Graham Bishop.com

This week in "Brussels"

25 March 2021

Dear [[firstName]],

Welcome to our Gold Friends weekly e-mail.

My highlights of the week – lots to choose from amidst a pre-Easter rush! The Conference on the Future of Europe (CoFE from now on…) has finally got underway – a year late but still planned to report next May. What message will EU citizens send about the longer term future while responding in the short-term to the vaccination shambles? How will this feed into the necessary deepening of the monetary union?

Council agreed the EU’s strategy for instant retail payments while Bank of America reported on the astonishing electricity usage of the Bitcoin rival – “coins” now consume 0.4% of global electricity! Better Finance highlighted retail investor’s difficulties in accessing full data on equity markets while CEPS pointed to the sharp rise in retail “ESG responsible” investing – underlining the paramount need to keep these investors’ faith in the evolving standards. CCP stability was brought back onto the agenda – pointedly mentioning Brexit.

Graham Bishop

Articles from 19 - 25 March 2021

General Financial Policy

Work begins on the Conference on the Future of Europe : The work on the Conference on the Future of Europe has officially started with the constitutive meeting of the Executive Board held on 24 March. View Article

Fondation Robert Schuman:The Greens will do everything they can to make the Conference on the future of Europe a success! : Interview with Franziska Brantner: Member of the German Bundestag, member of the European Affairs Committee, spokesperson for European policy of the Alliance90/Green group View Article

AFME Report reveals contribution of European banking and capital markets in financing the recovery : European banking and capital markets have provided unprecedented levels of funding and record volumes of market support to assist businesses and economies during Covid-19, a report by AFME revealed today. View Article

Breugel: New EU insolvency rules could underpin business rescue in the COVID-19 aftermath : Corporate bankruptcies are set to rise in the context of COVID-19. EU countries should speed up adoption of recent insolvency reforms and, in addition, offer consistent treatment to restructuring finance. View Article

Banking Union

Speech by SRB Chair Elke König to the ECON Committee (European Parliament) : "I want to address some of the current discussions around enhancements of the wider crisis management framework as well as aspects of completing the Banking Union." View Article

The EBA takes steps to address ‘de-risking’ practices: Three instruments clarify that compliance with anti-money and countering terrorist financing (AML/CTF) obligations in EU law does not require financial institutions to refuse, or terminate, business relationships with entire categories of customers that they consider to present a higher ML/TF risk. View Article

BETTER FINANCE Position on NPLs: Research from consumer organisations and BETTER FINANCE member organisations far too often points to the heavy-handed practices of debt collectors when dealing with defaulting and distressed borrowers. View Article

Retail payments: Council supports action to promote instant payments and EU-wide payment solutions : EU member states want to make it easier for consumers to pay in shops, and to make e-commerce transactions widely available, convenient and safe across the EU. View Article

The Economist: America used to be behind on digital payments. Not any more : PayPal, Stripe and others are only just getting started View Article

Capital Markets Union

The Commission welcomes the European Parliament’s and the Council’s technical approval of rules on the pan-European personal pension product : Personal pensions: Commission welcomes the European Parliament’s and the Council’s technical approval of rules on the pan European personal pension product (“PEPP”), an EU framework to address pension gaps and pave the way for an EU-wide personal pensions market View Article

EIOPA: Survey on the Pan-European Personal Pension Product : Following the publication of the Delegated Regulation supplementing the Pan-European Personal Pension Product (PEPP), EIOPA today launched a survey on potential offering of PEPP. View Article

CCP Supervisory Committee Chair delivers keynote speech at the Derivatives Forum Frankfurt 2021 : Supervisory convergence aims to ensure that the requirements in EMIR are applied comprehensively and consistently to EU CCPs and that the supervisory activities of national competent authorities are fully aligned when mitigating risks for financial stability. View Article

ISDA: Creating a Better Test for Capital : When it comes to implementing new standardized methodologies, this testing can be achieved through an industry benchmarking initiative that allows a firm to compare its approach with others. View Article

ICMA publishes landmark 40th survey of the European repo market : The survey, which calculated the amount of repo business outstanding on 9 December 2020, from the returns of 60 financial institutions sets the baseline figure for the outstanding size of the European market at EUR 8,285 billion compared with EUR 7,885 billion in June 2020 and down from the record high of EUR 8,310 billion in the December 2019 survey. View Article

