This week in "Brussels"
27 June 2019
Euro area banks' profitability challenge, 2020 EU-wide stress test methodology issued for discussion, European capital markets, CMU, short-termism in financial markets, G20 Summit in Japan, future of the investment management industry, European Council conclusions, EMU and more.
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Articles from 20 June 2019 - 27 June 2019 |
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Banking Union |
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ECB's De Guindos: Euro area banks: the profitability challenge
Luis de Guindos, Vice-President of the ECB, points out that euro area banks' profitability remains weak and explains why is low profitability a concern from a financial stability perspective. De Guindos also mentioned possible ways for banks to return to sustainable profitability. View Article |
EBA issues 2020 EU-wide stress test methodology for discussion
The 2020 exercise will assess EU banks' resilience to an adverse economic shock and inform the 2020 Supervisory Review and Evaluation Process (SREP). The methodology covers all risk areas and builds on the methodology prepared for the 2018 exercise, while improving some aspects based on the lessons learnt. View Article |
EBA consults on draft Guidelines on loan origination and monitoring
Learning from the elevated levels of non-performing exposures (NPEs) across the EU in recent years, the draft guidelines aim to ensure that institutions have robust and prudent standards for credit risk taking, management and monitoring, and that newly originated loans are of high credit quality. View Article |
BIS: Literature review on the costs and benefits of bank capital published by the Basel Committee
As part of its work programme for evaluating the impact of its post-crisis reforms, the Basel Committee on Banking Supervision published a working paper reviewing the literature on the costs and benefits of bank capital. View Article |
Overview of Pillar 2 supervisory review practices and approaches published by the Basel Committee
The report describes the key concepts of Pillar 2 and the different practices in use across Basel Committee member jurisdictions. View Article |
Bank of England's Saporta: Bank regulation: on the benefits of flexibility
Victoria Saporta, Executive Director of Prudential Policy at the Bank of England, explains why the Prudential Regulation Authority (PRA) has to be robust but flexible when responding to the future challenges. View Article |
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Capital Markets Union |
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ECB's Cœuré: European capital markets: priorities and challenges
Benoît Cœuré, Member of the Executive Board of the ECB, warned that dismantling regulatory standards would be a mistake, and would add to market fragmentation. View Article |
CEPS: A market finance action plan to revitalise Capital Markets Union
The paper states that the European Union needs an action plan to stimulate market finance across EU markets. As the EU is setting its priorities for the next five years, a rigorous assessment of Capital Markets Union and a new focus is required. View Article |
ESMA consults on short-termism in financial markets
ESMA published a questionnaire which aims to gather evidence on potential short-term pressures on corporations stemming from the financial sector. View Article |
IOSCO examines liquidity in corporate bond markets under stressed conditions
The report examines how liquidity in secondary corporate bond markets tends to evolve when those markets experience stress. The report seeks to increase understanding of how stressed conditions may affect both bond and other financial markets and the financial system more broadly. View Article |
ISDA: Regulatory certainty is crucial
Participants in the US derivatives market received an important clarification from the Commodity Futures Trading Commission (CFTC) month that will ensure users aren’t subject to unnecessary costs and operational burdens. View Article |
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Insurance |
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GFIA policy recommendations to the Japanese G20 presidency from the global insurance industry
The Global Federation of Insurance Associations (GFIA) commends the decision by the Government of Japan to take up “Ageing and its policy implications” as one of the main priorities for the G20 Finance Track. View Article |
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Asset Management |
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IA lays out vision for the future of the investment management industry
The Investment Association (IA) has revealed its plans for a new fund structure specifically designed to invest in illiquid asset classes – part of three areas of development for the investment management industry over the next few years. View Article |
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Corporate Governance/Accounting |
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EuropeanIssuers unveils its vision: Competitiveness is the core for a Sustainable Europe
As the European Union enters a new political cycle with the newly elected European Parliament and Commission, EuropeanIssuers released its Vision Paper for 2019-2024. View Article |
ECIIA: Internal audit in the insurance industry guidance
The document aims to enhance the overall effectiveness of Internal Audit, and its impact in the European Insurance industry. It interprets the high level principle based requirements for Internal Audit functions in the insurance undertakings, set under the Solvency II framework. View Article |
IASB's Hoogervorst: Strengthening the relevance of financial reporting
Chair of the IASB Hans Hoogervorst outlined the IASB's plans to maintain and strengthen the relevance of financial reporting in two specific areas: primary financial statements and management commentary. View Article |
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Financial Services Policy |
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FSB Chair reports to G20 Leaders ahead of Osaka Summit
The Financial Stability Board (FSB) published FSB Chair Randal K. Quarles’ letter to G20 Leaders ahead of their Summit in Osaka on 28-29 June, together with a progress report on implementation of the G20 financial regulatory reforms. View Article |
ICMA summarises and comments on EU TEG reports and status of EU sustainable finance plan
ICMA has published a paper providing an overview and comments on the Technical Working Group on Sustainable Finance's reports and guidelines relating to its 4 key deliverables. View Article |
BIS: Big tech in finance: opportunities and risks
The entry of large technology firms such as Alibaba, Amazon, Facebook, Google and Tencent into financial services, including payments, savings and credit, could make the sector more efficient and increase access to these services, but also introduces new risks, the BIS' Annual Economic Report warns. View Article |
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Political |
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European Council conclusions
The European Council adopted conclusions on the next institutional cycle, the MFF, climate change, disinformation and hybrid threats, external relations, the European Semester and enlargement. View Article |
POLITICO: EU leaders fail to choose EU leaders
EU leaders failed to agree on nominees for the European Commission presidency and other top posts, and said they will reconvene on June 30 to try again. View Article |
POLITICO: EU top jobs: It’s gonna get ugly
As the European Council convened to try to select a new slate of EU leaders, one thing was clear: Nobody has the upper hand. View Article |
POLITICO: In fight for EU top jobs, conservatives down but not out
When it comes to the EU’s future leadership, the center-right European People’s Party is still in charge — for now. The group faces decision on whether to stick with Manfred Weber as candidate for European Commission chief. View Article |
ECA: Focus on performance in EU cohesion spending should be strengthened
Stronger efforts are needed to embed effectiveness and efficiency in EU cohesion policy, according to a new briefing paper by the ECA. The association notes that moves towards this goal in the design of the legislation have not always been matched by effective action on the ground. View Article |
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Economic |
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Joint letter of Presidents Donald Tusk and Jean-Claude Juncker on the upcoming G20 summit
EU leaders call on the G20 leaders to step up action to avoid the existential climate threat, to engage in delivering free and fair global trade, to decrease inequalities, harness the effects of digitalization and to promote a sustainable development. View Article |
IFAC issues Call-to-Action as tax, trade and transparency dominate G20 agenda
IFAC urged G20 countries to pursue smart regulation, heightened transparency, and inclusive growth to embrace Japan’s vision for an innovative and intelligent “Society 5.0”. View Article |
Bruegel: Redefining Europe’s economic sovereignty
This Policy Contribution delves into the position of the EU in the current global order. The authors examine the specific problems that China and the US pose for European economic sovereignty, and consider how the EU and its member states can better protect European economic sovereignty. View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union