ASBJ and IASB meeting on convergence progress

The Accounting Standards Board of Japan (ASBJ) and the IASB have held their first two-day meeting since the announcement of an initiative to accelerate convergence between Japanese GAAP and IFRSs. The boards agreed on future arrangements for interaction both by board members and by staff in order to achieve convergence within the agreed timetable.

Economic and Financial Newsletter - Summer 2007

The AMF issued its Economic and Financial Newsletter noting that the world’s major stock markets suffered from the turbulence during the summer. Although the state of the US housing market has been causing concern since the start of the year, equities rallied strongly throughout the second quarter. The sub-prime crisis halted the rally and spread quickly to equities and interbank markets, becoming systemic in the process. 

Commission fines Visa €10.2 million for refusing to admit Morgan Stanley as a member

The Commission has fined Visa for a serious infringement of the EC Treaty and EEA Agreement rules on restrictive business practices. The Commission found that the exclusion of Morgan Stanley from Visa membership restricted competition in the provision of credit card acceptance services to merchants in the United Kingdom.

Speech Kroes before ECON Committee

Speaking before the EP’s Economic and Monetary Affairs Committee, Commissioner Kroes said her services hope to complete an inquiry into MasterCard and rule on the credit card group's interchange fee payments network by the end of the year. Her services will also look at Visa. She reiterated that she is "concerned" by the effect of interchange fees on competition and that scrutiny of the payment cards sector remains a "priority for action".

Commission approves proposed acquisition of ABN AMRO assets by Fortis

The Commission has cleared the proposed acquisition of certain assets of the Dutch banking group ABN AMRO by Fortis. The Commission's decision is conditional upon the upfront divestiture of ABN AMRO's Dutch factoring subsidiary and part of its commercial banking business in the Netherlands.

Speech McCreevy before JURI Committee

Speaking before the EP’s JURI Committee Commissioner McCreevy sees no need for action at EU level on the issue of the “one share -  one vote” principle. He also announced that he will not proceed on the 14th Company Law directive.  "Existing EU legislation, the takeover bids directive, the 2006 amendments of the accounting directives, the transparency directive and the recently adopted shareholders' rights directive already contain ample provisions on transparency”, he said.

CEA position paper on Solvency II

The CEA issued a position paper that provides an overview the preliminary comments on the new Solvency II provisions of the Framework Directive. Although supporting the overall framework, the CEA outlines areas of improvement. CEA believes it is essential that the supervisory requirements are proportionate and harmonized.

ECON meeting on Solvency II

In a first exchange of views on the recently published draft proposal on Solvency II, Rapporteur Peter Skiner outlined his views and presented a working document.  “There are still several open issues including the geographical diversification effects for groups, and harmonisation of actuarial methodologies”, Mr Skinner said. “Moreover, issues such as securitisation, in particular regarding credit default swaps need to be discussed.” A public hearing will be held on 18 December, followed by a second exchange of views on the 19th.

Depositories question European Central Bank settlement plans

The two leading central securities depositories Euroclear and Clearstream have asked for more clarity over the ECB’s plan to introduce a single platform for European securities settlement through the T2S project. "We are neither for nor against T2S", Paul Symons, head of public affairs at Euroclear said. "It is still too early to decide whether we will join a system that won't go live until 2013 and is voluntary".

EP first consideration on new Consumer Credit Directive

In a first consideration of a common position on the new proposal of the on Consumer Credit Directive, rapporteur Kurt Lechner outlined the issues he will be working on within the next few weeks. Issues under discussion include among others Article 2, the scope of the directive. He intends to amend the amount of credits to EUR 500 as a minimum, and EUR 50 000 as a maximum. An ECON Workshop is planned for 10 October. Mr Lechner intends to present his draft report beginning November.

CEBS demands appropriate status and tools

Danièle Nouy, Chair of CEBS, demanded the European Parliament to “consider endowing the Committee with the appropriate status and tools to achieve its objectives.” “We do not ask to be transformed into an EU regulatory agency”, Nouy said, “but we find it odd that a Committee entrusted with such a daunting task cannot be mentioned and attributed tasks in Community legislation.”  

IAS Plus Newsletter on revisions to IAS 1

Deloitte issued a special edition Newsletter on IAS 1 on the Presentation of Financial Statements. The main changes from the previous version require, among others, that an entity must present all non-owner changes in equity either in one statement of comprehensive income or in two statements.

