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This week in "Brussels"

26 March 2009

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Financial Services Policy	Banking	Securities	Insurance
Corporate Governance	Edited Minutes of key legislative Bodies	Competition issues in financial Services
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Articles from 19 March 2009 - 26 March 2009

Financial Services Policy

McCreevy calls on member states to press for supervisory reform
In the past, member states’ home supervisors resisted “ceding anything with an eye to protecting their own empires”, McCreevy criticised and announced several proposals on supervision, the Basel II Accord, and renumeration. View Article

European Council Conclusions 19-20 March
Council agreed the de Larosière report as "the" basis for action and will adopt first decisions by June 2009. Council also agreed to give priority to restoring the functioning of credit markets. View Article

CFTC concept release on review of exemptions for swap dealers
The concept release aimed at bringing greater transparency and accountability to the derivatives marketplace. It reviews the underlying statutory and regulatory background, as well as the regulatory history and relevant marketplace developments. View Article

Banking

Czech Presidency reaches agreement on cross-border payments
The new Regulation extends the principle of equal charges to direct debit forms of payment. It also sets out clear rules for charging MIF and establishes the mandatory availability of payment accounts for direct debit payments across the EU. View Article

Czech Presidency reaches agreement on e-money Directive
The compromise text was agreed between the EU Council and the European Parliament. EP should officially approve the proposal during its plenary session in the second half of April. The EU Council will formally confirm it in May. View Article

Commission - ECB statement calls to eliminate SDD interchange fee
The statement makes clear that a multi-lateral interchange fee for direct debit transactions does not seem justified for efficiency reasons and therefore does not appear compatible with EU anti-trust rules. View Article

CEPS study calls to scrap Basle II rules
“Our main advice on banking capital requirements is to scrap Basle II rules and replace them with flat capital requirement”, the authors say. “The maximum permitted leverage ratio should never again be allowed to exceed a ceiling of ten. View Article

CEBS outcome on follow-up review of banks' transparency
Especially for the qualitative disclosures - on business models and risk management – there is still room for improvement, CEBS found and considers stronger policy measures if the forthcoming annual and Pillar 3 reports will not be satisfactory. View Article

Securities

AMF report on short-selling rules
The report notes that it appears neither justified nor appropriate to propose prohibition of all forms of short-selling. However, short-selling requires a minimum of regulatory constraint to deter behaviours that hinder orderly functioning of the market. View Article

IOSCO consults on regulatory approach to short-selling
The report proposes common principles for a more consistent regulatory regime for short-selling, including a reporting regime to give markets timely information. Short-selling should operate in a well-structured regulatory framework, IOSCO states. View Article

Measures adopted by CESR Members on short selling
CESR updated the list of measures of EU securities regulators with regard to short-selling. The paper includes statements or links to the statements published by CESR Members explaining the measures taken. View Article

CESR assessment on Lehman Brothers default
The principal cause of the Lehman demise was market concerns about the capital adequacy of the firm rather than liquidity, CESR notes. The case illustrates regulatory challenges that already existed and are not specific or exclusive to Lehman Brothers. View Article

Insurance

CEA disappointed over Commission BER proposal
The CEA disagrees with the Commission’s proposal not to renew the sections of the BER in two areas. In both areas, the Commission proposes issuing guidance rather than renewing the BER. View Article

Commission report on renewal of Insurance Block Exemption Regulation
The report considers that two forms of co-operation specific to the insurance sector, namely agreements in relation to joint calculations and to insurance pools, should continue to benefit from a block exemption. View Article

Corporate Governance

European Corporate Governance Forum sets out best practices for directors' pay
The Forum suggests a directive as appropriate to ensure that listed companies disclose the remuneration policy and pay of individual directors. Rules should distinguish between executive pay in listed companies and the financial services sector. View Article

OECD consults on corporate governance and the financial crisis
The consultation provides input to a set of recommendations relating to the Principles of Corporate Governance in the light of the financial crisis that the OECD will issue later this year. It will identify the most urgent areas for reform. View Article

IASB and FASB announce further steps in response to global financial crisis
The boards agreed to work jointly towards common standards that deal with off balance sheet activity and the accounting for financial instruments. They will also work towards analysing loan loss accounting within the financial instruments project. View Article

CESR comments on IASB ED on consolidated financial statements
CESR would support a single consolidation principle and understands that the draft proposes a control-based model that implicitly incorporates some elements of the risks and rewards approach. However, CESR would prefer this incorporation to be explicit. View Article

EFRAG draft comment letter on FCAG’s request for input
The information needs of capital market participants are not the same as those of prudential regulators, EFRAG says. It is of fundamental importance that those different information needs mean different financial reporting objectives. View Article

IASB and FASB consult on a future standard on lease accounting
The Boards propose that lease accounting should be based on the principle that all leases give rise to liabilities for future rental payments and assets that should be recognised in an entity’s statement of financial position. View Article

EFRAG discussion paper on Performance Reporting
The discussion paper explores some key performance reporting issues that are of fundamental importance and are not covered in the IASB/FASB project on Financial Statement Presentation. View Article

Edited Minutes of key legislative Bodies

ECON meeting 23 March
ECON calls for CESR to become the only registration and supervisory body over European rating agencies. CESR should be charged with registering CRAs, checking compliance with rules and withdrawing registration should rules be breached. View Article

EP Plenary meeting 23-26 March
Gordon Brown called for ‘a new consensus for our times’. "Let us be honest with each other: our global economic system has not just developed but been distorted in ways that run contrary to the values we celebrate", he said. View Article

Competition issues in financial Services

Commission authorises UK working capital guarantee scheme
The Commission approved the UK scheme that will offer banks up to £10 billion of guarantees in respect of portfolios of working capital loans to sound, credit-worthy companies. View Article

Commission authorises amendment to French scheme to inject capital into certain credit institutions
Commission approved the amendment to inject capital into credit institutions which relates to the terms governing the remuneration and reimbursement of the preference shares issued by beneficiary banks in return for recapitalisation by the State View Article

This week in "Brussels"

26 March 2009

© Graham Bishop