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My take on events of the week to 25 June:
EUCO fails to agree on the Recovery Package – as expected… but then pledges to agree at its 17/18 July special meeting! But will this collide with growing splits on what the Conference on the Future of Europe should achieve?
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CRR “quick fix” completes all legislative stages in just 9 weeks from conception – the EU can act quickly when necessary.
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Banks’ potential loan losses are widely discussed but the insurance industry is also wrestling with vast problems – now and in the future.
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The last chance to extend the Brexit transition expires in five days and the UK is already proposing new laws that do not import the EU’s precise rules.
Graham Bishop
Articles from 19 June to 25 June
General Financial Policy
Remarks by President Charles Michel following the video conference of the European Council : t was the occasion to observe that on different points there is an emerging consensus, which is very positive. But at the same time, we don't underestimate the difficulties. And on different topics we observe that it is necessary to continue to discuss. View Article
EURACTIV: Leaders pledge to agree on recovery package next month : EU leaders held “constructive” discussions on Friday (19 June) on the EU’s massive €750 billion recovery fund to overcome the coronavirus crisis and pledged to reach an agreement next month, despite the enormous differences among the member states. View Article
Conference on the Future of Europe - Council agrees its position : Member states want the Conference on the Future of Europe to get citizens involved in a wide-ranging debate on Europe's future in the coming decade and beyond, including in the light of the COVID-19 pandemic. View Article
Politico: Conference on EU future edges closer — but with clear limits : Ambassadors put the brakes on push for treaty change. Europe is ready for the future. Or at least ready to hold a conference about it. Almost. View Article
FT: Berlin and ECB signal end to legal impasse over bond-buying : German finance minister seeks to reassure constitutional court on flagship policy. Germany’s finance minister has said the stand-off between the country’s highest court and the European Central Bank is about to be resolved “without drama”, adding to signs that a solution could be found. View Article
ECB: New Eurosystem repo facility to provide euro liquidity to non-euro area central banks : Eurosystem repo facility for central banks (EUREP) introduced as precautionary backstop to address pandemic-related euro liquidity needs outside euro areaEUREP to allow broad set of central banks to borrow euro against euro-denominated debt. View Article
POLITICO: EU launches in-depth probe into London Stock Exchange-Refinitiv : The EU executive is concerned that the merger, valued at $27 billion (€24 billion), may result in reduced competition in trading and clearing of various financial data products, citing both vertical and horizontal competition concerns View Article
Banking Union
European Parliament: COVID-19: Easing rules to encourage banks to lend to companies and households : Temporary and targeted relief in prudential rules for EU banks Banks and supervisors will be on the same footing and banking system remains stable Counterbalance the severe economic consequences of the pandemic View Article
COVID-19: Council adopts exceptional rules to facilitate bank lending in the EU : The banking package adopted today provides targeted and exceptional legislative changes to the capital requirements regulation (CRR 2). These will allow credit institutions to fully play their role in managing the economic shock that stems from the COVID-19 pandemic by fostering credit flows. View Article
SSM's Enria: Interview with Il Sole 24 Ore : Wide-ranging interview with Andrea Enria, Chair of the Supervisory Board of the ECB, conducted by Fabio Tamburini. View Article
FT: Bank loan losses: bouncing back : Lenders will come under pressure as state support for business winds down. UK banks helped to stave off economic ruin in the first wave of coronavirus-related financial distress. The next wave could pose a problem. As state support for business winds down, lenders will come under pressure. View Article
EBA publishes revised standards to identify staff with a material impact on the institution’s risk profile : The European Banking Authority (EBA) published today its final draft Regulatory Technical Standards (RTS) on the criteria to identify all categories of staff whose professional activities have a material impact on the institutions’ risk profile (“risk takers”). View Article
Bruegel: Should Denmark and Sweden join the banking Union? : Though outside the euro area, Denmark and Sweden could benefit from joining the European Union’s banking union. It would provide protection in case of any need to resolve at national level a large bank with a Scandinavian footprint, and would mark a choice in favour of more cross-border banking. View Article
BIS: Central banks and payments in the digital era : Payment systems today build upon a two-tier structure provided by the central bank together with commercial banks. The central bank plays a pivotal role by ensuring trust in money, a core public good for the economy at large, while the private sector leads on innovation in serving the public. View Article
UK Finance responds to government’s intention to legislate to facilitate Libor transition : Commenting on chancellor Rishi Sunak’s statement that the government intends to legislate to facilitate LIBOR transition for ‘tough legacy’ contracts, View Article
Capital Markets Union
Clearing houses: Presidency and Parliament reach political agreement on recovery and resolution : The Presidency and the European Parliament reached a deal on a common set of rules for central counterparties (CCPs) and their authorities to prepare for and deal with financial difficulties. Following finalisation of technical work, this will go for endorsement by ambassadors to the EU. View Article
EIOPA publishes its second Discussion Paper on Methodological Principles of Insurance Stress Testing : The European Insurance and Occupational Pensions Authority (EIOPA) published its second Discussion Paper on Methodological Principles of Insurance Stress Testing. It is based on a constructive dialogue and feedback received from stakeholders in the preparation of the first Methodological Paper. View Article
POLITICO: Insurers wrestle with pandemic problem: How to pay the bill : EU could be left out as national industries propose separate solutions. Europe’s insurers are trying to solve a complex math problem set by politicians during the coronavirus outbreak. View Article
