This week in "Brussels"

18 September 2014



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Articles from 11 September 2014 - 18 September 2014

Banking

European Banking Authority publishes results of the Basel III monitoring exercise as of 31 December 2013
The EBA published its sixth report of the Basel III monitoring exercise on the European banking system. This exercise allows the gathering of aggregate results on capital, liquidity (liquidity coverage ratio (LCR) and net stable funding ratio (NSFR)) and leverage ratios for banks in the EU. 
City AM: Europe’s banks hit their capital buffer targets
Europe's biggest banks were closing in on their capital targets at the end of last year, global regulators at the Basel Committee said 
Reuters: EU bank tests may miss trillion dollar risk – study
Some European banks being checked by regulators for signs of capital weakness may be sitting on up to a trillion dollars of potentially unsafe assets because their holdings of sovereign bonds are not being fully risk assessed, a new study has found. 
Reuters: France and Germany oppose guarantees for ECB debt-buy plan: document
France and Germany oppose granting government guarantees to support the market for repackaged debt, a document seen by Reuters shows, dealing a set-back to the European Central Bank's plans to rejuvenate it. 
Derivatives Risk Solutions: Is Brussels setting the table for a move away from LIBOR?
The Council has published its first compromise proposal for regulation on benchmarks. Although some changes result in a lighter bite for certain benchmark administrators, Brussels is sharpening the knives with regards to critical benchmarks such as LIBOR, argues DRS. 
BIS: Sabine Lautenschläger of ECB speech on Banking supervision
Lautenschläger ranged widely over the topic. 'It is very important - particularly in times of crisis - to make a clear distinction between sound banks that are solvent but suffering from liquidity shortages and insolvent banks that will not be able to survive in the long run.' 
Risk.net: New UK rules clear the way for more prosecutions
New management oversight rules for UK banks could make prosecuting managers far easier for supervision failures and will shift the onus onto managers to show they took proper precautions – a dramatic shift from the state of play at present, lawyers say. 
EBF response to two EBA consulation on Operational Risk and guidelines on materiality, proprietary and confidentiality.
The EBF has responded to two EBA consultations. It strongly chllenges the EBA's legal mandate in some areas. 

Securities

Bloomberg News: Draghi’s ABS-market revival set for boost from regulators
Mario Draghi is trying to rebuild the market for asset-backed securities in Europe. Global regulators are set to lend him a hand. IOSCO will present criteria for marketable ABS to finance ministers from the Group of 20 nations. 
Bloomberg News: Barnier seeking US swaps deal before December
The EU’s top financial-services official said he’s seeking a deal with US regulators on rules for swaps clearinghouses before a Dec. 15 deadline for EU banks to face tougher capital rules.  
Markets Media: OTC industry to aid bank resolutions
The rights of holders of OTC derivatives to terminate contracts during the course of a bank resolution are likely to be trimmed back. The Financial Stability Board is working to mitigate the risks caused by early termination by lengthening the time required to suspend such contracts. 
ISDA extends date for adhering to the ISDA 2014 Credit Derivatives Definitions Protocol
ISDA announced that it is extending the adherence period for the ISDA 2014 Credit Derivatives Definitions Protocol until September 17, 2014 at 12 noon New York time. 
ESMA : list of registered CCPs, which now includes BME Clearing
ESMA added BME Clearing to its list of authorised central counterparties (CCPs) under the European Markets Infrastructure Regulation (EMIR). 
ESMA announces open hearing on CRAs - periodic information to be submitted to ESMA
ESMA will hold an open hearing on the issues raised in the recently published Consultation paper on periodic information to be submitted to ESMA by Credit Rating Agencies. 
IOSCO consults on risk mitigation standards for non-centrally cleared OTC derivatives
IOSCO's report 'Risk Mitigation Standards for Non-centrally Cleared OTC Derivatives' which proposes nine standards aimed at mitigating the risks in the non-centrally cleared OTC derivatives markets, has been published and is open for consultation. 

