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We are focussed on the big themes for the next legislative period and are targeting the interaction of the driving forces of politics and economics as they force the required changes in over-arching financial regulation, thus promoting greatar financial integration in Europe. Naturally, these factors include ESG and Fin Tech. Details of these services are here
My video invitation to the 157th Brussels for Breakfast on 5th December is here. Some seats are available at the live meeting at CISI, and I would be delighted to hear suggestions for topics that should be covered. E-mail me: Graham@grahambishop.com
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Articles 05 December 2019 - 12 December 2019
General Policy
Main results - Economic and Financial Affairs Council : The Economic and Financial Affairs Council took stock of progress on the banking union. It also adopted a work plan on climate action and conclusions on energy taxation, money laundering, capital markets union, non-performing loans and the financial architecture for development. View Article
IMF: Deepening the EU’s single market for services : To remove the cross-border restrictions on services trade, the IMF economists suggest combining incentives such as financial support, technical assistance and improved communication on barriers with more effective enforcement. View Article
Banking Union
EBA updates the estimates of the impact of the implementation of Basel III and provides an assessment of its effect on the EU economy : This publication includes an assessment of the impact of the revisions to the credit valuation adjustment and market risk frameworks, and the corresponding policy recommendations. It also provides a macroeconomic impact assessment of the full Basel III package. View Article
Christine Lagarde and Mario Centeno - EurActiv
Financial Times: Eurozone ministers divided over banking union negotiations : Brussels has warned that member states are sharply divided after Eurozone finance ministers failed to agree on plans to accelerate the completion of a bloc-wide banking union, casting doubt over completion of the project. View Article
European Parliament: The main factors for the subdued profitability of significant banks in the Banking Union : This paper surveys some recent studies on the causes of low profitability, and discusses several actions that the SSM may want to undertake to support banks in their quest for higher returns. View Article
City AM: Moody’s downgrades outlook for European banks amid slowdown : Credit ratings agency Moody’s has downgraded its outlook for European banks to negative, predicting that weak economic growth will cause loan quality and profitability to suffer over the coming year. View Article
Bruegel: Non-performing loans’ legacy versus secondary markets : Eleven years since the start of Europe’s financial crisis, and the legacy of non-performing loans in the EU, though much smaller, is still a live issue for some member states, writes Joanna Surala. View Article
EBA updates its guidelines for the reporting of funding plans : The changes include additional details of forecasted market based funding, alignment to FINREP reporting and additional proportionality for small and non-complex credit institutions. This update is the result of the experience gained through the EBA's assessment of banks' funding plans in the recent years. View Article
Financial Times: Worrying signs that a great global deregulation has begun : The great global deregulation has begun. The signs are subtle so far, but last week threw up four pieces of evidence that the US and Europe are poised to compete to ease bank regulation — in turn threatening the co-ordinated global approach that has helped make the international banking system safer in the decade since the financial crisis. View Article
ESMA issues briefing on benchmark recognition : The briefing is addressed to administrators of benchmarks located outside the European Union that intend to apply for recognition in the EU. View Article
EBF: More than 650 banks support global action against money laundering : Law enforcement authorities from 31 countries, supported by Europol, Eurojust and the European Banking Federation, have stepped up their efforts to crack down on money mule schemes that rope in victims often unaware that the money they are sending is part of an elaborate money laundering scheme. View Article
EPC: 2019 Payment threats and fraud trends report : The 2019 Payment threats and fraud trends report provides an overview of the most important threats in the payments landscape, contributes to the creation of awareness on payment threats and fraud trends, and to help payment stakeholders decide on possible actions. View Article
Capital Markets Union
Claudia Buch - Bundesbank Twitter
