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We have revised our approach to focus on the big themes for the next legislative period. We are targeting the interaction of the driving forces of politics and economics as they force the required changes in over-arching financial regulation. Details of these services are here
I have just published a new paper "The Huge Opportunity for the “Remain Party”:150-200 Seat Majority: the Message from 100 Years of First-Past-the-Post Elections" This is the prize for what I call a`collective' of Remain-supporting candidates.
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Apologies for the length of this first e-mail of the season… much has happened in the 'holidays'.
Articles from 5 July 2019 - 06 September 2019
General Policy
Financial services: Commission sets out its equivalence policy with non-EU countries : The Commission took stock of its overall approach to equivalence in the area of financial services. The Communication also sets out how recent updates to EU legislation will ensure even greater effectiveness of the EU single rulebook, supervision and monitoring. View Article
Banking Union
ESAs publish recommendations on the supervision of retail financial services provided across borders : In this report, the ESAs identified the main issues that national competent authorities (NCAs) face when supervising financial institutions that provide cross-border retail financial services within the EU and make recommendations to both NCAs and EU institutions on how to address them. View Article
EBA publishes its roadmap on IFRS 9 deliverables and launches IFRS 9 benchmarking exercise : The EBA published its IFRS 9 roadmap providing a comprehensive overview of planned monitoring activities on IFRS 9 implementation and an IFRS 9 benchmarking exercise on a sample of institutions aimed at analysing the different modelling practices followed by institutions and how IFRS 9 implementation impacts the amount of expected credit losses in terms of own funds and regulatory ratios. View Article
EBA advises the European Commission on the implementation of the final Basel III framework : The EBA published its advice on the implementation of Basel III in the EU, which includes a quantitative analysis of the estimated impact based on data from 189 banks, and a set of policy recommendations. This work responds to a Commission call for advice. View Article
ECB revises supervisory expectations for prudential provisioning for new non-performing loans to account for new EU regulation : The ECB has decided to revise its supervisory expectations for prudential provisioning of new non-performing exposures (NPEs) specified in the “Addendum to the ECB Guidance to banks on non-performing loans”. View Article
ECB finalises guide to harmonise rules on banks’ internal models : The European Central Bank (ECB) publishes the final chapters of its guide to internal models, following a public consultation which ended on 7 November 2018. View Article
Anti-Money Laundering
European Commission: Report assessing recent alleged money-laundering cases involving EU credit institutions : The aim of this report is to indicate the shortcomings and lessons learnt and to provide evidence with a view to informing any further policy actions, should they be considered necessary. View Article
Capital Markets Union
ICMA publishes briefing on the importance of integrated capital markets and CMU : The paper encompasses some high-level observations on the incremental complexity introduced by Brexit and the importance of making progress to fulfil the objectives of CMU in a way which allows the EU to achieve better outcomes in a highly competitive global environment. View Article
AFME: Finance for Europe – Building competitive, resilient and integrated financial markets : AFME suggests that the EU should prioritise a growth strategy that focuses on promoting competitiveness, innovation and deeper integration while transitioning to a greener economy. View Article
CER: The Capital Markets Union: Should the EU shut out The City of London? : Brexit probably ends the prospect of the development of a global-scale capital market within the EU, state Jonathan Faull and Simon Gleeson. This raises a fundamental question for the Union: how integrated into global capital markets does the EU want its domestic capital markets to be? View Article
Economic Policies Impacting EU Finance
City AM: German economy shrinks in second quarter as exports slump : Germany’s economy shrank in the second quarter of the year as weak global demand caused exports from the former powerhouse of Europe to drop off, official data showed. View Article
EU27 Politics
POLITICO: EU officials float €100bn boost for European companies : The proposal for a so-called European Future Fund appears in an unusually radical raft of plans that European Commission officials want to put onto the agenda of their president-elect, Ursula von der Leyen. View Article
POLITICO: Von der Leyen looks to overhaul Commission power structure : The plan now under consideration would see the executive's top vice presidents get direct access to Commission staff, which would give them more power to inform and set legislation than now. View Article
Brexit
The Guardian: Boris Johnson asks Queen to suspend parliament : Boris Johnson has set up an extraordinary confrontation with MPs when they return to Westminster next week by announcing that he has asked the Queen to suspend parliament for five weeks from mid-September. View Article
