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Welcome to our Gold Friends weekly e-mail.
Highlights of my week: The ECB’s latest Financial Stability Review noted the growing vulnerabilities in housing and securities markets so perhaps the SRB’s blog about “Reinforcing crisis readiness with transfer tools” will be timely. The fall-out from COP26 continues as Accountancy Europe applauded the new approach to global high quality reporting standards and EFRAG is on track to meet its timeline to deliver a European version. Commissioner McGuinness spoke to the payments industry – emphasising the need to complete the rollout of instant payments across the EU. The European Parliament was able to complete the enactment of country-by-country tax reporting – now just 18 months for transposition and then results will flow – or not. The UK continues down its Brexit road and HM Treasury published its proposals to return financial regulation to the UK and expunge all EU law in “several years”. City AM laconically remarked “Good luck to them”.
Graham Bishop
Articles from 12-18 November 2021
General Financial Policy ECB Financial Stability Review shows pandemic risks eased with recovery but vulnerabilities ahead building up : Near-term pandemic-related risks to financial stability have declined as economy rebounds; Growing vulnerabilities in housing markets and stretched financial asset valuations; Potential challenges to recovery and inflation outlook from strains in global supply chains and rising energy prices View Article
Marco Buti - Vox: Lessons from a European journey through two crises : The global financial crisis was a particularly testing episode for the EU. Even more testing has been the impact of the Covid-19 pandemic that erupted in March 2020. In a new book...he retraces the analytical underpinnings of the economic policy responses to the two crises. View Article
Basel Committee finalises revisions to market risk disclosure requirements and voluntary disclosure of sovereign exposures : Voluntary disclosure standards for sovereign exposures set out templates for banks when disclosing their sovereign exposures and risk-weighted assets. View Article
EPC: Germany in the EU after Merkel: A view from Italy : As Germany moves into a new political era after Merkel, Italy remains confident about the country’s leadership role in the EU – as long as it is willing to engage meaningfully with other member states besides France and can raise the bar on foreign policy matters. View Article
Introductory statement by Christine Lagarde, President of the ECB, at the ECON Hearing : View Article
Banking Union EU Commission's Berrigan: “Our ultimate goal is to complete the banking union” : John Berrigan, Director-General FISMA, talks about the European Commission’s proposals to revise capital rules and introduce the Basel III output floor, climate risks, and whether the banking union glass is half full or half empty. View Article
Accountancy Europe: EC’s consultation on AML/CFT legislative package : Accountancy Europe welcomes the European Commission’s package of legislative proposals to strengthen the EU’s anti-money laundering and countering the financing of terrorism (AML/CFT) rules. View Article
ESBG: On the EBA guidelines for Anti-Money Laundering Compliance Officers : ESBG calls for several clarifications and amendments. Particularly, in light of the different transposition of the AML Directive, it is of utmost importance that, where a conflict is unavoidable, national specificities prevail guideline provisions. View Article
SRB: Reinforcing crisis readiness with transfer tools : The SRB’s role is to develop resolution plans that are ready for action at very short notice, for the banks under our remit. If a bank should fail, our goal is to make sure that happens in an organised and orderly way. View Article
Capital Markets Union ALFI RESPONDS TO THE EBA CONSULTATION REGARDING DRAFT RTS ON THE IDENTIFICATION OF SHADOW BANKING ENTITIES : In line with previous position papers, ALFI disagrees with EBA’s approach to classify Money Market Funds and certain AIFs as shadow banking entities. View Article
Insurance Europe: Insurers raise concerns over EIOPA’s proposed changes to rules on technical provisions : Insurance Europe has today published its response to a consultation conducted by the European Insurance and Occupational Pensions Authority (EIOPA) on its proposed revision of guidelines on the valuation of technical provisions... View Article
BIS: Non-bank financial institutions and the functioning of government bond markets : The structure of market making in government bond markets has shifted from a bank-centric model to a hybrid one in which non-bank financial institutions, notably principal trading firms and hedge funds, play an important role alongside banks. View Article
Environmental, Social, Governance (ESG) Basel Committee consults on principles for the effective management and supervision of climate-related financial risks : The consultation paper seeks to promote a principles-based approach to improve banks' risk management practices and supervisory practices related to climate-related financial risks. View Article
Accountancy Europe: Time to deliver on high quality sustainability reporting : Accountancy Europe applauds Commissioner McGuinness’ approach to sustainability standards announced at COP 26 and the consolidation of VRF and CDSB under the IFRS Foundation View Article
Accountancy Europe: The EU Taxonomy and its Disclosures Delegated Act implementation need clarity : We welcome the European Commission’s continuous commitment to sustainability as the key driverof its agenda. The climate emergency requires urgent action and the transition will require fundamentalchange in policies and business practices. View Article
EFRAG: PTF-ESRS – on track to meet ambitious timeline, five months into the drafting of European Sustainability Reporting Standards (ESRS) : The Project Task Force on European sustainability reporting standards (PTF-ESRS) has prepared a detailed five-month status report outlining the progress to date for the elaboration of sustainability reporting standards following the recommendations of the PTF-NFRS View Article
