This week in "Brussels"
21 March 2019
Basel III monitoring results, impact of the final Basel III reforms on EU banks capital, PRA and FCA agree MoU with EBA, ECB announces start date for €STR, Commission reports on progress achieved on CMU, agreement on more robust supervision of CCPs, ESMA preparations in case of no-deal Brexit.
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Articles from 14 March 2019 - 21 March 2019 |
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Banking Union |
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Basel III monitoring results published by the Basel Committee
Changes in minimum required capital from fully phased-in final Basel III remain stable for large internationally active banks compared with end-2017. All banks continue to meet initial Basel III minimum and target CET1 capital requirements. All banks in the sample reported Liquidity Coverage Ratios (LCRs) that met or exceeded the final 100% minimum requirement. View Article |
EBA publishes updated impact of the final Basel III reforms on EU banks capital and updates on the compliance with liquidity measures in EU
The European Banking Authority (EBA) published two reports, which measure the impact of implementing the final Basel III reforms and monitor the current implementation of liquidity measures in the EU. View Article |
PRA and FCA agree Memorandum of Understanding (MoU) with EBA
The PRA, FCA and European Banking Authority have agreed a template Memorandum of Understanding (MoU). The template sets out the expectations for supervisory cooperation and information-sharing arrangements between UK and EU/EEA national authorities. View Article |
ECB announces start date for euro short-term rate (€STR)
The first €STR will be published on 2 October 2019. The ECB will provide one-off computation of spread between €STR and EONIA. View Article |
Working group on € risk-free rates recommends transition path from EONIA to €STR and €STR-based forward-looking term structure methodology
Private sector working group recommends modifying EONIA methodology to become €STR plus a fixed spread until end-2021 to facilitate transition from EONIA to €STR. View Article |
EBA notes good progress in convergence of supervisory practices across the EU
The EBA published its annual Report on the convergence of supervisory practices in the EU. The EBA's work in supervisory convergence aims at fostering comparable supervisory approaches across the single market. This is necessary to ensure a level playing field, effective supervision of cross border groups, and to promote supervisory best practices. View Article |
BIS: Survey on the interaction of regulatory instruments: results and analysis
This report summarises and analyses the results of the third-wave survey conducted by the Research Task Force on the role of multiple regulatory constraints in the Basel III framework. View Article |
BIS: Proportionality in bank regulation and supervision - a survey on current practices
The report summarises the responses received to the survey by Basel Committee member jurisdictions and those of the Basel Consultative Group. View Article |
EBA updates list of Other Systemically Important Institutions (O-SIIs)
The EBA updated the 2018 list of Other Systemically Important Institutions (O-SIIs) in the EU. O-SIIs - those institutions which, along with Global Systemically Important Institutions (G-SIIs), are deemed systemically important - have been identified by the relevant authorities across the Union according to harmonised criteria provided by the EBA Guidelines. View Article |
Bloomberg: Dimon says European banks need cross-border mergers to compete
European banks need to look beyond their home countries for mergers in order to tap the region’s full economic power and become more competitive, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said. View Article |
Financial Times: France tells banks to set aside more capital
France has told its banks to put aside more capital as it fears credit in the country might be growing too quickly and the financial system needs to hold more ammunition in the face of growing risks. View Article |
EBA launches call for papers for its 2019 Policy Research Workshop
The EBA launched a call for research papers in view of its 2019 Policy Research Workshop taking place on 27-28 November 2019 in Paris on the topic "The future of stress tests in the banking sector – approaches, governance and methodologies". View Article |
EBA goes live with its central register of payment and electronic money institutions under PSD2
The EBA launched its central electronic register under the Payments Services Directive (PSD2). The register will provide information on several thousand payment and electronic money institutions and 150,000 agents within the EU. Its objective is to increase transparency and ensure a high level of consumer protection within the European Single Market. View Article |
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Capital Markets Union |
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Capital Markets Union: Commission reports on progress achieved ahead of European Council
The Commission took stock of the progress achieved in building a Single Market for capital, including as regards sustainable finance, and calls on EU leaders to keep up the political engagement to lay down the foundation of the Capital Markets Union. View Article |
Capital Markets Union: agreement on more robust supervision of central counterparties
