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ECON Chair Sharon Bowles comments on proposed European Monetary Fund
Lib Dem MEP Sharon Bowles said that any EMF would, like the IMF, need to be accompanied by strong technical management and could form a useful tool for encouraging better discipline within the Eurozone. Controversy rages as to whether or not Greece will seek a loan from the IMF. View Article

FT: Brussels ready to back Monetary Fund
According to the Financial Times, the EC is willing to swing into action with a plan for a monetary fund to assist highly indebted Eurozone nations. It is unlikely, however, that EU institutions will agree on a structured EMF quickly enough to address the current Greek problem. View Article

EP raises doubts on how EC will make 2020 strategy work
Employment and Social Affairs Committee Chair Pervenche Berès: "It is difficult to look at the 2020 strategy without looking at what is happening now in Greece. During the crisis, the social model was cited as a stabilizing factor. Yet today, Greece is being asked to destabilize its social model". View Article

Darling: pointless to push Iceland too hard
Icelandic voters rejected a deal to repay the money to the UK and the Netherlands. However, Alistair Darling says he is absolutely certain Iceland will pay Britain back for its reimbursement of lost savings in Icesave; the only question remaining is what the conditions will be. View Article

EP discuses Icesave case: MEPs say it should not delay EU accession negotiations
EU Enlargement Commissioner Füle: "The EC takes note of the results of the referendum. This is a matter for the people of Iceland to decide. Icesave is a bilateral issue between Iceland and two member states and opening accession talks with Iceland should start”. View Article

FSA publishes financial risk outlook 2010: new regulations and withdrawal of support
The FSA outlook describes among other issues, the prudential risk management challenges for financial institutions created by the combination of the macroeconomic environment, the changing regulatory regime, and the future withdrawal of funding and liquidity support. View Article

Barroso: the Commission is thinking of alternative ways to help Greece without a bail-out and tackling derivatives
He reiterated that in October 2009 the EC began a programme of action "in favour of efficient, safe and solid derivatives markets." The EC "will examine closely the relevance of banning purely speculative naked sales on CDS of sovereign debt". View Article

ECOFIN Council conclusions on exit strategies from government financial support schemes
The Council called on the Commission to continue its work, in cooperation with the ECB, and finalise its assessment of bank debt guarantees, and in particular on the cost of guaranteed and not-guaranteed funding and on the evolution of market funding in the EU banking sector. View Article

Parliament asks the Commission to develop the transaction tax plan in time to be presented to the G20 meeting in June
The ECON committee presented a resolution on financial transaction tax, which, was voted, and passed in the EP plenary session. The EC was asked to assess how this tax could help stabilize financial markets, by targeting "undesirable" transactions and preventing a similar crisis happening again. View Article

Financial transaction tax debated at EP in Strasbourg
Commissioner Šemeta outlined the EC objectives for the financial transaction tax. The EC must ensure that the initiatives currently being debated would not result in the relocation of financial transactions to other regions, thereby affecting EU competitiveness. View Article

FT: Geithner warns of rift over AIFM regulation
The Financial Times reports that Mr Geithner warns that US hedge funds, private equity groups and banks could be discriminated against if proposals to restrict the access of EU investors to funds based outside the 27-country bloc are included in the final law. View Article

Indian perspective on banking regulation
Deputy Governor of the Reserve Bank of India Usha Thorat summarised the Indian financial services regulatory scenario. He said that its financial system was not seriously affected by the crisis mainly because of the low integration of the domestic financial sector with the global financial system. View Article

CEBS publishes its consultation on draft guidelines on liquidity cost-benefit allocation
The guidelines focus on liquidity cost-benefit allocation mechanisms as an important contribution to the institution’s liquidity management framework to help institutions link their strategic objectives with liquidity resource allocation. View Article

CEBS’ public hearing: summary of its implementation guidelines on capital instruments to meet Basel requirements
In CEBS’s opinion, the guidelines laid down in its implementation on capital instruments give a good interpretation of the CRD provisions. A credit institution that fulfils the CEBS guidelines fulfils in substance Basel requirements for core Tier 1 instruments. View Article