BIS - Claudia Buch: Capital Markets Union - a central banking perspective on the way forward : Claudia Buch, Vice-President of the Deutsche Bundesbank, spoke about three aspects that are paramount for the CMU project: transparency in terms of data and relevant regulations, improved communication and financial literacy and evaluation of policies and identification of relevant frictions. View Article
IPE: Dutch pension fund body sets out stall on CMU agenda : The Dutch occupational pension funds association has set out its stall concerning the CMU project, issuing recommendations based on those from a group of experts created on the initiative of the finance ministers for France, Germany and the Netherlands. View Article
Financial Times: EU regulator says MiFID II rules have failed on market data costs : European exchanges will face closer monitoring of the prices they charge customers for basic data, after regulators ruled that the MiFID II markets revamp had not delivered on its aim of cutting the costs of trading. View Article
Financial Times: MiFID II creates ‘existential threat’ for small research groups : Boutique research providers’ business models are coming under increasing pressure two years on from the introduction of EU markets rules, in what an industry association describes as an “existential threat” to the sector. View Article
ESMA publishes 2nd Annual Report on EMIR penalties and supervisory measures : The Report found that some supervisory areas are highly harmonised, such as NCAs’ sources of information used to check compliance with EMIR requirements, including trade repository data, their competences, and NCAs’ supervisory and enforcement tools. View Article
ESMA values EU derivatives markets at €735tn : The Report, based on data submitted under the European Markets and Infrastructure Regulation, provides a comprehensive market-level view of the EU’s derivatives markets in 2018, which had a total size of €735tn gross notional amount outstanding, an increase of 11% on 2017. View Article
EFAMA: Net sales of UCITS equity funds return to positive territory : The European Fund and Asset Management Association (EFAMA) has published its latest Investment Fund Industry Fact Sheet, which provides net sales of UCITS and AIFs for September 2019. View Article
CPMI and IOSCO share authorities' experiences in cooperation to increase FMI safety and efficiency : CPMI and IOSCO published a report outlining ways in which financial authorities cooperate to promote the safety and efficiency of financial market infrastructures (FMIs). View Article
ESMA publishes report on the responses received to its consultation on the ELTIF regulation : ESMA publishes the final report on the draft Regulatory Technical Standards (RTS) under Article 25 of the regulation on European long-term investment funds (ELTIF). View Article
ESMA publishes proposals on CRAs internal control functions : ESMA launched a consultation on proposed Guidelines on Internal Controls for CRAs, which sets out the systems and controls that credit rating agencies should have in place to meet the requirements of the CRA Regulation on internal controls. View Article
Environmental, Social, Governance (ESG)
Ursula Von der Leyen - VoxEU
European Commission: The European Green Deal sets out how to make Europe the first climate-neutral continent by 2050 : The European Commission presented The European Green Deal – a roadmap for making the EU's economy sustainable by turning climate and environmental challenges into opportunities across all policy areas and making the transition just and inclusive for all. View Article
EBA pushes for early action on sustainable finance : The EBA published its Action plan on sustainable finance outlining its approach and timeline for delivering mandates related to ESG factors. The Action Plan also aims to communicate key messages on the EBA’s policy direction and the expectations from financial institutions on areas where action is needed now to support the move towards more sustainable finance in the EU. View Article
POLITICO: Europe defines what financiers can call ‘green’ : The ‘taxonomy’ law aims to attract much-needed capital to meet EU climate goals. With Europe’s green push comes new business opportunities — but Brussels wants to ensure they’re the right ones. View Article
EBF presents proposals to scale up sustainable finance : The recommendations are part of a new EBF report titled ‘Encouraging and Rewarding Sustainability‘ that identifies how public-private cooperation can be leveraged to accelerate sustainable finance. View Article
EURACTIV: EU banking regulator: ‘No green economy if we encourage banks to be insolvent’ : Europe wants to use all the tools available to transit toward a ‘green’ economy. But ‘green’ lending should not be incentivised by easing capital requirements for banks, the European Banking Authority chief, Jose Manuel Campa, said in an interview. View Article
