Articles from 30 April - 6 May 2021
General Financial Policy
EP group leaders’ statement on the Conference on the Future of Europe : On Thursday, the leaders of Parliament’s political groups took stock of the ongoing preparatory work on the Conference on the Future of Europe with the co-chair of the Conference’s Executive Board and issued the following statement:
Bruegel: Setting Europe’s economic recovery in motion: a first look at national plans : Plans for spending European Union recovery funds submitted by the four largest EU countries reflect rather different priorities. So far, only Italy is interested in borrowing from the EU.
EURACTIV: Germany, France, Italy, Spain push for implementation of recovery fund : Finance ministers of Germany, France, Italy, and Spain urged member states to submit their recovery plans and pressed the European Commission to speed up the assessment of the investment and reform proposals.
SSM's Enria: Basel III implementation: the last mile is always the hardest : Later this year we expect the European Commission to issue the legislative proposals to implement the final package of the reforms agreed by the Basel Committee on Banking Supervision (BCBS).
Banking Union
SRB issues new guidance on liquidity and funding in resolution : Banks are likely to face liquidity stress in resolution because of the reluctance of market participants to roll-over or provide funding to a bank in crisis.
EBA launches discussion on NPL data templates : The EBA is improving its data templates on non-performing loans (NPLs) as a key action in facilitating sales of NPLs and the functioning of the secondary markets for NPLs.
Capital Markets Union
BCBS, CPMI and IOSCO survey clients and non-bank intermediaries on margin calls : Standard-setters invite market participants to complete a voluntary survey on margin calls; Survey is part of an examination into liquidity shortfalls during the early stages of the Covid-19 pandemic; Results will ... improve the resilience of non-bank financial intermediaries
Insurance Europe: Outdated VAT rules must be reformed to remove unfair disadvantages for insurers : The VAT Directive is outdated and is not correctly applicable to modern financial services, which it puts at a disadvantage compared to other sectors.
SUERF: How the Capital Markets Union can help Europe avoid a liquidity trap : Europe hasn’t yet fallen into a liquidity trap. Yet, the eurozone has only marginally spent or invested the massive amounts of liquidity injected into economies to combat COVID-19 shocks—indicating unproductive use of this money.
Environmental, Social, Governance (ESG)
ECB's Elderson: All the way to zero: guiding banks towards a carbon-neutral Europe : The challenge of climate change is daunting. This is certainly true for the consequences if climate change continues unabated, such as increased natural disasters and the loss of habitats and biodiversity.
EU and global experts discussed the opportunities and challenges of audit and assurance of Environmental, Social and Governance (ESG) inform : A substantial transformation of the sustainability reporting landscape is underway, but for ESG information to meet users needs, allow for informed decision-making and ensure proper functioning of capital markets, its users need to be able to trust it.
IFRS Foundation Trustees publish institutional arrangements for proposed new sustainability standards board : The Trustees are seeking feedback on proposed amendments to the Foundation’s Constitution to accommodate the potential formation and operation of the ISSB.
Protecting Customers
SMSG advice to ESMA on its Consultation Paper on “Guidelines on certain aspects of appropriateness and execution-only” : On the whole, the SMSG is of the opinion that the draft guidelines are sound and beneficial to the protection of investors.
ESMA consultation on Appropriateness Guidelines Under MIFID II: EBF response : The EBF welcomes ESMA’s effort to give guidelines on how to best apply the appropriateness test requirements.
BDB: Guidelines on certain aspects of the MiFID II appropriateness and execution-only requirements : The system of non-advised services and investment advice business is crucial for clients in theGerman market.
The European Banking Authority publishes report on mystery shopping activities of national authorities : Mystery shopping allows NCAs to obtain greater insight into the conduct of financial institutions. The latter are then encouraged to take corrective actions and to better comply with applicable requirements, thus eventually enhancing the protection of consumers.
Fin Tech Regulation
Project Syndicate: The Promise and Peril of Central Bank Digital Currencies : With China and others venturing into a realm once inhabited by private cryptocurrencies, there will be increasing pressure on the United States, Europe, and others to follow. But before everyone rushes in, policymakers would do well to consider the foreseeable risks and how they should be managed.
Vox: Bank runs and central bank digital currency : One of the concerns in the debate on central bank digital currency is whether the ability for depositors to hold an account at the central bank could trigger a run on the banking system..look back to the French Great Depression of 1930-1931, when savers had a safe alternative to banks.. .
Vox: The conflict between CBDC goals and design choices : This column argues that central bank digital currency alone will not achieve those goals unless central banks are willing to engage in all the steps of the payment system or complement their digital currency with ... regulatory changes to ensure competition and interoperability of payments.
Broadening the International Role of the Euro
IMF: US Dollar Share of Global Foreign Exchange Reserves Drops to 25-Year Low : Some analysts say this partly reflects the declining role of the US dollar in the global economy, in the face of competition from other currencies used by central banks for international transactions. If the shifts in central bank reserves are large enough, they can affect currency and bond markets.
Brexit
European Parliament formally approves EU-UK trade and cooperation agreement : Political groups strongly welcome the agreement; Parliament must have a say in the implementation of the agreement; Agreement will enter into force on 1 May after Council conclusion
FT: Boris Johnson’s ‘madman’ strategy dumbfounded Brussels’ Brexit chief : Michel Barnier diaries describe how EU lost trust in UK’s unpredictable and unprepared prime minister
POLITICO: 7 takeaways from Michel Barnier’s Brexit book : Former EU Brexit negotiator doesn’t get on with Dominic Raab or Martin Selmayr.
London 4 Europe: The Irish Brexit – conundrum and trilemma : The UK and Ireland both being members of the EU was a crucial factor in the path towards peace in Northern Ireland, argues Denis Loretto, a founder member and former Chair of the Alliance Party of Northern Ireland.