Insurance Europe: EIOPA should further clarify and streamline reporting requirements for the PEPP : Insurance Europe has today published its response to a consultation by EIOPA on its implementing technical standards (ITS) for supervisory reporting and cooperation and the exchange of information between authorities for the pan-European personal pension product (PEPP). View Article
FCA seeks industry views on a new prudential regime for UK investment firms : The FCA has today published a discussion paper on a prudential regime for UK investment firms. This marks the first step in introducing a set of prudential rules for investment firms to better reflect their business models and the risk of harm they pose to consumers and markets. View Article
Financial Services Update:Written statement by Chancellor Sunak : The Government believes that comprehensive mutual findings of equivalence between the UK and the EU are in the best interests of both parties and we remain open and committed to continuing dialogue with the EU about their intentions ... View Article
ICMA statement on decision of UK government not to implement CSDR-SD measures : the UK Treasury published a Written Ministerial Statement from the Chancellor of the Exchequer. The Statement outlines a number of areas where the UK is looking to tailor the implementation of EU financial regulation. It stated that it will not implement the EU CSDR-SD regime from February 2021: View Article
Environmental, Social, Governance (ESG)
Sustainable Finance: Commission welcomes the adoption by the European Parliament of the Taxonomy Regulation : The European Commission has today welcomed the adoption by the European Parliament of the Taxonomy Regulation – a key piece of legislation that will contribute to the European Green Deal by boosting private sector investment in green and sustainable projects. View Article
CDSB: Final approval of the EU Taxonomy: a key step towards more transparency on sustainable investments : CDSB welcomes the final adoption of the EU Taxonomy Regulation after this week’s vote in the European Parliament. View Article
EFAMA: 7 recommendations for the upcoming Non-Financial Reporting Directive (NFRD) : ACCA, Accountancy Europe, Association of German Banks (BdB), CDSB, EFAMA, Frank Bold, IIGCC, Schroders, ShareAction, WWF have decided to form an informal group on Sustainable Finance. The group is used as a platform for collaboration and coordination - for interactions with the EU institutions. View Article
IFAC Response to the European Commission’s Non-Financial Reporting Directive Review : IFAC continues to speak out on behalf of the global accounting profession on the topic of non-financial reporting, most recently in response to the European Commission’s review of the Non-Financial Reporting Directive (NFRD). View Article
IOSCO encourages issuers’ fair disclosure about COVID-19 related impacts : The Board of IOSCO issued a public statement highlighting the importance to investors and other stakeholders of having timely and high-quality information about the impact of COVID-19 on issuers´ operating performance, financial position and prospects. View Article
Just Transition Fund: Council agrees on its partial negotiating position : The EU is taking steps to achieve its goal of a climate-neutral economy by 2050 in an effective and fair manner.Today, EU ambassadors endorsed the Council’s partial position for negotiations with the European Parliament on establishing a Just Transition Fund. View Article
CEPS: Sustainable finance in the Covid-19 era : The Covid-19 pandemic has given a brutal reminder about the need to strengthen the resilience of our societies as a whole. View Article
GRI: Funding the transition to a sustainable future : A global fundraising initiative has been launched to safeguard and increase GRI’s ability to deliver the leading sustainability standards that encourage organizations to embrace responsible business practices. View Article
Open Letter to Commissioner for Justice Didier Reynders - Announcement on corporate governance legislative initiatives in 2021 : We, the undersigned organisations, would like to congratulate you for the very important announcement made during several recent online events,... View Article
SSEI: Exchange in Focus: Euronext launches suite of ESG products : Euronext announced the launch of a new suite of ESG-focused products, services and initiatives, designed to provide a robust framework of tools for European capital markets to fuel sustainable growth. The announcement represents a significant step forward in Euronext’s three-year strategic plan. View Article
ECA Journal – Climate Change and Audit : European Court of Auditors journal covers many `sustainable finance' audit topics View Article
Protecting Customers
New rules allow EU consumers to defend their rights collectively : Consumers to be better protected in “mass harm” situations Organisations or public bodies to launch actions on behalf of consumers “Loser pays principle” as safeguard against abusive lawsuits View Article
Fin Tech Regulation
EURACTIV: Commission to present ‘strong’ rules for Facebook’s Libra : The European Commission will present later this year new rules to develop a “sound” crypto-asset market in the EU, including for stablecoins such as Facebook’s digital currency Libra, financial services commissioner Valdis Dombrovskis, said on Tuesday. View Article
Economic Policies Impacting EU Finance
POLITICO: OECD tax chief: US move on digital tax negotiations sends ‘very bad message’ : Washington’s U-turn on global digital tax talks “sends a very bad message” and makes the prospect of a deal before November unlikely, according to the person leading the negotiations at the Organization for Economic Cooperation and Development. View Article
EURACTIV: Europe to push ahead with digital tax despite US ‘threats’ : The European Commission plans to put forward a proposal for a digital tax if international efforts fail this year after the withdrawal of the US, ignoring Washington’s threats if Europe moves ahead. View Article
POLITICO: Gentiloni: EU ready to launch new digital tax if US stalls global talks : ‘We need an understanding in the global negotiations,’ the Commissioner says. View Article
Brexit
Spiegel: The UK Steers Towards a No-Deal Brexit in the Middle of the Pandemic : British Prime Minister Boris Johnson seems to be planning to take his country out of the European Union at the end of the year, even without a deal. The Continent is trying to limit the damage, but it would spell disaster for the British. View Article
EPC: The UK’s decision to leave the EU poses a long-term threat to the European project. : This seems counterintuitive at this moment in time: whatever the outcome of the current negotiations, it is already clear that the fears that were raised in the aftermath of the Brexit referendum in June 2016 – that other countries will immediately replicate the UK’s example – were unfounded. View Article
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