The Commission welcomes the political agreement reached by the European Parliament and EU Member States to ensure a more robust and effective supervision of CCPs offering services to the EU. View Article |
Capital Markets Union: Council confirms final agreement on easier access to financial markets for SMEs
As part of the capital markets union, the EU will soon have in place a new framework to help small and medium businesses access new sources of funding. View Article |
IOSCO: Jurisdictions move forward towards implementing standards for payment, clearing and settlement
Jurisdictions are making progress on implementing international standards for payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories. View Article |
FSB letter to ISDA about derivative contract robustness to risks of interest rate benchmark discontinuation
This letter from the Co-chairs of the FSB’s Official Sector Steering Group (OSSG) encourages the International Swaps and Derivatives Association (ISDA) to continue its work on derivatives contractual robustness to risks of interest rate determination. View Article |
ISDA, SIFMA, ABA, BPI and FIA comment on proposed standardized approach for calculating exposure amount of derivatives
The Associations have raised a number of these concerns in connection with the Basel Committee standards for SA-CCR and in response to implementation of SA-CCR outside the United States. View Article |
ISDA - CCP Recovery and resolution: Incentives Analysis
This analysis covers the positions of ISDA members on the buy-side and sell-side. The paper does not reflect the views of many CCPs, and many of the CCPs are in disagreement with the views expressed herein. View Article |
ESMA clarifies endorsement of UK credit ratings in case of a no-deal Brexit
ESMA issued a statement which sets out the implications for CRAsbased in the United Kingdom, including the endorsement of UK credit ratings, should the UK withdraw from the European Union without a withdrawal agreement (no-deal Brexit). View Article |
FCA: Endorsement of credit ratings from the European Union into the United Kingdom for regulatory use in the event of a no-deal Brexit
FCA assessed the EU regulatory and supervisory regime to be ‘as stringent as’ the UK’s regime for the purposes of allowing UK-registered CRAs to endorse credit ratings into the UK from affiliated EU CRAs for regulatory use under the Credit Rating Agencies Regulation. View Article |
ESMA’s application of the trading obligation for shares following a no-deal Brexit
ESMA issued this statement in response to requests from many market participants for additional clarity and certainty on the application of the trading obligation for shares in the absence of an equivalence decision by the European Commission. View Article |
ESMA publishes its Data Operational Plan under a no-deal Brexit scenario
ESMA published a statement in relation to the impact on ESMA’s databases and IT systems of a no-deal Brexit scenario on 29 March 2019. View Article |
ESMA includes MiFID II/ MiFIR in its interactive single rulebook
ESMA updated its Interactive Single Rulebook, an online tool allowing a comprehensive overview of and an easy access to all level 2 and level 3 measures adopted in relation to a given level 1 text. View Article |
MiFID II: ESMA publishes results of the annual transparency calculations of LIS and SSTI thresholds for bonds
ESMA made available the results of the annual transparency calculations of the large in scale (LIS) and size specific to the instruments (SSTI) thresholds for bonds. View Article |
IPE - MiFID II: The best is yet to come
By placing stronger requirements on best execution, MiFID II is transforming the execution landscape, writes Carlo Svaluto. View Article |
Joint Trade Association Response to German Ministry of Finance on MIFID II/MIFIR Consultation
The implementation of MiFID II/ MiFIR has been one of the most ambitious implementation exercises carried out by the industry in the past few years due to MiFID II/R overhauling existing regimes and addressing all investment services in all asset classes. View Article |
PCS is authorised as a third party verification agent
PCS was authorised as a third party verification agent by the UK Financial Conduct Authority. View Article |
ESMA registers Beyond Ratings SAS as credit rating agency
Beyond Ratings SAS is based in Paris, France, and intends to issue sovereign and public finance ratings. The registration takes effect from 18 March 2019. View Article |
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Insurance |
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EIOPA requests insurance undertakings to provide information in the context of its 4th long-term guarantees report and the 2020 Solvency II
The European Insurance and Occupational Pensions Authority announced the request addressed to insurance undertakings of the European Economic Area and subject to Solvency II to provide specific information. View Article |
Insurance Europe: Solvency II should embed sustainability in a risk-based and proportionate manner
Insurance Europe has responded to a call for evidence by the European Insurance and Occupational Pensions Authority on sustainability in Pillar I of Solvency II. View Article |
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Asset Management |
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Investment & Pensions Europe: Pensions: Regulation around Europe
This article summarizes key regulatory issues in selective European countries – Denmark, Germany, The Netherlands, Sweden, Switzerland and UK. View Article |
Investment & Pensions Europe: Moody's: EU disclosure rules could benefit asset manager ESG leaders