Insurance

EIOPA publishes its 2013 Annual Report
Much of EIOPA’s work on developing regulations focuses on the application of Solvency II. In 2013, EIOPA supported the trilogue discussions that ultimately concluded in an agreement on the date of its application (1 January 2016). 
IAIS: Report on supervisory colleges for financial conglomerates
The International Association of Insurers Supervisors' Joint Forum has released its report on supervisory colleges for financial conglomerates.  
Commercial Risk Europe: Rising regulation causes higher costs and reputational damage for all says CEO of Zurich Global Corporate
Regulatory regimes around the world are increasingly inconsistent, leading to higher costs and a growing threat of reputational damage, said Thomas Hürlimann. "Prior to the financial crisis, we hoped for more consistency but now there is only one trend, which is fragmentation and protectionism." 
Commercial Risk Europe: EC consults on future of Insurance Block Exemption Regulation (IBER)
The EC has launched a consultation on the IBER that aims to facilitate co-insurance and allow insurers to share information in order to more accurately price risks. The EC will use the consultation to help decide whether to retain, amend or abandon the regulation when it expires in March 2017. 

Asset Management

Risk.net: Barnier hints at longer pensions clearing exemption
Michel Barnier hinted that the EC will extend the temporary exemption pension funds have from mandatory clearing of their over-the-counter derivatives trades beyond 2015. 
IPE: Brussels to limit prescription in Shareholder Rights Directive
The Shareholder Rights Directive will not result in an endless list of disclosures with which to comply but rather seek to limit the amount of prescription required, according to a senior European Commission figure. 
IPE: Pension funds must be more transparent on ownership rights – DNB
The individual ownership rights of pension fund participants must be more transparent if the Netherlands is to build a truly sustainable system, according to Klaas Knot, president of Dutch regulator De Nederlandsche Bank (DNB). 

Corporate Governance/Accounting

IASB: Discussion Paper on reporting the financial effects of rate regulation
The IASB published for public comment the Discussion Paper 'Reporting the Financial Effects of Rate Regulation.' 
IASB: Proposals for measuring quoted investments in subsidiaries, joint ventures and associates at fair value
The IASB published for public comment an ED detailing proposals concerning the measurement of investments in subsidiaries, joint ventures and associates at fair value when those investments are quoted in an active market.  
IASB: Amendments to IFRS 10 and IAS 28
The IASB issued narrow-scope amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures (2011). The amendments will be effective annually on or after 1 January 2016.  
EFRAG: Draft comment letter to the IASB on proposed amendments to IAS 12
EFRAG has published its draft comment letter in response to the ED/2014/3 Recognition of Deferred Tax Assets for Unrealised Losses (Proposed Amendments to IAS 12). Responses to EFRAG's comments are welcomed until the end of November. 
EFRAG: Short Discussion Series paper on presentation of reversal of acquistion step-ups
EFRAG has published a new Short Discussion Series paper that discusses presentation and disclosure of information on the reversal of step-ups recognised in a business combination. Constituents are invited to provide their views by 31 December 2014. 
ECA: Improving accountability for EU policies requires greater cooperation between EU Member States, parliaments and auditors
The ECA called upon the EU to improve its financial accountability towards citizens. In the ECA’s view, the EU should strengthen the links between public financial managers, parliaments and public auditors both at the EU and in the Member States. 

Financial Services Policy

ECB: Draghi's 3 Pillars approach (Eurofi Speech)
"We are facing a set of conditions – low growth and low inflation, high debt and high unemployment – that can only be addressed by concerted action on both the demand and supply sides of the economy." 
ECB: Interview with Benoît Cœuré, Member of the Executive Board of the ECB
In an interview with Jean Paul Betbèze of the Robert Schuman Foundation, Mr Cœuré comments upon the crisis, policy and a way forward. 'We have to support growth and lending to the economy' he reiterated. 
Eurogroup September Summit: Eurogroup moves ahead with structural reform agenda
At the Eurogroup meeting on 12 September in Milan the ministers reaffirmed their commitment to reduce the tax burden on labour. The objective is to make euro area economies more competitive and boost economic activity and employment. 
Bank for International Settlements, September 2014 Quarterly Review: Volatility stirs, markets unshaken
Volatility has settled back to exceptional lows after spiking briefly in early August. International banking activity stopped contracting in the first quarter of 2014. Corporate borrowers from emerging markets have lengthened their debt maturities. 

Grahams Articles, Comments & Speeches

European Court of Justice: `the United Kingdom’ versus ECB on CCPs
The ECJ may soon pronounce judgment on three cases brought by the UK Government against the ECB on the location of CCPs. What on earth is it all about? Does it matter? 




© Graham Bishop