(This e-mail provides the headers of a selection of the articles published this week. If you would like to upgrade to our Gold service and access all articles - with live links to the underlying news - please click on the button)
Articles from 10-16 June 2022
Policy impacting Finance
EPC: The von der Leyen European Commission at midterm: Same priorities, different reality : At the halfway point of the von der Leyen Commission’s term, and amid a tumultuous context, the EPC has conducted a thorough and broad analysis of its successes and failures so far. How have the pandemic and the war affected President von der Leyen’s initial promises?
ECON: Opening remarks by Commissioner McGuinness at the ECON Committee Structured Dialogue : ...the number of files that are open - so we have close to 20 active files under negotiation - ranging from measures to develop capital markets union, anti-money laundering, and sustainable finance.
Bruegel: Fragmentation risk in the euro area: no easy way out for the European Central Bank : The ECB should design a specific tool that will accompany interest rate hikes to neutralise the risk of fragmentation directly for countries facing it, staying within the bounds of the EU treaties and ensuring political legitimacy.
Statement after the ad hoc meeting of the ECB Governing Council : the Governing Council decided that it will apply flexibility in reinvesting redemptions coming due in the PEPP portfolio...accelerate the completion of the design of a new anti-fragmentation instrument.
Banking Union
MEPs present plans to crack down on dirty money with new Anti-Money Laundering Authority : The proposal to establish an Anti-Money Laundering Authority (AMLA) aims to improve coordination and information exchange between national Financial Intelligence Units (FIUs), which act as intermediaries between financial entities and law enforcement.
EBA publishes Guidelines on role and responsibilities of the AML/CFT compliance officer : These Guidelines set clear expectations on the role, tasks and responsibilities of the AML/CFT compliance officer and the management body. They specify that credit or financial institutions should appoint one member of their management body .. responsible for implementation of the AML/CFT obligation
SRB publishes updated guidance documents for bail-in operationalisation : Guidance enhanced based on bank feedback and experience gained in crisis simulations; Expands the guidance published in August 2020
Capital Markets Union
SSM's Elizabeth McCaul at Global ABS Confererence: Supervisory priorities and securitisation : After almost two years of pandemic and lockdown measures, the outlook for the European banking system was quite bright at the end of last year. Capital and liquidity positions were strong, and banks’ asset quality and profitability improved over the course of 2021.
EIOPA consults on the advice on the review of the securitisation prudential framework in Solvency II : ..assess the recent performance of the rules on capital requirements (for banks and (re)insurance undertakings) ..contributing to the sound revival of the EU securitisation market on a prudent basis.
ESMA Report Confirms BETTER FINANCE Findings of Investor Detriment through “Fixed Fee Splits” in Securities Lending : Three years after its first report, BETTER FINANCE expanded on its research into securities lending[2] to once more find that fund managers’ “fee split” arrangements, particularly with in-house agents, vary considerably and may be contrary to ESMA’s Guidelines.
InsuranceEurope: European insurers set out key positions on Holistic Framework and ICS ahead of IAIS Global Seminar : “The industry looks forward to seeing the outcome of discussions on the Insurance Capital Standard (ICS) . European insurers support the development of global standards, as they are an important element in ensuring global financial stability and consumer protection. .."
Environmental, Social, Governance (ESG)
ESMA's Ross: Greening the financial markets: challenges and opportunities at the current juncture : .. to consider how the current context provides us with an opportunity for further greening financial markets..
EuropeanIssuers in favour of a stronger, more comprehensive, and coherent framework of ESG ratings : EuropeanIssuers overall observed that ESG rating agencies do not have a sufficient level of maturity and comparability, presenting several issues with regards to transparency, methodological choices, comparability, and quality, thus leading to uncertainty and confusion about ESG in general, and ESG performance of specific companies in particular.