Asset managers that have already established sustainable investment products and reporting could benefit from new EU disclosure rules, according to Moody’s. View Article |
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Corporate Governance/Accounting |
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ACCA, Deloitte: Closing the 'accounting for intangibles' gap
A joint report from ACCA and Deloitte shows there are increasing concerns that financial statements no longer reflect the underpinning drivers of value in modern business – especially when it comes to accounting for intangibles, such as research and development (R&D) costs. View Article |
Better protection of whistle-blowers: Council confirms agreement with Parliament
EU member states ambassadors confirmed the agreement reached by the Romanian presidency and Parliament negotiators on the directive on the protection of whistle-blowers. View Article |
ICGN: Taking the long view on corporate governance
George Dallas, Policy Director at ICGN, discusses the broad sweeping developments in corporate governance and the topics that will dominate in 2019. View Article |
ACCA focuses on the ‘big themes’ affecting the accountancy profession
Ahead of its new strategic year, ACCA announces today a programme that examines the themes and issues that impact the accountancy profession around the world, now and in the future. View Article |
IASB: Agenda decisions—time is of the essence
Sue Lloyd, Vice-Chair of the IASB and Chair of the IFRS Interpretations Committee, explains the IASB's position on agenda decisions. View Article |
Accountancy Europe: Response on proposed international standard on related services 4400 (revised)
Accountancy Europe has responded to the IAASB’s ED on proposed international standard on related services 4400 (revised), agreed-upon procedures engagements. View Article |
ECGI: Activism pressure and the market for corporate assets
Ulrich Hege and Yifei Zhang investigate the impact of hedge fund activism on corporate transaction markets. Their paper is the first to consider the impact of activism threats (rather than actual campaigns) on corporate acquisitions and sales. View Article |
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Financial Services Policy |
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IPE: Brussels: Going out with a regulatory bang
Several packages related to financial services look set to be concluded before the end of this EU mandate period. View Article |
RegTech and SupTech – change for markets and regulators
ESMA carried out an analysis of the regulatory and supervisory technologies currently being developed in response to various demand and supply drivers. View Article |
EBF: European banks support EU priorities in sustainable finance
Ahead of the European Commission’s high level conference on a global approach to sustainable finance, in Brussels, the European Banking Federation wishes to underline its full support for the EU-level actions and initiatives in this field. View Article |
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Political |
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Alberto Alemanno: The Birth of Political Europe
The EU lacks a European party system capable of fostering a genuine transnational space of political debate and dialogue where citizens can understand, influence and participate in decision-making affecting their common interests as Europeans. Yet its absence is becoming critically visible. View Article |
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Economic |
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OMFIF: Next financial crisis may eclipse 2008
It is difficult to forecast when the next global economic recession will happen. It is much easier to predict its severity. View Article |
Bruegel: New EU industrial policy can only succeed with focus on completion of single market and public procurement
Europe does need an industrial policy to ensure that EU companies remain highly competitive globally, notwithstanding strong competition from China and other big players. However, the Franco-German manifesto's priorities are unsuitable for the pursuit of this goal. View Article |
Bruegel: The European Union’s response to the trade crisis
In this Policy Contribution, the authors examine the root causes of the current problems, develop good and bad scenarios for what could happen next, and provide recommendations for how the EU should respond. View Article |
Financial Times: Europe must learn to love fiscal stimulus
Most countries can support economic growth without jeopardising debt sustainability, argues Reza Moghadam. View Article |
EurActiv: EU’s ‘Tobin tax’ now expected to collect only €3.5 billion
The latest proposal for an EU financial transaction tax (FTT) received lukewarm support earlier this week, with expected revenues brought down tenfold, to €3.45 billion annually, under a watered-down version tabled by France and Germany, according to documents seen by EURACTIV. View Article |
Annual inflation up to 1.5% in the euro area
The euro area annual inflation rate was 1.5% in February 2019, up from 1.4% in January 2019. A year earlier, the rate was 1.1%. European Union annual inflation was 1.6% in February 2019, up from 1.5% in January 2019. View Article |
Euro area international trade in goods surplus €1.5 bn
The first estimate for euro area (EA19) exports of goods to the rest of the world in January 2019 was €183.4 billion, an increase of 2.5% compared with January 2018 (€179.0 bn) View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union