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Welcome to our Friends weekly e-mail.Please note there will not be a `weekly' but a bumper edition on 23 February! CEPS celebrated 40 years of advocating the Single Market but Business Europe sent an urgent message to the European Council that action is still required to re-enforce it. As the ECB starts to run off its Covid- inflated balance sheet, SUERF’s Roldan pointedly reminded us that risk management models have failed us twice in the last decade – perhaps human judgement is still useful! S&P reported that the ECB’s balance sheet run-off will strain the liquidity and profitability of EU banks. With the aid of newly-required supervisory information, ESMA showed that Money Market Funds (MMFs) are now close to €1.5 trillion. However, formal `securitisation’ issuance last year was the worst since 2014. EIOPA’s pressure on third-country insurers in the EU to have an EU-level substance that corresponds to their business may be another fall-out from Brexit. BEUC did not mince its words “Greenwashing is rife in retail financial services”. A rethink of fintech regulation was recommended by the BIS’s Carstens as the EU struggles to come to terms with many aspects of digitalisation even as the ESAs prepare for t4eh operation of DORA. Graham Bishop Articles from 3 - 9 February, 2023
Policy impacting Finance Business Europe: EU urgently needs to do its homework on investment conditions in Europe to improve competitiveness and deliver the net-zero transition : Message to the special European Council meeting on 9-10 February 2023 View Article
ECB lays out balance sheet run-off, to further favour greener firms : In a bid to decarbonise its assets, the ECB said it will stop buying new bonds issued by private sector entities by March, except where corporate issuers have a strong environmental track record. It will also continue buying their green bonds, which fund environmentally-friendly projects, in the primary market. View Article
SUERF's Roldan: A scientific illusion in risk management? : Risk management models failed in both cases of an endogenous shock (the GFC) and an exogenous shock (the pandemic, coming from outside the perimeter of the economy and the financial system). View Article
CEPS's Pelkman: The single market is still the EU’s strategic imperative : Since 1982, we’ve had 40 years of building the single market and despite criticism and much work still to be done, it remains one of the EU’s most potent tools and one of its greatest successes. View Article
Banking Union ECB keeps capital requirements steady in 2023, as banks remain resilient : SREP results show banks have solid capital and liquidity positions and increased profitability, with scores broadly unchanged View Article
EBA consults on the amending ITS on supervisory disclosures : The amended draft ITS incorporate the changes to the EU legal framework, in particular those related to supervisory reporting and investment firms. View Article
S&P: Eurozone banks braced for liquidity, revenue hit as cheap funding era ends : The European Central Bank's TLTRO III program played a crucial role in supporting the eurozone economy during the COVID-19 pandemic. View Article
EBF position on Proposal for Instant Payment Regulation : The EBF position highlights that a balanced and proportionate legal framework that will support the market on the continued roll-out and development of instant payments in Europe is needed. View Article
Capital Markets Union ESMA report finds EU MMF industry at close to €1.5tn : With this report ESMA provides for the first time a comprehensive market-level view of EU MMFs, based on supervisory information collected by National Competent Authorities (NCAs) and ESMA. View Article
ESMA: Artificial intelligence in EU securities markets : The use of artificial intelligence (AI) in finance is under increasing scrutiny from regulators and supervisors interested in examining its development and the related potential risks. View ArticleBloomberg: Clearing Cliff Edge in 2025 Is Receding, EU’s Top Security Regulator Indicates : EU banks will still be able do some clearing in UK, Ross says; London clearinghouses still supply key services for EU traders View Article
AFME Securitisation Data Snapshot: Q4 2022 and 2022 Full Year : European placed securitisation issuance in 2022 was the lowest since 2014. View Article
EIOPA: Risk Dashboard points to overall resilience in insurance despite high macro and market risks : The results show that insurers’ exposures to macro and market risks are currently the main concern for the insurance sector. View Article
EIOPA aims to strengthen oversight of third country governance arrangements with supervisory statement : EIOPA has previously emphasised that EU-based undertakings or intermediaries should not resemble empty-shell companies that do not have an appropriate level of corporate substance within the EU. View Article
InsuranceEurope: IAIS should avoid unnecessarily increasing data reporting burden : While recognising the IAIS’s mandate to continually evolve and improve the IIM assessment methodology, the European insurance industry takes the view that the most important consideration should be to stabilise, or preferably streamline, the IIM data collection. View Article
Insurance Europe: EC proposals for a common EU corporate tax system require refinements : View Article
Impact underwriting: EIOPA reports on insurers’ use of climate-related adaptation measures in non-life underwriting practices : The report is the outcome of a pilot exercise on impact underwriting that EIOPA conducted with 31 volunteering insurance undertakings from 14 European countries in 2022. View Article
Environmental, Social, Governance (ESG) BEUC: Green washing in retail financial services : Greenwashing is rife in retail financial services. The European Commission has recognised this, and in May 2022 it asked the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority to look into the matter. View Article
IPE: Pension schemes still confused on TCFD compliance, report shows : Pension funds are still confused about how to follow Task Force on Climate-related Financial Disclosures (TCFD) reporting, with many claiming that clearer guidance from the UK government is needed, according to a recent report View Article
Fin Tech Regulation Keynote speech by Commissioner McGuinness at 7th Annual Fintech and Regulation Conference on “Digital finance and payments: where are we heading : Digitalisation is changing all of our lives and digital technology is transforming the financial system – allowing for speedier transactions and online services. View Article
Getting Europe ready for the next generation of connectivity infrastructure | Speech by Commissioner Breton on "EU's Digital Ambitions" : Our ambitions are clear. Empower our citizens and businesses in a smoothly functioning Single Market without barriers, protect our democracies, and lead the technological race View Article
The European Supervisory Authorities meet stakeholders from across the financial sector amid preparations for the Digital Operational Resilience Act : The event allowed industry participants to engage with regulators on the new legislation, share their initial views and raise any potential areas of concern regarding the policy mandates the ESAs have to develop over the course of 2023 and 2024. View ArticleReuters's Jones: Rethink needed to regulate Big Tech in finance, says BIS official : Data-rich Big Tech companies such as Alibaba and Amazon have been involved for some time in financial services such as banking, payments, asset management and insurance, with some also providing cloud computing to run key services for banks. View Article
Bruegel: How best to ensure international digital competition cooperation : Large digital firms pose similar competition issues worldwide, such as promoting their own services over those of rivals, or imposing unfair terms and conditions. View Article
finextra: BIS Innovation Hub sets sights on stablecoin monitoring : This year, the hub will increase its focus on improving payments systems and experimenting with CBDCs; on shaping the future of financial regulation and supervision; and on greening and securing the financial sector. View Article
BDB: Position paper on a digital euro – the next step in the evolution of money : The private banks believe strongly that a digital euro will present the opportunity for Europe to organise its payments market and associated services autonomously. However, a digital euro can only be successful if citizens needs are met. View Article
Brexit IOD: How to fix post-Brexit regulation : Three years after Brexit, and one year after the publication of a government paper on ‘the benefits of Brexit’[1], the UK is still struggling to define its post-Brexit regulatory path. View Article
UK-EU regulatory divergence tracker: sixth edition : It identifies and analyses the most significant cases of divergence between the UK and EU which have taken place since Brexit. It explains what the changes are, what impact they are having, and likely further consequences. View Article
Federal Trust's Grey video: It will take time to reverse Brexit : In this Federal Trust video, Professor Chris Grey argues that relations between the EU and UK would improve significantly under a British government which adopted a less confrontational tone towards the EU. View Article
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