IPE: MEPs adopt objection to EC plan for nuclear, gas in green taxonomy : In a joint meeting yesterday, MEPs in the Economic and Monetary Affairs Committee and the Environment, Public Health and Food Safety Committee voted 76 to 62, with four abstentions, to adopt an objection to the Commission’s proposal.
OECD: ESG RATINGS AND CLIMATE TRANSITION : An assessment of the alignment of E pillar scores and metrics
BCBS: Principles for the effective management and supervision of climate-related financial risks : The principles seek to improve banks' risk management and supervisors' practices related to climate-related financial risks...The publication of the principles is part of the Committee's holistic approach to addressing climate-related financial risks to the global banking system.
Fin Tech Regulation
ECB's Panetta at ECON: The digital euro and the evolution of the financial system : ..a digital euro would contribute to our strategic autonomy and economic efficiency by offering a European means of payment that could be used for any digital payment, would meet Europe’s societal objectives and would be based on a European infrastructure.
Finextra: Apple cuts out banks to offer BNPL loans directly : The tech giant has set up a wholly-owned subsidiary, Apple Financing, to offer loans directly for the Apple Pay Later service. Apple had net cash of $73 billion at the end of March.
Finextra: Money 20/20 EU: How ‘web2.5’ and DLT are propelling financial services forward : In conversation: Mariana Gomez de la Villa (centre expertise lead, distributed ledger technology, ING) on the key trends dominating the DeFi world, from one of the industry’s leading voices. Here are Gomez de la Villa’s key insights shared direct from the floor of Money20/20 in Amsterdam
Economic Policies Impacting EU Finance
POLITICO: EU primed for minimum tax rate deal on Friday : Poland’s change of heart comes after its government settled a rule-of-law dispute with the Commission.
Project Syndicate's Fuest: Don’t Raise the Eurozone’s Public-Debt Limit : In view of already-high levels of national debt and rising inflation in the eurozone, giving governments more debt leeway is the wrong way to go. Fiscal policy coordination should instead focus more on reallocating public expenditure and thus on increasing its quality rather than its quantity.
Brexit and the City
Reuters's Jones: UK lawmakers urge caution with post-Brexit financial reform : Brexit is no reason to radically alter British financial regulation and regulators should not be forced to water down rules to boost London's competitiveness, or stray from global standards, a UK parliamentary committee report said on Thursday.
Brexit
Serious breach of international law: MEPs call on UK not to adopt new bill : The UK Contact Group co-Chairs David McAllister, Bernd Lange and Nathalie Loiseau issued the following statement on Tuesday after a meeting with Commission Vice-President Maroš Šefcovic.
Institute for Government: The Northern Ireland Protocol Bill: legal (and perhaps illegal) goings on : In a guest blog for the IfG, Sir Jonathan Jones QC, the former head of the Government Legal Department, assesses how the government received legal advice on the Northern Ireland protocol – and finds its published legal position far from persuasive
UK TPO: Northern Ireland Protocol Bill: is it all just a ploy? : The UK Government has published its bill on the Northern Ireland Protocol (NIP), making a clear move to try to force changes in the arrangements disciplining the economic regime applying to the portion of the UK that has remained in the EU Single Market post-Brexit.
Federal Trust video: Is Johnson finished and what about Brexit? : In this video, our Chairman Johns Stevens and Director Brendan Donnelly discuss Boris Johnson’s chances of survival as Prime Minister. They also consider the implications of his current weakened position for Brexit and in particular for the Northern Ireland Protocol.
CER: What can we know about the cost of Brexit so far? : Disentangling the economic effects of Brexit and Covid-19 is difficult. But now that most advanced economies have surpassed their pre-pandemic level of output, we have a basis of comparison for the UK economy.As with my earlier modelling exercises, I construct ‘doppelgängers’ – each of them a basket of countries whose economic performance closely matches the UK’s before the Brexit referendum and the end of the transition period. They provide a counterfactual UK that did not leave the EU. I estimate doppelgängers for GDP, investment (gross fixed capital formation), total services trade (exports plus imports) and total goods trade (ditto).
