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ECON Members’ visit to Madrid regarding exit strategies and the future financial supervisory arrangements
'Internationally, regulatory arbitrage is hard to eliminate, but in the EU we can remove supervisory arbitrage. Enhancing effective day-to-day supervision should be the focus of our work', Sharon Bowles, ECON chair, said.
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Commissioner Almunia: Greece attracts attention of financial markets and rating agencies
FT says Fitch has slashed rating on Greek debt to BBB+ – first time in 10 years leading CRA has rated Greece below A grade. Standard & Poor’s may do the same. EU authorities keen to put pressure on Athens to step up efforts to reduce deficit.
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Audit Office report on maintaining financial stability across UK banking system
Given scale of economic and social costs if one or more major banks had collapsed, public support provided to UK banks was justified. Total public support £850 billion, but final cost to taxpayers will not be known for a number of years.
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ECON Committee Chair tells British Bankers’ Association some banks will have to curb bonuses
MEP Sharon Bowles: ‘Countries have pledged several times their GDP to support banks in order that their economies survive. In the UK, the taxpayer has stumped up around £200bn to help bail out the banks’.
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UK Pre-Budget Report: bashing bankers and consulting on concrete plans to promote financial markets
The PBR includes plans to improve MBS, stimulate non-bank lending channels, commence a new regulatory framework for recognised inter-bank payments systems and promote financial education. It also covers bond markets.
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FSA feedback statement on remuneration – limited application of Code to large banks, building societies and broker dealers
The Statement on Reforming Remuneration Practices in Financial Services explains how and why the FSA has decided not to extend the Remuneration Code to other FSA-authorized firms. However, the FSA lays out plans for further intervention in that area.
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ECON committee dialogue with Trichet – EP does not support ECOFIN-adopted conclusions on ESAs
Trichet: ECOFIN ESA decision not first best. However, considering complexity of the topic and sensitivity of different governments, the Swedish Presidency had done a good job. He also said difficult decisions have to be taken with regard to Greece.
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FT comments on Barnier: he promises to stick to G20 guidelines
He told the Financial Times he did not intend to propose rules that went beyond the G20 framework. Wolfgang Munchau notes Barnier will be in charge of two of the EU’s most difficult political tasks: strengthening both the single market and financial regulation.
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Eurofinas’s comments on Commission Consultation responses on responsible lending and borrowing
Respondents are concerned whether responsible lending/borrowing has an EU dimension. On the issue of credit intermediaries, Eurofinas believes in a differentiated approach between brokers, agents and dealers/retailers involved in credit distribution.
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Bernanke reiterates supervisory approach for systemically important financial institutions
Not just banks but all systemically important financial institutions should be subject to strong and comprehensive supervision on a consolidated, or firm-wide, basis. They should be subject to tougher capital, liquidity, and risk-management requirements than other firms, he said.
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Sobel calls for consistent supervision and regulation of financial institutions
Although there is a high degree of cooperation between the U.S. and the EU, the devil is in the detail when it comes to translating high-level standards into concrete proposals, in particular, with regard to CRAs, hedge funds, and the treatment of OTC derivatives, he warned.
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US Financial Services Committee completes work on new rules for financial system
The new rules create an inter-agency oversight council that will identify and regulate financial firms that are so large, interconnected, or risky that their collapse would put the entire financial system at risk.
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