organisation for Economic Co-operation and Development’s (OECD) efforts to address taxation challenges that result from digitalisation, Insurance Europe believes that any adaptations should focus on aggressive base erosion and profit shifting (BEPS), rather than on challenging the existing international tax system. View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union