This week in "Brussels"
16 May 2019
Banking Union, Capital markets union, euro risk-free rates, banks call for improving Europe’s economic competitiveness, EMIR REFIT, ESMA says market risk remains high but stable, MiFID II, bank secrecy rules after Danske laundering shock, Sibiu summit Declaration, China-US trade dispute and more.
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Articles from 09 May 2019 - 16 May 2019 |
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Banking Union |
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European Council: Banking Union: Council adopts measures to reduce risk in the banking system
The Council adopted a comprehensive legislative package which will reduce risks in the banking sector and further reinforce banks' ability to withstand potential shocks. View Article |
Financial Times: Regulators cut banks some slack on Libor shift
Global markets regulators are beginning to consider concessions to help banks struggling to shift away from the Libor lending benchmark. View Article |
ECB: Working group on euro risk-free rates seeks feedback on EONIA to €STR legal action plan
The working group on euro risk-free rates has launched a public consultation on its draft recommendations to address the legal implications for new and legacy contracts referencing the euro overnight index average (EONIA) as a result of the proposed transition from EONIA to the euro short-term rate (€STR). View Article |
Better Finance: Bail-in of retail investors and depositors should be measure of last resort
Better Finance supports Commissioner Vestager in her decision to allow targeted compensation by the Italian government for individual investors and savers who were defrauded through the sale of risky financial investments. View Article |
EBF: Banks call for improving Europe’s global economic competitiveness in upcoming EU policy cycle
European banks, represented by the Board of the European Banking Federation, urged the European Union to step up its efforts for improving Europe’s global competitiveness as part of the agenda of the next European Commission. Specifically, the EBF Board called on governments in Europe to recognize the key economic role of banks in funding growth and supporting prosperity. View Article |
EBF: Jean Pierre Mustier elected as next EBF President
The Board of the European Banking Federation elected Jean Pierre Mustier, Group Chief Executive Officer of UniCredit SpA, as the next President of the European Banking Federation. The appointment is for a two-year term from 1 July 2019. View Article |
BIS: How does the interaction of macroprudential and monetary policies affect cross-border bank lending?
Authors combine a rarely accessed BIS database on bilateral cross-border lending flows with cross-country data on macroprudential regulations. They study the interaction between the monetary policy of major international currency issuers (USD, EUR and JPY) and macroprudential policies enacted in source (home) lending banking systems. View Article |
Bloomberg: Banks waking up to Fintech threat throw billions into digital
Scrappy online financial startups have spent the past few years building buzz, backing and the beginnings of a customer base. For a while, the world’s banking giants largely ignored them. Now they’re starting to feel the heat—and fighting back with the most formidable weapon in their arsenals: cash. View Article |
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Capital Markets Union |
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Capital markets union: Council adopts updated rules for financial derivative products and clearing
The EU will soon have in place simplified rules for non-financial counterparties, small financial counterparties and pension funds using financial derivative products. View Article |
ISDA Explanatory Note on Application of EMIR REFIT to Alternative Investment Funds
ISDA has prepared an explanatory note to provide a high-level, factual overview of the effect of these changes, including the extent to which these changes might impact upon non-EU based alternative investment funds. View Article |
ESMA says market risk remains high but stable
ESMA published its latest risk dashboard for the European Union’s securities markets, covering the first quarter of 2019. It finds that the risk landscape in Q1 2019 remains largely unchanged compared to the fourth quarter of 2018. View Article |
MiFID II: ESMA publishes data for the systematic internaliser calculations for equity, equity-like instruments and bonds
ESMA published an update of systematic internaliser (SI) regime data. The updated publication covers equity, equity-like instruments and bonds. View Article |
SEC proposes actions to improve cross-border application of security-based swap requirements
The proposals are intended to improve the regulatory framework by addressing implementation issues and efficiency concerns, and further harmonizing the regulatory regime governing security-based swaps administered by the Commission with the regulatory regime governing swaps administered CFTC. View Article |
AFME response to FCA CP 19/6: Changes to align the FCA Handbook with the EU Prospectus Regulation
AFME’s concern arises out of a timing mismatch between two provisions of the Prospectus Regulation. Article 21(5) requires publication when the prospectus has been approved. View Article |
ESMA issues two positive opinions on national product intervention measures
ESMA’s opinion finds that the proposed measures are justified and proportionate and that it is necessary for NCAs of other Member States to take product intervention measures that are at least as stringent as ESMA’s measures. View Article |
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Clients Union |
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Accountancy Europe: GDPR one year on - its impact on auditors and accountants?