EURACTIV: Austria ready to sue EU over nuclear’s inclusion in green finance taxonomy : Austria’s energy and climate minister Leonore Gewessler told EURACTIV in an exclusive interview that her country was ready to go to court if the EU decides to include nuclear power into the bloc’s taxonomy on sustainable finance. View Article
Hedgeweek: Global private credit market focusing on sustainability : According to a new research paper, Financing the Economy, published by the Alternative Credit Council (ACC) in partnership with Allen & Overy, private credit managers are accelerating the integration of ESG into their investment strategies and engagement with businesses on sustainability. View Article
Invest Europe: European private equity registers new first-half investment record as firms plan to increase focus on environmental and socia : Private equity invests €57bn in H1 2021, a new half-year record; Over 95% of private equity firms intend to focus more on ESG in the near future View Article
BEUC: Consumer perspective on the proposal for a Corporate Sustainability Reporting Directive : Mandatory sustainability reporting standards would give consumers more clarity about the sustainability of their investments, and help to support the transition towards a more resilient, low-carbon economy. View Article
EFAMA: SFDR and the quest for certainty : Although it was not the regulators’ intention for these Articles to be treated as product labels, this has, in practice, split the EU fund universe into three categories. View Article
ACCA: Small businesses say they don't have time or resources they need to be more green : Company bosses also highlighted their own lack of expertise and understanding of where to start with sustainability plans, as well as the fact that the issue is not a priority for the leaders of small enterprises. View Article
Project Syndicate's Hoyer and Sewing: A Capital-Markets Union Is the Key to Greening Europe : In the absence of a true capital-markets and banking union, the European Union will not be able to mobilize the financing it needs to support its green, digital transformation. Europeans must once again turn a crisis into an impetus for deeper integration. View Article
SSE Initiative: Carbon emissions in public markets in G20 countries : The UN Sustainable Stock Exchanges initiative launches today a new Policy Brief on Carbon emissions in public markets. The research analyzed carbon emissions in public markets of over 2,000 companies on 22 stock exchanges in G20 countries. View Article
European Commission: Corporate reporting – improving its quality and enforcement : This consultation will directly feed into an impact assessment that the Commission will prepare in 2022 with a view to: (i) assessing problems with the quality of corporate reporting; and (ii) comparing possible options to remedy these problems. View Article
ACCA welcomes the publication of the EC consultation on strengthening the quality of corporate reporting and its enforcement : The Association of Chartered Certified Accountants agrees with the overarching aim of the consultation - ensuring high quality and reliable corporate reporting for healthy financial markets, business investment and economic growth, as well as cross-border investments and the development of the capital markets union (CMU). View Article
Fin Tech Regulation Commissioner McGuiness: Keynote speech at European Payment Institutions Federation Annual Conference : "I want to speak today about what these changes look like and how they might develop...And I want to lay out how EU rules and regulations could respond to those changes." View Article
FT: ECB's Panetta - The ECB’s case for central bank digital currencies : Sovereign money must continue to play its anchoring role in the digital era View Article
Friends' Gold Services CSFI: 177th Brussels 4 Breakfast with John O'Donnell (Reuters) : As for the push for financial services to shift from London to Frankfurt, Paris etc, it may be a question of timing. Longer term, the trend is (fairly) clear, but, in the short term, there is certainly little appetite in Germany for taking on new business – or new risks. View Article
Economic Policies Impacting EU Finance Remarks by Commissioner Gentiloni at the press conference on the Autumn 2021 Economic Forecast : Disruptions in global logistics and shortages of several raw and intermediate inputs have been increasingly weighing on activity in the EU. Still, strong domestic demand is expected to continue fuelling the expansion in the EU. View Article
POLITICO: Brussels’ deep state takes control over the EU’s deficit rule debate : The Commission’s plan will try to address long-standing distrust among ‘frugal’ capitals toward the South. View Article
Corporate tax transparency: MEPs okay new country-by-country reporting rules : Multinationals will have to publically disclose the amount of tax they pay in each EU country; Some flexibility but detailed rules to prevent abuse by multinationals View Article
Brexit and the City HM Treasury: Financial Services Future Regulatory Framework Review: Proposals for Reform : It sets out how we intend to return responsibility for designing and implementing regulatory requirements to the UK regulators, a break from the approach under EU law. View Article
POLITICO: City presses for more concessions in UK regulatory reform : The industry, campaigners and MPs were disappointed by proposals to overhaul the way financial rules are made. View Article
City AM: Treasury needs to play nice with regulators to make a success of post-Brexit rules : The Treasury has tasked the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) with the mammoth job of cleansing the UK of legacy EU laws. They should be done in “several years”. Good luck to them. View Article
City AM: Brexit in the City: New powers for watchdogs FCA and PRA as UK moves away from EU rules : The City’s main regulators, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), will be given new powers to set rules as the UK moves away from the EU framework after Brexit, according to Government proposals. View Article
Reuters:Getting balance right on UK euro clearing may take years, says EU official : "The City of London is a global financial centre we will always want to use because it is next door, it's convenient. The issue here is one of balance," John Berrigan, head of the commission's financial services unit, told an event held by Brussels think tank CEPS. View Article
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