FT: Germany and France called on the European Union to consider banning CDS speculation.
The Financial Times reports that as an alternative to a ban on speculative trading in CDSs they suggest a bar on so-called naked transactions, in which investors buy swaps without holding a direct investment in the underlying debt, and tighter regulation of short-term swaps in the bond markets. View Article

ISDA market review of OTC bilateral collateralization practices
The International Swaps and Derivatives Association has released a study which seeks to reduce the use of debt ratings in collateral requirements for trading OTC derivatives. The aim is to reduce pressure during times of financial distress from downgrades. View Article

ECON Committee: regulating the derivatives market
MEPs argued that the OTC derivatives trade needs to become much more transparent. The risk element should be expressed more clearly within the price of derivatives, and a clear distinction made between their use by companies and financial institutions. View Article

CESR updates assessment of proposals for MiFID pre-trade transparency waivers
CESR review covers “Functionalities that satisfy the criteria contained in MiFID” which have been assessed at CESR level on the basis of the new joint process that was launched in February 2009. View Article

CESR members provide commonly agreed answers to EU credit-rating regulation questions
The FAQ intends to provide market participants with quick and efficient responses. CESR responses do not contain standards, guidelines or recommendations. The questions cover issues such as corporate governance, endorsement regimes and registration processes. View Article

CEA report on why excessive capital requirements harm consumers, insurers and the economy
The Association acknowledged that insurers had failed over months to persuade the Committee of European Insurance and Occupational Pensions Supervisors to modify its capital proposals. CEA's major concern was on the calibration by CEIOPS of non-life risk models. View Article

FSA: update on payment protection insurance reforms
The FSA has revised its original proposals warranting a further short consultation. For example, the wider costs and consumer benefits have altered since the original consultation and the FSA wants to test out the revised financial assumptions with firms. View Article

FSA perspective on corporate governance
At the Building Societies Association Corporate Governance Seminar FSA Director Graeme Ashley-Fenn addressed the effectiveness of corporate governance, how it works in practice and the implications of the Walker review. View Article

IASB and FASB publish proposals on reporting entity concept
The proposals form part of a joint project to develop an improved conceptual framework that provides the basis for developing future accounting standards. The exposure draft proposes what a reporting entity is and when an entity controls another entity.　 View Article

EFRAG's comment letter on IASB ED 'Management Commentary' recommending postponement
EFRAG supports the IASB‘s decision to develop high-level, principle-based, non-mandatory guidance on MC, although the project should not be developed at the moment given other more important IASB‘s priorities. View Article

EU competition policy: time to rethink fines strategy and tackle state aid
The extraordinary amounts of state aid granted recently, albeit necessary, will distort competition, says the EP resolution. It is therefore calling for an independent report on the potentially distortive effects of state intervention in the financial sector. View Article

Paul Goldschmidt: President Trichet, Greece and the Euro
Mr Goldschmidt shares Mr Trichet’s view that the ECB never considered the possibility of a Greek exit from the Eurozone. However, he raises several doubts on the way the ECB has managed the Greek crisis. View Article

Wolfgang Münchau: why the Euro will continue to weaken
In his articles for the Financial Times, Wolfgang Münchau argues that the Euro is going to be weak whichever scenario unfolds. European should be more concerned that some of the world’s smartest investors are betting against the Euro. View Article

CEPS report on adjustment difficulties in “GIPSY” club
GYPSY stands for Greece, Ireland, Portugal, Spain and Italy. CEPS’s key finding is that the adjustment will be particularly difficult for Greece (and Portugal) because they are two relatively closed economies with low savings rates. Both of these countries are facing a solvency problem. View Article

Financial Services Policy	Banking	Securities
Insurance	Asset Management	Corporate Governance/Accounting
Competition: Financial Services	Brief Opinions/Commentaries	Financial stability - policy analysis
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This week in "Brussels" + Podcast

11 March 2010

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