It’s been one year since the EU’s GDPR required all organisations processing data to review and adapt their documents and procedures. What the GDPR means in practice has been the topic of intense debate. Accountancy Europe aims to clarify what the GDPR means for auditors and accountants. View Article |
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Insurance |
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Commercial Risk Europe: Ferma publishes key lobbying priorities for next European parliament
Ferma has published a manifesto listing its four risk management and insurance lobbying priorities with EU policymakers and institutions in the next parliament, which follows elections later this month. The areas of focus are digital transformation, transition to a sustainable economy, risk management education and ensuring a stable insurance market. View Article |
GFIA: G20 focus on ageing society key to ensuring people’s dignity in retirement
GFIA strongly supports the Japanese Group of 20 (G20) Presidency’s focus on the ageing society, which reflects the importance of finding ways to ensure that people can live a decent and healthy life throughout their retirement. View Article |
Insurance Europe: EIOPA report on insurers’ use of big data analytics welcomed
William Vidonja, head of conduct of business at Insurance Europe, responded to a report by the European Insurance and Occupational Pensions Authority (EIOPA) on the use of big data analytics in motor and health insurance. View Article |
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Asset Management |
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Better Finance: Fund managers frequently pocket large portions of the revenues of securities lending
Better Finance urges National Competent Authorities and ESMA to investigate how operational costs incurred by securities lending can vary so dramatically - from 5% to 49% of revenues - from one fund manager to the other. View Article |
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Corporate Governance/Accounting |
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EFRAG's draft comment letter on the IASB's ED/2019/1 Interest Rate Benchmark Reform
EFRAG has published its draft comment letter in response to the IASB's Exposure Draft ED/2019/1 Interest Rate Benchmark Reform (proposed amendments to IFRS 9 and IAS 39) and seeks constituents' views on the proposals. View Article |
EFRAG's Discussion Paper – Accounting for Pension Plans with an Asset-Return Promise
The Discussion Paper published by EFRAG explores alternative accounting treatments for post-retirement employee benefits, promising the higher of the return on an identified item or group of items and a minimum guaranteed return. View Article |
ACCA's research reveals 55% of public worldwide believe auditors ‘could prevent company failures’
A survey of 11,000 people in 11 countries around the world by ACCA has revealed their expectation that auditors should evolve to prevent company failures. More than half of those questioned also believe auditors are responsible for avoiding company failures. View Article |
ECGI: Accounting for financial stability - lessons from the financial crisis and future challenges
Authors argue that lack of disclosure and delayed loss recognition seem to have been bigger problems than the converse. Moreover, bank regulation intended to improve financial stability appears to have had unintended consequences through its interactions with bank accounting. View Article |
ACCA: No ‘quick fix’ available for effective risk management in organisations
A new report from ACCA uncovers how board-level risk management activities vary in organisations as a result of internal and external factors. The report, Risk and performance: Embedding risk management, highlights common challenges and good practices to overcome risk management difficulties. View Article |
Financial Times: German governance must be fit for purpose
Recent scandals at some German flagships have exposed shortcomings in the corporate model. The issues will require longer-term moves to increase venture capital and private equity-type funding, and ensure the education system produces the appropriate skills. View Article |
IFAC: IESBA staff release updated FAQs on long association
The Staff of the IESBA has released an updated Q&A publication to support the adoption and implementation of the revised long association provisions Changes to the Code Addressing Long Association of Personnel with an Audit or Assurance Client. View Article |
FRC: Guide to help smaller listed companies improve financial reporting
A new guide to help smaller listed and AIM quoted companies improve their financial reporting has been published by the FRC and ICAEW. The guide addresses issues about the quality of financial reporting in this sector, and provides practical tips and questions for audit committees to consider. View Article |