Paulson announces new auditing committee

US Treasury Secretary Paulson announced the members of the Advisory Committee on the Auditing Profession. The public committee will make recommendations to encourage a more sustainable auditing profession. The Treasury expects the committee to produce findings and recommendations by early summer 2008.  

AMF decision on equivalence of US standards for admission to trading on a regulated market

The AMF has agreed to consider that the US documents filed with the US SEC over the last twelve months can constitute a valid filing for the purpose of the AMF’s individual approval of the prospectus to be published in France. This approval would be facilitated in case of pre-existing review by the SEC.

Banks not ready for Sepa deadline

European bankers are pessimistic about their ability to meet the initial January 2008 deadline for first stage implementation of Sepa, according to research conducted by Finextra. The survey revealed that over half of respondents thought that meeting the January 2008 deadline was unachievable. 

'If you don’t know it, don’t buy it' – Laboul

Pensions funds should be more prudent in their bid to prevent scheme funding losses and resist buying products they do not fully understand, according to the OECD’s Andre Laboul. He argued that rating agencies did play a big role in the run-up to the crisis. “Buyers need to be more cautious and only buy something they understand,” said Laboul.

City report: London retains its lead in Global Financial Centres

The City of London released its latest Global Financial Centres report, which rates the competitiveness of the world’s top 50 financial centres. The report ranks London and New York as the only two truly global financial centres, well ahead of the two Asian centres of Hong Kong and Singapore.

OECD to revise governance guidelines

The OECD will revise its guidelines on the governance of pension funds. “We will have a discussion in December and based on this we expect to have upgraded guidelines sometime in 2008, depending on the speed of the process,” Andre Laboul, the OECD’s head of the financial affairs division said. “There is clearly a weakness in identifying the defined contribution issues.”

BBA: Deposit guarantee reform just part of the story

Reform of the scheme guaranteeing savers' deposits must not distract policymakers from learning the real lessons of the Northern Rock affair, says the BBA. "We still need urgently to understand why our regulatory framework did not break the chain of events which resulted in such dramatic scenes outside branches of a British bank", Mrs Knight said. 

CESR Annual Report 2006

CESR published its 2006 Annual Report. The main part of the annual report outlines CESR’s key initiatives throughout the period and the achievements of CESR to bring about supervisory convergence in day-to-day implementation.

SEC may seek new disclosures from rating agencies

The SEC is considering asking ratings agencies for new forms of disclosure as a way of shielding the credit markets from future crises, SEC Chairman Christopher Cox told the Senate Banking Committee during a September 26 hearing.  The hearing was held to examine the role the ratings agencies played in the current market meltdown and the rating firms' actions that may have contributed to the problems. 

Business Groups express support for IFRS proposal

Close of the comment period for SEC proposal on the reconciliation aggrement between IFRS and U.S. GAAP, many business groups and public companies from the U.S. and overseas expressed their support for the proposal. Supporters of ending reconciliation believe that any remaining differences between IFRS and GAAP should not stand in the way of advancing the SEC's proposal.

One in four firms consider cross-border pension

A quarter of large European company pension funds are thinking of introducing pan-European pension plans within the next 10 years, consultancy Towers Perrin has claimed. “Companies are beginning to consider that, instead of implementing a full and complicated pan-European pension fund, they could still gain from combining aspects, such as asset pooling, certain types of plans for some countries, or for certain groups of employees.”

BBA report on European supervisory convergence

The BBA issued a report on European supervisory convergence and the Lamfalussy process. There needs to be a better common view of what supervisory convergence is needed and how it should be achieved, the report states. CEBS and CESR should be given greater opportunity to do more work on achieving common regulatory outcomes and supervisory work methods.

Solvency II is a ‘devil in disguise’

Solvency II will load a very high cost on European occupational pension schemes, according to Jaap Maassen, chairman of the EFRP. The future solvency regime will be a serious threat to affordability if applied mechanically to institutions offering occupational retirement provision (IORPs), suggested Maassen. “As far as I am concerned Solvency II is a devil in disguise,” he said. 

Speech McCreevy: Current issues in the EU banking sector

Commissioner McCreevy outlined the first lessons  from the sub-prime crisis. “The whole episode reinforces the need for greater international co-operation among regulators – EU-US and wider”, he said and announced that the ECOFIN Council in November will adopt an initial work programme setting measures that need to be examined in the light of recent market turmoil. The Commissioner will address the issues to be investigated in more detail in October.