Friends 'Weekly' Newsletter

10 November 2016

Basel III, counterparty and market risk frameworks, CPMI, MIFID II, securitisation, CMU, DLT, High Court ruling on Article 50, Bank of England, Donald Trump, Cyprus and more.

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  Articles from 03 November 2016 - 10 November 2016

  Banking
 
 
BIS: Adding it all up: the macroeconomic impact of Basel III and outstanding reform issues
This paper presents a simple conceptual framework to assess the macroeconomic impact of the core Basel III reforms, including the leverage ratio surcharge that is being considered for global systemically important banks (G-SIBs).
EBA issues recommendations on the implementation of new counterparty and market risk frameworks
The EBA published a Report in response to a new standardised framework for counterparty risk (CCR), i.e. the so-called SA-CCR, and a new market risk (MKR) framework - the so-called fundamental review of the trading book (FRTB).
EBA seeks views on new prudential regime for investment firms
The EBA launched a consultation in response to the European Commission's call for technical advice on the design of a new prudential regime for investment firms, which is specifically tailored to the needs of investment firms' different business models and inherent risks.
New Bank of England rules bring UK closer to ending taxpayer bailouts
This PRA's Policy Statement provides feedback on responses to Consultation Paper ‘The minimum requirement for own funds and eligible liabilities (MREL) – buffers and Threshold Conditions’ and sets out the final SS on the relationship between MREL and buffers, and MREL and Threshold Conditions.
CPMI: Central banks are monitoring and fostering the development of fast payment services
The development and importance of fast payments services are the focus of a new report by the Committee on Payments and Market Infrastructures (CPMI).
 
  Securities
 
 
ESMA prepares for MIFID II Systematic Internaliser regime
ESMA published an updated Q&A document on the application of MiFID II/ MiFIR which clarifies when ESMA will publish the first set of data needed to implement the Systematic Internaliser regime and the date by when firms must comply with the SI regime for the first time.
CEPS: Towards a better European securitisation market
In this ECMI Commentary, Apostolos Thomadakis finds that measures introduced by European authorities in an effort to revive securitisation and channel funds to the real economy have not achieved the expected results and calls for more to be done.
 
  Financial Services Policy
 
 
ESMA's Maijoor speaks at the European Commission’s Hearing on the Review of the EU macro-prudential framework
ESMA Chair speech focused on extending the macro-prudential framework to non-banking, especially in light of the CMU project.
 
  Friends Services
 
 
124th Brussels for Breakfast – Notes
Organised by the Centre for the Study of Financial Innovation (CSFI), hosted by Grant Thornton with co-presenter Nicolas Veron (Bruegel and Petersen Institute)
DLT: technically and legally feasible?
DLT may not be in use for systemically important financial functions for a couple of decades, so well beyond the Brexiteers timetable for retaining “clearing” in the UK by applying DLT, rather than using ECB-issued euros.
 
  Political
 
 
Statement by President Donald Tusk on the outcome of the Presidential elections in the United States
The European Council President congratulated the new US President Donald Trump but warned against the "new challenges that these results bring."
Financial Times: City of London lobby group wants ‘no change’ Brexit deal
TheCityUK Manduca’s stance is at odds with government’s starting point of leaving single market.
Institute for Fiscal Studies: Winter is Coming: the outlook for the public finances in the 2016 Autumn Statement
As the new Chancellor prepares for his first fiscal statement this briefing note looks at how significant a public finance challenge he faces.
Financial Times: Theresa May looks to reveal more Brexit detail within weeks
Theresa May is likely to announce details of her Brexit plans for financial services and other key sectors of the UK economy within weeks, to reassure business leaders and MPs that her EU exit strategy is taking shape.
House of Commons: Statement on Article 50
Secretary of State for Exiting the EU, David Davis, made a statement in the House of Commons on the process for invoking Article 50.
Remarks by J.Dijsselbloem following the Eurogroup meeting
The Eurogroup President gave a brief account of the main issues discussed: banking union, Cyprus and Spain, national insolvency frameworks, Greece and draft budgetary plans.
Financial Times: EU reconsiders financial market access rules
Senior European officials are re-examining existing equivalence rules to strengthen them in what would be considered a blow to post-Brexit City and US firms.
Joergen Oerstroem Moeller: How Brexit could poison the British political agenda for years
After the High Court ruling that the Parliament must approve a British exit from the EU, Brexit confronts PM Theresa May with six front lines: The Tory Party, the Parliament, the British public, Scotland, Northern Ireland, the World Trade Organization, and the European Union.
Financial Times: City should welcome escape from burden of EU rules, says report
Rather than fearing disruption from Brexit the City should welcome the chance to escape the burden of “excessive” EU rules, according to Barney Reynolds, head of financial services at Shearman & Sterling law firm.
Financial Times: High Court delivers blow to UK’s Brexit plans
The UK government’s plans for Brexit have been dealt a blow by a landmark High Court ruling that the Article 50 divorce process for leaving the EU requires a vote by Parliament. The Government said it will appeal against the decision.
City AM: Losing access to the single market and passporting would be "calamitous" for the financial services sector, say MPs
MPs discussed the risks of losing access to EU's single market and passporting rights during a backbench debate on the impact of Brexit on financial services.
Open Europe: What does the Article 50 ruling mean for the Government’s Brexit plans?
Following the Government’s defeat in the High Court over its exclusive right to trigger Article 50, the EU’s exit clause, what could happen next? Stephen Booth assesses the fallout.
BoE's Cunliffe: Challenges for financial markets
Bank of England Deputy Governor for Financial Stability Sir Jon Cunliffe reflected on the factors that have influenced London’s position as a global financial centre and considered some of the implications for European financial markets from the UK exiting the EU.
Financial Times: Brexit ruling and BoE decision send pound surging
The pound soared to a four-week high on Thursday after the High Court ruled the government must seek parliamentary approval for triggering Article 50 and the Bank of England said the post-referendum economy was “notably stronger” than it expected.
Hedgeweek: Cyprus positions itself as post-Brexit partner to UK funds industry
Fund managers have gathered in London to hear from the Cyprus Investment Funds Association (CIFA) about the opportunities in the country as an investment destination.
 
  Economic
 
 
ECB's Praet: Monetary policy and the euro area banking system
Peter Praet, Member of the Executive Board of the ECB, explains that the struggles of banks are not innocuous from a monetary policy perspective given their integral role for monetary policy transmission and macroeconomic performance more generally.
BBA: Banks’ tax contribution climbs to £34.2 billion
A new report – commissioned by the BBA and based on independent PwC analysis – has found that UK banks paid just over half of the total tax contribution at £17.4 billion while foreign banks contributed £16.8 billion (49.1%). This represents a 9.3% increase on the corresponding figure for 2014.
Bank of England: Bank Rate held at 0.25%, government bond purchases at £435bn and corporate bond purchases at up to £10bn
The BoE’s Monetary Policy Committee set monetary policy to meet the 2% inflation target considering data that suggests that the near-term outlook for economic activity in the UK is stronger than expected three months ago.
 

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