Articles from 3-9 December 2021
General Financial Policy
POLITICO: 7 early signals from Olaf Scholz : New German chancellor prioritizes pandemic and wants a strong hand on economic and EU policy. Germany’s new Chancellor Olaf Scholz may not have made his first major speech to parliament, but he is already conveying what to expect from his government.
FT: The challenges facing Olaf Scholz’s new German government : The new German government being sworn in on Wednesday amounts to an unprecedented political experiment. The three coalition parties — Social Democrats, Greens and liberal Free Democrats — have never governed together before.
EURACTIV: Germany rejects relaxation of EU fiscal rules : Under a Liberal-led finance ministry, Germany will take a hard line on EU fiscal policy and reject calls from southern EU countries to relax fiscal rules. However, the business-friendly FDP is open to compromise. EURACTIV Germany reports.
Keynote speech by President von der Leyen at the 75th anniversary of the European League for Economic Cooperation : Today, 75 years later, we face very different – but in some ways no less demanding – challenges. Climate change threatens our global livelihoods. We must modernize our economy and find a more sustainable way of living and working.
Commissioner McGuiness: 'The ESRB at 10 years – key achievements and future challenges': keynote address at the 5th ESRB annual conference : Since Brexit, the EU depends too heavily on third-country CCPs, an issue that has also been analysed in depth by the ESRB. We need to expand the EU's own clearing capacity to safeguard financial stability in the medium-term. ECB's de Guindos: Macroprudential policy for non-bank financial intermediation : I will share some considerations on the way forward for a macroprudential approach to non-bank financial intermediation (NBFI)... In the euro area, the financial assets of non-bank financial institutions have more than doubled since the global financial crisis.
UNEP FI: 28 banks collectively accelerate action on universal financial inclusion and health : The Principles for Responsible Banking’s Commitment to Financial Health and Inclusion is a first-of-its-kind accelerator initiative of the banking sector to promote universal financial inclusion and health; 28 signatory banks have joined the leadership group by signing the Commitment
Banking Union
EBA updates on monitoring of CET1 capital instruments : The EBA's monitoring of capital instruments contributes to the enhancement of the quality of institutions' capital across the EU. The EBA will continue to update the Report on a regular basis to give account of new developments in CET1 issuances and practices.
EBA risk assessment shows improvements in EU banks solvency, profitability and liquidity, but asset price corrections remain a key threat : Bank capital and liquidity positions have improved year on year, the CET1 ratio (fully loaded) reached 15.5%, the liquidity coverage ratio (LCR) 174.5%; Profitability has also improved, banks’ return on equity (RoE) reached 7.4% in Q2 2021. However, structural challenges for profitability remain.
European Banking Social Partners Commit to a Common Understanding on Remote Work : The European Banking Social Partners signed a Joint Declaration on Remote Work and New Technologies. The spread of the Covid-19 pandemic and the constantly increasing use of digitalised systems and processes led the Social Partners to reassess and appropriately update our approach to remote work..
EBA consults on draft technical standards setting requirements for crowdfunding service providers : The proposed requirements cover the method used for the calculation of credit scores and loan prices, the factors that the providers need to consider when carrying out a credit risk assessment and conducting a valuation of a loan, and the underlying policies and governance arrangements.
Capital Markets Union
FSB's Knot: Planning is everything: the FSB’s Key Attributes and what we have learnt from them : Developed in the aftermath of the 2008 Global Financial Crisis, as part of a sweeping reform agenda, the Key Attributes were designed to tackle the problem of “too big to fail” financialinstitutions.
AFME: European Benchmarking Exercise (EBE) for Private Securitisations : Its purpose is further to enhance the quality and usefulness of disclosure in the private cash securitisation market, both ABCP and balance sheet financed, in the EU and UK, in order to assist market participants and reassure supervisors
ICMA proposal for a new post-trade transparency regime for the EU corporate bond market : ICMA fully supports the establishment of a single consolidated tape for EU bond markets. ICMA views this as being the necessary vehicle for providing comprehensive, meaningful market transparency.
ESMA publishes latest edition of its newsletter : Your one-stop-shop in the world of EU financial markets focuses this month on the Preliminary Report the EU Carbon Market and on ESMA’s contribution to a more sustainable financial system.
Environmental, Social, Governance (ESG)
IASB: Connectivity, core work and convergence—what next for IFRS Accounting Standards? : IASB Chair Barckow outlined the IASB’s immediate and future priorities, talked about the growing importance of sustainability issues in financial reporting and shared his views on convergence with the FASB.
Vox: Too big to strand? Bond versus bank financing in the transition to a low carbon economy : This column looks at the role bond market-based and bank-based debt plays in the allocation of resources to fossil fuel in the context of the risk of stranded assets.
Sustainable finance roundtable: EIOPA announces its sustainable finance activities for the coming three years : Integration of sustainability risks in the prudential framework of insurers and pension funds by developing proposals for supervisory reporting of climate risks in Solvency II, analysing prudential treatment under Solvency II of assets and/or activities...with environmental and/or social objectives.
UNEP FI: 200 members are now part of the Principles for Sustainable Insurance Initiative : The global collaborative initiative strengthens the industry’s contribution as risk managers, insurers and investors to building resilient, inclusive and sustainable communities and economies on a healthy planet.
IFAC charts the way forward for assurance of sustainability information : This vision addresses the importance of global standards, regulation that supports decision-useful disclosure, and the value of an interconnected approach to sustainability and financial information reporting and assurance.
Irish Funds: Publication on the Corporate Sustainability Reporting Directive : This is essential for funds and asset managers seeking to integrate ESG considerations into their investment decisions and to comply with their obligations under the EU sustainable finance regime. CSRD is therefore foundational to the EU sustainable finance regime and the European Green Deal.
ISDA: Regulatory Considerations for Sustainability-Linked Derivatives : As individual and institutional investors increasingly invest in environmental, social and governance (ESG) activities, the role of derivatives to help meet ESG goals has grown.
Fin Tech Regulation
EBF response to CR 03/2021: Application of the Principles for Financial Market Infrastructures to Stablecoin Arrangements : We agree with the general aim of this report, notably that of applying the current principles for financial markets infrastructures (PFMI) to systemically important stablecoin arrangements (SAs) without creating additional standards for SAs.
Economic Policies Impacting EU Finance
EPC: Rethinking EU economic governance: The European Semester : Reforming and strengthening it is vital given the multiple challenges the EU faces, from the twin green and digital transitions to implementing the Recovery and Resilience Facility (RRF) and tackling the macroeconomic and structural scars left by COVID-19.
Brexit
UKandEU Curtice: Voters still Divided over Brexit – but Back UK Government in Battles with Brussels :It suggests that in a referendum on whether Britain should join or stay out of the EU, 47% would vote to join and 53% to stay out.
