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Welcome to our Gold Friends weekly e-mail.Highlights of my Week: UvL’s State of the Union message to the European Parliament focussed on the obvious topics of Ukraine, energy, climate and the economy but many proposals actually reflected recommendations from CoFE. Importantly, she committed the Commission to supporting Parliament’s call for a Convention to be summoned to include Treaty reform in its considerations. But the background is menacing as the ESAs warned of rising risks, BERTTER FINANCE calculated low interest rates have cost consumers more than €1 trillion via financial repression and Dombrovskis reported ECOFIN’s first goal is debt sustainability. Consumer Credit Directive reform drew comments from BEUC and Insurance Europe, while the EBF supported the `DEBRA’ proposal to improve the tax-induced debt/equity bias. Accountancy Europe published a poll that ought to be shocking – nearly 2/3 of people believe that government leaders are deliberately trying to mislead the people by falsehood or exaggeration. Living in the UK, one asks why even a third of people would believe the word of a government led by Boris Johnson and/or his acolytes! The abrupt sacking of Tom Scholar from the Treasury underlines the Federal Trust’s headline “Liz Truss gambles with the UK’s future” just as Barry Eichengreen reminds us that Black Wednesday was exactly 30 years ago! Graham Bishop
Articles from 9-15 September 2020
Policy impacting Finance
European Commission's von der Leyen: State of the Union 2022 : She outlined flagship initiatives which the Commission plans to undertake in the coming year. Many of them are made in response to recommendations citizens made through the Conference on the Future of Europe. View Article
State of the EU: Ukraine, energy, climate change, economy : In the annual State of the European Union debate, MEPs quizzed President von der Leyen on the Commission’s work in the past year and its upcoming plans. View Article
EURACTIV: Von der Leyen: Treaty change needed to show EU is ‘serious’ on reform : “if we are serious about a larger EU, we must also be serious about reforming it. So as this Parliament has called for (treaty change), I believe the moment has arrived for a European Convention.” View Article
EPC: Von der Leyen makes big promises, but will they be enough? : In her State of the Union (SOTEU) speech, President von der Leyen reaffirmed the EU's continued strong support for Ukraine and its people. The war and its aftershocks - skyrocketing energy prices and inflation - took up most of her speaking time. View Article
Bruegel podcast: Assessing the State of the Union 2022 : Ursula von der Leyen, President of the European Commission, delivered the State of the Union address before the European Parliament. View ArticleCEPS: In this State of the Union, President von der Leyen must say it loud and clear – business as usual is over : It marks the start of the EU’s political year, her fourth as President of the European Commission, and her last full year before the 2024 European Parliament elections, the outcome of which will decide if she can stay on for another term. View Article
ECA: The Commission’s assessment of national recovery and resilience plans – Overall appropriate but implementation risks remain : We examined the Commission’s assessment of these national plans and found that it was overall appropriate given the complexity of the process and the time constraints. View Article
ECON: National recovery plans to counter immediate effects of energy crisis : View Article
BETTER FINANCE: Financial Repression | Low ECB Interest Rates & Inflation = Loss of €1 Trillion in Purchasing Power in 202 : Financial Repression or Debt Relief through Inflation | Since the financial crises of 2008 and 2009, ‘Financial Repression’ has been the only game in town. View Article
ESAs warn of rising risks amid a deteriorating economic outlook : The report highlights that the deteriorating economic outlook, high inflation and rising energy prices have increased vulnerabilities across the financial sectors. The ESAs advise national supervisors, financial institutions and market participants to prepare for challenges ahead. View Article
Commissioner Gentiloni at the Eurogroup Press Conference of 9 September 2022 : Two keywords: one is uncertainty and the other one is cooperation...Digital euro: The Commission will continue to discuss these issues with Member States and the ECB as we work to prepare a balanced legislative proposal for 2023. View Article
Executive Vice-President Dombrovskis at the ECOFIN Press conference : Today we had a rich discussion on the future of fiscal rules...Our first goal remains ensuring public debt sustainability. This will require fiscal adjustment, reforms as well as investments. View Article
Banking Union Consumer Credit Directive: BEUC recommendations for trilogue : When shopping online, buying a new phone, or leasing a car, consumer credit is today only a click away. When affordable, credit can allow for investments in higher education, an electric car or a more energy efficient household appliance. View Article
Insurance Europe: Consumer Credit Directive: Including right to be forgotten for persons with prior diagnosis would be bad for consumers : To avoid unforeseen negative consequences for consumers, the implementation of any RTBF at EU level should be via a flexible code of conduct. View Article
Eurofi Article by Elke König - Banking Union: CMDI can build further on solid ground : In less than a decade, we have made significant steps with the first pillar of the Banking Union, the Single Supervisory Mechanism (SSM) established high supervisory standards right across the Banking Union, and enhanced the banks’ positions. View Article
SSM: Borsen Interview with Kerstin af Jochnick, Member of the Supervisory Board of the ECB, conducted by David Bentow : We challenge banks to ensure that they have a sufficient overview, and understanding, of all their risks. This applies to credit risk, of course, but also to other risk areas. View Article
FSB seeks feedback on first experiences with the Framework for information from FMI intermediaries : The Framework aims to help FMI intermediaries better understand which information clients and their resolution authorities may need from them in the run-up to, and during, a firm’s resolution. View Article
GBIC Comments on RTS on groups of connected clients : GBIC is commenting EBA’s draft RTS on groups of connected clients. GBIC points out that there should be no additional requirements compared to the EBA guideline on groups of connected clients. View Article