Vox: ‘Dash for cash’ versus ‘dash for collateral’: Market liquidity of European sovereign bonds during the Covid-19 crisis : In March 2020, a ‘dash for cash’ driven by the Covid-19 crisis affected the liquidity of the US Treasury bonds market as well as numerous other financial markets around the globe. This column investigates how euro area sovereign bond markets fared during the same period. View Article

Better Finance: Capital Markets Union at Risk as European “Retail” Investors have less and less access to Equity Market Data : New research by BETTER FINANCE[1] found that the equity market data published by the four largest EU equity markets (in 2019, according to ESMA) on their websites are either totally or partially[2] de facto not accessible for non-professional users. View Article

CEPS: Can responsible investing encourage retail investors to invest in equities? : The low participation of retail investors in the equity market is a concern for many countries. It is a necessary condition for the development of capital markets in Europe and a key factor for funding post-Covid economic recovery. View Article

Insurance Europe: European Single Access Point should prioritise ESG data required to fulfil EU sustainability requirements : Robust, comparable and reliable ESG data is vital for identifying and assessing sustainability risks in insurers’ activities and is necessary to enable investors to steer their portfolios towards sustainability objectives, in line with the Paris Agreement and the European Green Deal. View Article

CRE: Insurers urged to use capital and expertise to build disaster resilience : The insurance industry must mobilise its technical expertise and trillions of dollars of capital to help increase resilience to major disasters, said panellists speaking at the Business of Resilience Conference hosted by the UK Department of International Trade. View Article

AIMA publishes paper on liquidity risk management in alternative funds : AIMA has published a paper on liquidity risk management (LRM) in alternative funds which primarily examines LRM in relation to alternative investment funds and private funds as these are the predominant types of funds managed by AIMA members. View Article

ESMA clarifies application of position limits pending MiFID II change : ESMA is issuing a public statement on its supervisory approach to position limits for commodity derivatives. The purpose is to clarify the application of position limits and coordinate the supervisory actions of National Competent Authorities (NCAs)... View Article

Environmental, Social, Governance (ESG)

Wirecard: MEPs call for new audit rules, protection for whistle-blowers and EU supervision : MEPs on the Economic and Monetary Affairs and Legal Affairs committees exchanged views with experts on lessons learned from the Wirecard collapse and shortcomings in supervision. View Article

IOSCO Statement on Going Concern Assessments and Disclosures during the COVID-19 Pandemic : In light of current uncertainty resulting from the COVID-19 pandemic, we remain fully committed to the development, consistent application and enforcement of high- quality accounting standards which are of critical importance to the proper functioning of the capital markets—especially in times of uncertainty. View Article

FRC welcomes proposals to strengthen UK corporate governance, audit and reporting : The Financial Reporting Council (FRC) welcomes the consultation launched today by the Department for Business, Energy and Industrial Strategy (BEIS) - Restoring trust in audit and corporate governance to reform the UK’s audit, corporate reporting and corporate governance system. View Article

GRI: New IFRS working group is a ‘logical next step’ : Process towards enterprise value reporting standards: As a logical next step, today IFRS have announced the establishment of a new working group, consisting of international initiatives focussed on investor interests and reporting on enterprise value creation. View Article

GRI: How policymakers can drive sustainability reporting : Launch of new GRI guide on using policy to enable transparency: With rising policy measures across global markets in support of responsible business conduct, GRI has launched a new publication to set out how policymakers can use the power of transparency to affect positive change. View Article

MEP Giegold: 200+ finance professionals call for credible rules in an open letter to the EU Commission : The EU Commission is currently finalising the delegated acts that shape the rules for Sustainable Finance. The so-called taxonomy will determine which financial products and investments can be labelled as green and sustainable and which cannot. View Article

CDSB will collaborate on preparation of Sustainability Standards Board : Today the IFRS Foundation has invited CDSB to join a working group to accelerate convergence in global sustainability reporting: The working group will provide technical recommendations... View Article

CDSB welcomes UK’s leadership in mandatory TCFD implementation : The UK’s consultation to implement the TCFD in its mandatory requirements means that it could be the first G20 country to implement the Task Force’s recommendations. View Article

IFRS Foundation Trustees announce working group to accelerate convergence in global sustainability reporting standards focused on enterprise : It will undertake technical preparation for a potential international sustainability reporting standards board under the governance of the IFRS Foundation.The working group will provide a forum for structured engagement with initiatives focused on enterprise value reporting, as described by the Trustees’ 8 March statement. View Article