POLITICO: Don’t bank on the ECB saving the planet : Christine Lagarde is confronting the limits of her pledges for the central bank. The ECB could put greater focus on climate change in its macroeconomic projections and make sure that supervised banks are taking environmental risks seriously. View Article
EIB and Amundi: The Green Credit Continuum programme achieves a first closing of EUR 253 million : A few days ahead of the adoption of the Green Deal project by the European Council, Amundi and the EIB are pleased to announce the fundraising for the first vintage of the Green Continuum programme has successfully reached EUR 253 million as of 30 of November 2019. View Article
ACCA: Green New Deal, Sustainable Finance & the role of corporate governance & reporting - how integration and impact are the way forward : International and EU experts discussed the contribution of corporate governance and reporting to the Green New Deal and called for global and concerted action at a joint ACCA-IIRC-CFA Institute conference in Brussels. View Article
The Economist: Climate change has made ESG a force in investing : ESG scores are becoming ever more important in the world of investing and capital markets. At least $3trn of institutional assets now track ESG scores, and the share is rising quickly. View Article
City AM: City regulator toughens up financial accountability rules after scandals : Tougher accountability rules have been extended to cover around 47,000 firms across the financial sector, as the financial watchdog seeks to clean up the City’s reputation following a string of scandals. View Article
Fin Tech Regulation
EURACTIV: Libra maintains 2020 approval target despite concerns : Facebook-sponsored digital currency Libra is determined to get the green light by European regulators next year, despite the numerous concerns raised by EU finance ministers, a senior representative of the project said. View Article
City AM: Too much regulation on bitcoin and cryptocurrency could scare away future tech innovators : Back in October, the FCA closed its consultation on banning the sale of cryptocurrency derivatives to retail investors. A consultation that hopefully will start a collaborative discussion, bringing crypto and its regulatory framework up to speed with the rapid growth of the industry. View Article
FSB reports consider financial stability implications of BigTech in finance and third party dependencies in cloud services : The FSB published two reports that consider the financial stability implications from an increasing offering of financial services by BigTech firms, and the adoption of cloud computing and data services across a range of functions at financial institutions. View Article
IASB: Big techs and new entrants: threats to financial stability? : Chair of the Trustees Erkki Liikanen delivered a keynote speech at L’Agefi’s 10th Meeting of the Financial Industry in which he tackled the question of whether big tech is a threat to financial stability. View Article
CFA Institute says firms must act today to take advantage of AI and big data opportunities : CFA Institute announced in its latest global report AI Pioneers in Investment Management that relatively few investment professionals are currently using AI and big data applications in their investment processes. While investment management professionals surveyed for the report indicated their interest in AI and big data applications, progress in adopting the technology has been slow. View Article
Friends' Standard Services
157th Brussels for Breakfast – CPD Notes : Organised by the Centre for the Study of Financial Innovation (CSFI), hosted by CISI and with co-presenter Pablo Portugal (AFME). This blog complements the subsequent 48th Brussels 4 Brunch 30-minute CISI webinar that is also available to Friends of GrahamBishop. View Article
Economic Policies Impacting EU Finance
Main results - Eurogroup : In regular format, the Eurogroup assessed the 4th enhanced surveillance report on Greece and eurozone budgetary prospects for 2020. In inclusive format, the Eurogroup prepared a report on the deepening of the Economic and Monetary Union for the December Euro Summit. View Article
EurActiv: Eurogroup fails to move forward on eurozone reform : EU finance ministers failed to reach an agreement on the reform of the EU’s bailout fund and move to political discussions about the European Deposit Insurance Scheme ahead of the euro summit next week. View Article
EurActiv: EU to strengthen trade sanctions as WTO paralysis starts : As the international system for settling trade disputes became crippled, Europe will in the coming days propose ways to bolster its sanction toolbox against countries that adopt illegal trade measures and block the renewal of the WTO’s appellate body. View Article
EurActiv: EU budget rules need rethink, says Gentiloni : The EU’s new economy commissioner Paolo Gentiloni said the bloc should consider loosening its strict budget deficit rules to respond to climate risks and weak growth, echoing a similar call by French President Emmanuel Macron. View Article
