Friends 'Weekly' Newsletter

06 October 2016

Collateral eligibility criteria, NPLs, bank capital rules, non-cleared OTC derivative transactions, shadow banking, AIFMD, UCITS, Brexit, IMF and more.

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International/G20 Friends' Services Political
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  Articles from 29 September 2016 - 06 October 2016

  Banking
 
 
ECB: Changes to collateral eligibility criteria and risk control measures for unsecured bank bonds
The European Central Bank decided on changes to the collateral eligibility criteria and risk control measures applicable to senior unsecured debt instruments issued by credit institutions or investment firms or their closely linked entities, known as unsecured bank bonds (UBBs).
EBA updated Risk Dashboard shows that low profitability and the high level of NPLs remain a concern for EU banks
This EBA‘s report summarises the main risks and vulnerabilities in the banking sector by the evolution of a set of Risk Indicators (RI) across the EU in Q2 2016. The update shows an increase in EU banks' capital ratios, while the low profitability and the high level of NPLs remain a concern.
Financial Times: Brussels ready to push back on bank capital rules
Europe’s financial regulation chief Valdis Dombrovskis has warned he is prepared to reject international plans to toughen bank capital requirements in a sign of the growing rift with the US over how to prevent another financial crisis.
EBA publishes final Guidelines on implicit support for securitisation transactions
These Guidelines clarify what constitutes arm's length conditions and specify when a transaction is not structured to provide support for securitisations. The Guidelines will contribute towards the successful implementation of the Commission's securitisation package under the CMU reform.
 
  Securities
 
 
Commission adopts new rules to mitigate risks in non-cleared OTC derivative transactions
Commission adopted a new set of rules, which sets out the levels and types of collateral that OTC derivatives counterparties must exchange bilaterally if the transaction is not cleared through a CCP.
ESMA consults on requirements for the management of trading venues and reporting services providers
ESMA issued a consultation paper on draft guidelines which will further detail the implementation of the Market in Financial Instruments Directive.
ESMA reports on shadow banking, leverage and pro-cyclicality
ESMA’s report assesses whether the use of SFTs leads to the build-up of leverage which is not yet addressed by existing regulation, how to tackle such buildup, and whether there is a need to take further measures to reduce its pro-cyclicality.
ESMA consults on future reporting rules for securities financing transactions
ESMA issued a consultation paper on draft technical standards implementing the Securities Financing Transaction Regulation, which aims to increase the transparency of shadow banking activities.
 
  Asset Management
 
 
ALFI response to ESMA Call for evidence on asset segregation and custody services under AIFMD and UCITS
ALFI responded to the Call for evidence on asset segregation and custody services issued by the European Securities and Markets Authority in July this year.
 
  International/G20
 
 
IMF sees subdued global growth, warns economic stagnation could fuel protectionist calls
Global economic growth will remain subdued this year following a slowdown in the United States and Britain’s vote to leave the European Union, the IMF said in its October 2016 World Economic Outlook. It forecasts a slight pickup in 2017, driven mainly by emerging market strength.
 
  Friends Services
 
 
PM May to the Conservative Party: Hard Brexit
PM May’s speech to the Conservative Conference: It reads like Hard Brexit; it’s spun as Hard Brexit so it probably is Hard Brexit because it is completely inconsistent with EEA membership. For the avoidance of any doubt, this inconsistency was repeated four times!
 
  Political
 
 
Financial News: Bank of England deputy governor says uncertainty will hit investment
The impact of Brexit on the UK economy has been “more moderate” than the Bank of England originally feared. Ben Broadbent, the deputy governor for monetary policy has told an audience at The Wall Street Journal.
TheCityUK:The impact of the UK's exit from the EU on the UK-based financial services sector
A report published today by global management consultancy, Oliver Wyman, analyses Brexit’s potential impact on the UK-based financial services sector. Leaving the Single Market could cost up to 50% of EU-related activity, £5BN of tax revenues per annum and put 4,000 jobs at risk.
Bloomberg: Banks to miss out on special favors in May’s Brexit plans
British financial-services companies will get no special favors in Brexit negotiations from Prime Minister Theresa May, who wants to change the relationship between the government and the City of London.
CER: Why the 27 are taking a hard line on Brexit
Britain’s partners have forged a common response to the forthcoming Brexit talks. Given their tough line – refusing ‘pre-negotiations’ and insisting that Britain cannot have the single market without free movement – how should Theresa May’s government respond?
BBC: Theresa May to trigger Article 50 by end of March
The UK will begin the formal Brexit negotiation process by the end of March 2017, PM Theresa May has said.
 

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