CFA Institute Launches First Global Certificate in ESG Investing : New global education program sets standard, enabling investment practitioners to analyse and integrate ESG factors in their daily practice View Article

IPE: Deconstructing 5 Myths about ESG in Index Investing and Tracking Error Considerations : Indexing: A Smart Choice for Sustainable Investing. Indexing is a great choice for investors wishing to incorporate ESG in their portfolios and achieve long-term sustainable returns. View Article

GRI: New and revised human rights standards to be explored : Survey on updating GRI Topic Standards to improve human rights reporting: A survey has launched to seek views on the priority human rights issues that could be included in future in revised or new GRI Standards. View Article

Fin Tech Regulation

Digital Day 2021: EU countries commit to key digital initiatives for Europe's Digital Decade : Ministers representing EU Member States signed three Declarations to pool efforts and resources to promote international connectivity, incentivise the rollout of clean digital technologies and improve the regulatory environment for start-ups and scale-ups. These tangible commitments will help accelerate Europe's green and digital transformation and will contribute to the vision and goals of Europe's Digital Decade. View Article

BDB: Digital identities – steps on the path to an ID ecosystem : Digital identities have now become an integral of part of our everyday lives. Nine out of ten Germans use the internet, around 80 per cent make online purchases and two thirds of them use online banking. View Article

Blomberg: Bitcoin Rally Stirs BofA Alarm on ‘Enormous’ Surge in Energy Use : Coin accounts for 0.4% of global energy consumption, BofA says Consumption may rival that of some of the largest countries View Article

BIS: Multi-CBDC arrangements and the future of cross-border payments : Cross-border payments are inefficient, and technology could play a role in making them better. One means could be through interoperating central bank digital currencies (CBDCs), forming multi-CBDC (mCBDC) arrangements. View Article

BuBa: DLT-based securities settlement in central bank money successfully tested : Deutsche Börse, Deutsche Bundesbank and Germany’s Finance Agency have developed and successfully tested a settlement interface for electronic securities, working with a range of other market participants. View Article

Insurance Europe: EU must clarify relationship between cyber security rules to give insurers legal certainty across Europe : The Directive’s minimum harmonisation principle has resulted in a fragmented landscape for Europe’s insurers. In practice, this means that firms in three member states have been identified as operators of essential services and, as a result, some of them have been subjected to burdensome and costly requirements. View Article

Friends' Standard Services

171st Brussels 4 Breakfast: video with Graham Bishop, Fiona Wright (Brunswick) and Brian Polk (PWC) : There are the negotiations on a MoU, there's the progress (or lack of it) on longer term relations between the EU and UK (and on which 'third country' model the EU should apply). There's also Fabio Panetta's important intervention in the clearing debate, there's the new focus on AML ... View Article

Graham Bishop: The politics of Brexit: Ending the City’s Dominance of European Finance : The Victorian statesman Lord Palmerston famously said 200 years ago “Nations have no permanent friends or allies, they only have permanent interests”. Today, differing views on “permanent interests” fundamentally divide the United Kingdom from the European Union. View Article

Economic Policies Impacting EU Finance

MEPs lay out plans for a tax system fit for the digital age : MEPs called for a reset of outdated international tax rules, including the setting of a minimum effective corporate tax rate and that the EU should go it alone if global negotiations fail. View Article

Taxation: Council adopts new rules to strengthen administrative cooperation and include sales through digital platforms : A large and growing number of individuals and businesses use digital platforms to sell goods or provide services. However, income earned through digital platforms is often unreported and tax is not paid, in particular when digital platforms operate across several countries View Article

EURACTIV: Don’t impose new tax reporting burden on EU businesses : The competitiveness of European businesses is at risk if the EU introduces unilateral public country-by-country reporting, writes Krister Andersson (Vice-president of the Employers’ Group in the European Economic and Social Committee (EESC)). View Article

Brexit

ESMA UPDATES BREXIT STATEMENT ON PROVISIONS OF THE BENCHMARK REGULATION (BMR) : The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has updated its statement on the application of key provisions of the Benchmark Regulation (BMR). View Article

SRB approach to the eligibility of UK law instruments without bail-in clauses after Brexit : The Single Resolution Board (SRB) has published a communication on its approach to liabilities governed by UK law without a contractual bail-in recognition clause as eligible for minimum requirement for own funds and liabilities (MREL). View Article

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