The Guardian: Boris Johnson elected new Tory leader : Boris Johnson will become Britain’s next prime minister after winning a convincing victory over Jeremy Hunt in the Conservative party leadership race. View Article
The Guardian: Brussels greets Boris Johnson victory by rejecting Brexit plans : Boris Johnson’s election as Conservative leader has been greeted in Brussels with a rejection of the incoming British prime minister’s Brexit demands and an ominous warning by the newly appointed European commission president about the “challenging times ahead”. View Article
Financial Times: Brexit turmoil deters top candidates for BoE governor’s job : The political turmoil caused by Brexit has put two of the world’s leading central bankers off applying for the Bank of England governorship, according to two people close to the appointment process. View Article
The Guardian: Brussels to offer Boris Johnson extension on no-deal Brexit : Brussels is preparing to offer Boris Johnson a no-deal Brexit extension beyond 31 October in an attempt to help him keep the Conservative party together and provide one more chance to strike an agreement deal. View Article
The Guardian: Ursula von der Leyen: hard Brexit would be massive blow for both sides : The European commission’s new president has said a hard Brexit would have “massively negative consequences” for both Britain and the EU, and said Brussels could provide emergency help for nations such as Ireland that bear the brunt of such an outcome. View Article
CBI: Neither UK nor EU ready for no deal, contingency planning study finds : A new report from UK’s biggest business group puts forward 200 recommendations to help accelerate no deal preparations for UK, EU and companies. View Article
The Guardian: Boris Johnson has no intention of renegotiating Brexit deal, EU told : Boris Johnson has no intention of renegotiating the withdrawal agreement and a no-deal Brexit is his “central scenario”, European diplomats have been told, amid hardening evidence in Westminster that the government is expecting to crash out of the EU. View Article
The Guardian: Brexit will happen on 31 October 'whatever the circumstances' - No 10 : Brexit will take place on 31 October “whatever the circumstances”, Downing Street has said, refusing to say whether Boris Johnson would regard a vote in parliament against a no-deal departure as sufficient reason to change course. View Article
The Guardian: UK less able to cope with hard Brexit than it was in spring, say officials : The UK is currently less able to cope with a hard Brexit than it was in the spring, with the real risk of panic-buying in the run-up to Christmas and civil disorder if the country leaves the EU without a deal on 31 October, an official document reveals. View Article
Bloomberg: Brexit talks get more hostile as EU considers sweeteners to deal : A meeting of chief Brexit negotiators last week was one of the most difficult encounters of the last three years, according to European officials, who are bracing for talks to become more hostile under the next British government. View Article
BBC: Philip Hammond warns UK will lose control in no-deal scenario : Philip Hammond has warned the UK will not be able to control key elements of a no-deal Brexit. View Article
BBC: Michel Barnier says UK 'will have to face consequences' in event of no deal : The UK will have to "face the consequences" if it opts to leave without a deal, the EU's chief Brexit negotiator has said. View Article
Paul Goldschmidt: “Brexit”: “No deal is now practically unavoidable : Recent declarations by both European and British politicians alike, make a “no deal” Brexit outcome more and more likely, whether it comes about by default, following the absence of a request to extend the UK’s membership, or by a refusal of the EU to grant such a request, laments Goldschmidt. View Article
BBC: Labour to back Remain as it calls for a new EU referendum : Jeremy Corbyn has challenged the next Tory leader to hold another referendum before taking Britain out of the EU, saying Labour will campaign for Remain. View Article
The Guardian: Ursula von der Leyen signals she will not reopen Brexit talks : Ursula von der Leyen, the nominee to lead the European commission, has signalled she will not reopen Brexit talks with the next British prime minister and stressed the “precious” Irish backstop must be defended. View Article
The Guardian: Boris Johnson to seek election after rebel Tories deliver Commons defeat : Boris Johnson has announced that he will ask parliament to support plans for a snap October general election after suffering a humiliating defeat in his first House of Commons vote as prime minister. View Article
UK in a Changing Europe: No deal will lead to prolonged and severe political and economic uncertainty : No deal will not “get Brexit done” rather, it will usher in a period of prolonged uncertainty for citizens, workers and businesses, which is unlikely to be resolved anytime soon, a new report by academic think tank The UK in a Changing Europe reveals. View Article
POLITICO: Boris Johnson loses control : More than 20 of the British prime minister’s own MPs voted against him in a bid to prevent a no-deal Brexit. View Article
Financial Times: EU signals it is open to Brexit extension — if UK asks for one : Europe is leaving the door open to a third extension to Britain’s EU membership after Boris Johnson’s defeat in the House of Commons raised the possibility that the UK will need to seek a further delay to its exit. View Article
UK Economics - Brexit effects