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Financial Services Policy |
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Bloomberg: Bank secrecy rules get a rethink after Danske laundering shock
Danske Bank A/S is turning into a case study for European regulators, legislators and bankers to rethink fundamental assumptions about how the finance industry should operate. View Article |
ECB: Benoît Cœuré: Cyber resilience as a global public good
Speech by Benoît Cœuré, Member of the Executive Board of the European Central Bank, in which he focuses on cyber resilience for financial market infrastructures. View Article |
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Grahams Articles, Comments & Speeches |
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The [EU] times they are a changin’…
It is a time for some introspection about what has been achieved in the last five-year political cycle but – more importantly, where might the EU27 journey in the next five years (though it may yet be EU28 making the journey.) View Article |
151th 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 Rachel Kent )Hogan Lovells) and Peter Snowdon (Norton Rose Fulbright). View Article |
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Friends Services |
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151th 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 Rachel Kent )Hogan Lovells) and Peter Snowdon (Norton Rose Fulbright). View Article |
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Political |
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The Sibiu Declaration
EU leaders gathered in Sibiu and pledged to "stay united, through thick and thin," to "defend one Europe." European Council President Donald Tusk convened a meeting of all 28 EU leaders on 28th May in order to start the nomination process for the election of new heads of EU institutions. View Article |
Financial Times: EU leaders on collision course over choosing successor to Juncker
European leaders are starkly split over the “lead candidate” process for choosing the next president of the European Commission and face stormy negotiations on top jobs after this month’s EU elections. View Article |
Project Syndicate: More or Less Europe?
The upcoming elections will entrench the growing divide between those who want less Europe and those who want more. And the fragmented parliament that is likely to emerge will cast further uncertainty on the European Union’s future direction. View Article |
Financial Times: Emmanuel Macron struggles to contain far-right in EU election race
New polling for the upcoming European elections show that the French president’s party faces risk of losing to Marine Le Pen’s Rassemblement National. View Article |
CEPS: Representative Democracy in the EU: Recovering Legitimacy
This volume investigates the relationship between the democratic institutions of the member states and those of the EU. View Article |
Fondation Robert Schuman: Between China and the USA, Europe seeks its future
The clash between the US and China has become the central point of tension in international relations, with a different intensity from that of the Cold War, given its nature, which is both economic and military. It is here that new, world geopolitical balances are slowly falling into place. View Article |
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Economic |
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Bruegel: Implications of the escalating China-US trade dispute
If allowed to escalate, the trade dispute between China and the United States will significantly increase the likelihood of a global protectionist surge and a collapse in the rules-based international trading system. View Article |
VoxEU: The global economy hit by higher uncertainty
The latest IMF projections, which show a drop of 0.3% in the global economy partly due to rising uncertainty, are in line with the latest reading of the World Uncertainty Index, which shows a sharp increase in the first quarter of 2019 that could knock up to 0.5% of global growth this year. View Article |
ECB amends monetary policy implementation guidelines
The new guidelines amend the Guideline on the implementation of the Eurosystem monetary policy framework, the Guideline on the valuation haircuts applied in the implementation of the Eurosystem monetary policy framework and the Guideline on additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral. View Article |
GDP up by 0.4% and employment up by 0.3% in the euro area
Seasonally adjusted GDP rose by 0.4% in the euro area (EA19) and by 0.5% in the EU28 during the first quarter of 2019, compared with the previous quarter, according to a flash estimate published by Eurostat. View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union