Project Syndicate: The policy debate Europe needs : How can the eurozone get the fiscal stimulus it needs, and which ECB President Christine Lagarde is urging, in the face of the refusal by some countries, starting with Germany, to run budget deficits? Barry Eichengreen elaborates on a good and feasible answer to this question. View Article
Project Syndicate: The European Central Bank needs a new mandate : The ECB needs a more realistic and flexible mandate, defined by a broader price-stability objective. But timing is everything: If the ECB tries to move the goalpost while it is missing the shot, the blow to its already diminished credibility could be serious, writes Marcel Fratzscher. View Article
BIS: Easing trade tensions lift sentiment: BIS Quarterly Review : Easing trade tensions in mid-October triggered a risk-on phase in global financial markets. Equity prices rallied, reaching new highs in the United States in November. At the same time, credit spreads tightened, and yields on safe sovereign bonds edged higher. Nevertheless, the economic outlook remained tepid and inflation low, leading central banks to ease further. View Article
Broadening the International Role of the Euro
Financial Times: How the euro has become ‘the world’s new carry trade’ : The euro has entered a new phase, according to Deutsche Bank, rivalling Japan’s yen as the currency everyone wants to borrow — but no one wants to own. View Article
EU27 Politics
Josep Borrell - FT
POLITICO: Borrell urges EU to be foreign policy ‘player, not the playground’ : The EU's new top diplomat, Josep Borrell, has urged the bloc to step up and be a real geopolitical player or risk Europe becoming just a playground for other big powers. View Article
Financial Times: The EU needs new relationship models for non-members to prosper : ‘Outer circles’ of association would mean more countries could plug in to its sphere of influence, writes Martin Sandbu. View Article
Vox EU: The geography of EU discontent : Using results from recent legislative elections to map the geography of EU discontent, this column finds that purely geographical factors – chiefly, long-term economic and industrial decline – are the fundamental drivers of anti-European voting. View Article
Basic Economic Indicators
GDP up by 0.2% and employment up by 0.1% in the euro area : Seasonally adjusted GDP rose by 0.2% in the euro area (EA19) and by 0.3% in the EU28 during the third quarter of 2019. The number of persons employed increased by 0.1% in both the euro area and the EU28 in the third quarter of 2019 compared with the previous quarter. View Article
Volume of retail trade down by 0.6% in euro area : In October 2019 compared with September 2019, the seasonally adjusted volume of retail trade decreased by 0.6% in the euro area (EA19) and by 0.4% in the EU28. View Article
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Jon Stone
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YouGov
@YouGov
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POLITICO Europe
@POLITICOEurope
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Germany is optimistic that the EU and UK can negotiate a limited free-trade agreement by the end of 2020 politi.co/2sfrz04
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Eline Schaart
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Ursula von der Leyen
@vonderleyen
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The #EUGreenDeal is more than just a vision. It is a roadmap for action. It has 50 actions for 2050 – for a climate and nature friendly Europe. Our goal is to reconcile our economy with our planet, and make it work for our people. This is Europe's 'man on the moon' moment.
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Jennifer Rankin
@JenniferMerode
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The flags are out, but nobody’s coming. Boris Johnson (no surprise) will not attend the EU leader summit this Thursday and Friday. ? @eucopresident? Charles Michel will represent UK instead. pic.twitter.com/W5cS86FYpR
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Fintan O'Toole
@fotoole
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New Europe
@New_Europe
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Bloomberg Brexit
@Brexit
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Pablo Portugal
@PabloPortugal4
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Graham Bishop #FBPE
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Thanks Pablo... I enjoyed the debate greatly as there was so much to discuss on so many topics! Thank you for joining us and looking forward to the 158th B4B on 14th January.
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Graham Bishop #FBPE
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