BBC: No-deal recession less severe now, says central bank boss : A no-deal exit from the EU would probably see the economy shrink by less than previously estimated, Bank of England Governor Mark Carney has said. View Article
UCL European Institute: Brexit could cause major disruption to EU-UK data flows : UK businesses could be in for a huge headache if the government fails to secure an agreement on data flows between the EU and the UK post-Brexit, according to a new report published by UCL European Institute. View Article
The Guardian: Brexit: EU ‘would block trade deal if Britain reneged on bill’ : The European Union would refuse to negotiate a trade deal with the UK if the government reneged on the Brexit bill, EU sources have said. View Article
The Guardian: UK falls to bottom of G7 growth league in second quarter : The UK has fallen to the bottom of the G7 growth league table after Brexit uncertainty held the economy back in the spring. View Article
BBC: UK economy returns to growth but slowdown fears persist : The UK economy returned to growth in May after shrinking in April, but the news failed to allay fears of a future slowdown. View Article
The Guardian: Britain ‘facing highest risk of recession since 2007’ : Britain is facing the highest risk of a recession since the financial crisis and needs urgent plans to combat the next downturn, according to an alarming assessment of the nation’s economic health. View Article
The Guardian: Bank of England warns no-deal Brexit could trigger economic shock : The Bank of England has warned that a no-deal Brexit could trigger a material shock to the UK economy while causing widespread disruption for EU companies by cutting them off from London-based banks. View Article
The Guardian: No-deal Brexit would plunge Britain into a recession, says OBR : A no-deal Brexit would plunge Britain into a recession that would shrink the economy by 2%, push unemployment above 5% and send house prices tumbling by around 10%, according to the government’s independent forecasting body. View Article
Bloomberg: Brexit may have already triggered UK recession, Niesr says : The UK’s planned exit from the European Union may have already pushed the UK into a technical recession, according to the National Institute of Economic and Social Research. View Article
Financial Times: No-deal Brexit poses threat to world economy, IMF warns : A no-deal Brexit ranks alongside US trade policy as one of the chief threats to the world economy, according to the IMF’s latest assessment of the outlook for global growth. View Article
Bloomberg: UK economy probably shrank for first time in seven years : The UK economy probably shrank for the first time since 2012 in the second quarter, according to Bloomberg’s latest survey of economists. View Article
House of Commons: A ‘No deal’ Brexit would be the most economically damaging outcome for UK business : The Committee on Exiting the EU warns that a ‘no deal’ Brexit would lead to severe disruption, pose a fundamental risk to the competitiveness of key sectors of the UK’s economy and put many jobs and livelihoods at risk. View Article
Opinion Polling
The Guardian: Boris Johnson has support of two thirds of Tory voters for leadership, says poll : Tory voters now back Boris Johnson over Jeremy Hunt to be the next Conservative party leader and prime minister by a margin of almost two to one, according to a new Opinium/Observer poll. View Article
YouGov: Boris Johnson holds his 48 point lead in the Conservative leadership election : With ballot papers landing on doormats this weekend, the latest YouGov/Times poll of Conservative party members shows Boris Johnson is still heading for a landslide victory in the ongoing leadership election. View Article
The Independent: Public would prefer to cancel Brexit or hold second referendum than Halloween no-deal, poll shows : The public would rather scrap Brexit or hold a second referendum than face a chaotic no-deal at Halloween if the new prime minister cannot strike a fresh agreement, a poll has found. View Article
Financial market developments
The Irish Times: Brexit banking exodus creates a dilemma for Dublin : Europe’s financial centre is splitting up. Dublin has gained a lot of new business from London’s exodus, becoming the top choice of firms seeking higher ground post-Brexit. Now Ireland must decide whether it wants to be a leader or a counterweight in Europe’s financial future. View Article
Financial Times: French financial regulator wants more flexible market rules : France’s top financial regulator is calling for more flexibility around how European countries implement market rules as Paris pushes to replace the UK as the predominant voice in EU decision-making after Brexit. View Article
Bloomberg: There’s no such thing as free access, EU to warn UK on banks : The UK should expect a “rigorous” assessment of its regulations before financial firms will be allowed to do business in the European Union after Brexit, according to a draft document to be presented by officials in Brussels later this month. View Article
AFME publishes list of remaining no-deal Brexit risks : AFME published a short briefing paper outlining remaining risks for the financial services sector in the event of a no-deal Brexit. View Article
New Europe: The Swiss expect ‘no deal’ with the EU before 2020 : Switzerland is unlikely to sign its own trade agreement with the EU prior to Brexit, according to Economy Minister Guy Parmelin. View Article
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