Capital Markets Union EBF position on the DEBRA proposal : The EBF agrees with the over-arching principle of mitigating the tax induced debt-equity bias in corporate investment decisions to render financing more accessible to EU business and to promote the integration of national capital markets into a genuine single market. View Article
Insurance Europe: EU supervision of third-party litigation funding sector could benefit both claimants and defendants : Today the European Parliament plenary session adopted MEP Axel Voss’ own initiative legislative report on responsible third-party litigation funding (TPLF). The report calls on the European Commission to propose solutions for the effective supervision of TPLF in commercial and civil disputes. View Article
EFAMA: High-level response to ESMA consultation on notifications for cross-border marketing and management of AIFs and UCITS : EFAMA welcomes the European Securities and Market Authority’s continuous commitment to creating a single market for investment funds, confirmed by the draft regulatory standards currently under consideration. View Article
ALFI responds to the ESMA consultation on draft technical standards on the notifications for cross-border marketing and management of AIFs a : ALFI understands and appreciates ESMA’s intention to achieve alignment between UCITS and AIF documentation, because this usually facilitates both filings and checks by regulators. View Article
CPMI and IOSCO publish a report on access to central clearing and portability : CPMI and IOSCO report considers the benefits and challenges of new access models to central counterparty (CCP) clearing and client-position portability. View Article
Environmental, Social, Governance (ESG) UN EP FI: 500-plus institutional investors urge governments to step-up climate ambition : Investor groups publicly released a statement signed by 532 institutional investors with US$39 trillion in assets under management (AUM), advocating for governments to enact ambitious policies that would leverage the private capital required to effectively address the climate crisis. View Article
InsuranceEurope:Draft minimum safeguards for EU Taxonomy welcomed; rules must align with other upcoming sustainability reporting legislation : View Article
Protecting Customers Accountancy Europe's Gisby: Accountants and ethics: promoting trust in the public sector : Nearly two-thirds of those polled in the Edelman Trust Barometer 2022 believed that government leaders are deliberately trying to mislead people by making falsehoods or exaggerations. This decline of trust in government is alarming and rebuilding it is urgent. View Article
Fin Tech Regulation BIS: Cyber risk in central banking : Only a few central banks fully agree that the financial sector is adequately prepared for cyber attacks, and over half of the respondents think that the sector's investment in cyber security has been inadequate over the past year. View Article
CEPS: The AI Act and emerging EU digital acquis - Overlaps, gaps and inconsistencies : An agreement seems possible by mid-2023, but this will depend on whether the co-legislators converge on key issues such as the definition of AI, the risk classification and associated regulatory remedies, governance arrangements and enforcement rules. View Article
Reuters: Ethereum blockchain says slashing energy use with software overhaul : The new system will use 99.95% less energy, according to the Ethereum Foundation. To its proponents, the upgrade represents a major advantage as Ethereum seeks to surpass rival blockchain bitcoin. View Article
Economic Policies Impacting EU Finance OECD/G20 BEPS Progress Report welcomed; GFIA calls for refinements : GFIA has published its response to a consultation by the OECD and G20 on their Base Erosion and Profit Shifting (BEPS) Progress Report on Amount A of Pillar One, which the federation welcomes. View Article
Brexit and the City FT: Former Sky executive picked to lead City reforms : Boris Johnson ally Andrew Griffith chosen to lead overhaul of financial services regulation under Truss government View Article
CITY AM: bankers’ bonus cap could be scrapped by Kwasi Kwarteng : The cap, which was brought in as part of EU-wide efforts after the financial crisis, has long been criticised as an anti-competitive stranglehold on the capital’s competitiveness. View Article
Brexit Federal Trust's Stevens: VIDEO: Liz Truss Gambles with the UK’s Future : The new British Prime Minister, Liz Truss, is taking a dangerous gamble with the economic future of the United Kingdom, particularly in the context of the ongoing Brexit crisis. View Article
Project Syndicate's Eichengreen: The Long Shadow of Black Wednesday : When the United Kingdom was forced to abandon the European Monetary System's exchange rate mechanism 30 years ago, British officials took it as a happy consequence that the UK would not qualify for the euro. View Article
CEPR's Portes: Trade, migration, and Brexit : CEPR eBook reported new academic research on the economic impacts of Brexit, particularly on trade and migration. This column explores ... emerging findings are consistent with economists’ pre-Brexit predictions; and what possible explanations there are for the divergences observed so far. View Article
UK TPO's Gasiorek: New Government, new trade policy? : The UK chose to leave the EU in 2016; and subsequently, from a trade policy perspective, negotiated a fairly hard Brexit – think of this as a major trade policy reversal which has served to raise costs between the UK and its principal trading partner, the EU. View Article
UK and EU's Rutter: Sacking Tom Scholar - a move that undermines the Treasury, the civil service and the government? Three significant civil service changes were made in the immediate wake of Liz Truss’s ascent to the premiership...Kwarteng may think he has stamped his authority on HMT. But he may find instead that he has made his already hard task even harder. View Article
CER - Hilary Benn: How to fix the Northern Ireland Protocol : The UK government’s current approach to resolving the problems with the Northern Ireland Protocol has been counterproductive and has further undermined trust...Compromises are achievable. View Article
Robert Schuman Fondation's Giuliani: A new United Kingdom? : The pomp and circumstance surrounding the tributes to the Queen must not mask or delude us, but the United Kingdom is perfectly able to offer us a new face. View Article
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