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BIS: Higher bank capital requirements and mortgage pricing - evidence from the CCB
How has the Countercyclical Capital Buffer affected mortgage pricing after Switzerland became the first country to activate this Basel III macroprudential tool? By analyzing a database with several offers per mortgage request, here's a picture of mortgage supply and demand. View Article

ECB publishes Consolidated Banking Data for Dec-2014
As this is the first time CBD data are reported based on the new reporting framework, data have to be viewed as provisional and may in certain instances be subject to revisions. View Article

BCBS: Basel III - The standardised approach for measuring counterparty credit risk exposures: Frequently asked questions
This document presents a set of frequently asked questions that relate to the Standardised Approach for measuring counterparty credit risk (SA-CCR). View Article

ECB working paper: The real effects of credit constraints - evidence from discouraged borrowers in the euro area
This paper investigates the characteristics and behaviour of discouraged borrowers in the euro area. The results show that more borrowers are discouraged when the average interest rate charged by banks in a country is higher. Higher corporate tax rates, on the opposite, lead to lower discouragement. View Article

ECB: Working Paper Series - Sovereign risk, interbank freezes, and aggregate fluctuation
This European Central Bank paper studies the interaction of sovereign default risk with the banking sector. Authors present a model with strategic default on public debt in which sovereign risk adversely affects funding conditions of banks on the interbank market. View Article

EBA publishes technical advice on protected arrangements in a resolution situation
The European Banking Authority’s Opinion ensures full protection of well-established sources of refinancing such as secured debt, including securities lending and covered bonds, and of means of risk mitigation. The Opinion was issued in response to a request for advice from the European Commission. View Article

The EBA issues final Guidelines on passport notifications for mortgage credit intermediaries
The European Banking Authority’s guidelines will ensure that information about credit intermediaries carrying out business in more than one Member State is exchanged consistently between national authorities. View Article

EBA consults on technical standards on exemption of NFCs from CVA risk charge
The proposed European Banking Authority’s RTS align the treatment of non-financial counterparties established in a third country with the treatment of EU NFCs. View Article

EBA calls for evidence on SME lending and the SME supporting factor
Through this paper, which is the basis for a preliminary discussion, the European Banking Authority is inviting its stakeholders to provide their input and evidence aimed at supporting the ongoing analysis on bank lending to SMEs and the impact of the SME SF. View Article

EBA to conduct further analysis on Net Stable Funding Requirements and Leverage Ratio
The European Banking Authority informed that it will incorporate additional analysis into its calibration reports on Net Stable Funding Requirements and Leverage Ratio. The announcement follows a request by the European Commission. View Article

Bank of England: Assessing capital adequacy under Pillar 2
PS17/15 has been updated to align references to the updates made in Supervisory Statement 31/15 ‘The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP)’ to incorporate a new chapter on reverse stress testing. View Article

Bank of England: The PRA Rulebook - Part 3
This policy statement further advances the commitment made by the PRA in its Approach Documents to amend and streamline substantially both the PRA Handbook and the associated materials carried over from the FCA, creating a new Rulebook and body of supporting supervisory statements. View Article

Bank of England: The PRA Rulebook - Part 4
This consultation paper sets out proposals to redraft certain modules of the Prudential Regulation Authority Handbook. It is the fourth in a planned series of consultations aimed at reshaping Handbook material inherited from the FSA to create a Rulebook, containing only PRA rules. View Article

Bank of England: PRA censures Co-operative Bank for serious risk management and transparency failings
Following an enforcement investigation into the Co-operative Bank Plc (Co-op Bank) the PRA has found that there were serious and wide-ranging failings in Co-op Bank’s control and risk management framework during the period from 22 July 2009 to 31 December 2013. View Article

ECB: Between capture and discretion – The determinants of distressed bank treatment and expected government support
Findings of this working paper might motivate policy makers and legislators to make bank regulation and supervision more robust to influences from the regulated industry in order to avoid regulatory capture dominating regulatory discretion. View Article

Reuters: National laws hamper ECB's work as single supervisor
Diverging national laws on banking supervision are hampering the European Central Bank's work as single supervisor of the euro zone's largest lenders and the rules need to be harmonized. View Article

Reuters: EU's 2016 stress test will include 50-60 euro zone banks
Between 50 and 60 euro zone banks will be included in next year's stress test of top EU lenders, fewer than half of the number in the 2014 exercise, the European Central Bank's spokeswoman Nouy has said. View Article

ABBL: EU-wide stress testing - Can you leverage your 2014 project?
Following confirmation that the next EU-wide stress test will take place in 2016, many of the European banks have been confronted by the reality that they have no systematic record of the hard work they did in 2014 and will therefore start next year’s exercise from scratch. View Article

Bruegel: Euro area banks remain vulnerable
Strengthening the banking system is important to achieve a sustainable recovery, because it will revitalise credit to the healthier segments of the economy. However without restructuring, euro area banks are still vulnerable. View Article

Financial Times: Banks warn over European privacy rules
Banks are lobbying Brussels over a sweeping overhaul of the EU’s privacy rules, which would make it harder for lenders as well as technology groups to collect and keep personal data. View Article

VoxEU: Still vulnerable - The eurozone’s small and medium-sized banks
The ECB believes that most eurozone banks are out of the woods in terms of non-performing assets and capital shortfalls. This column argues that small and medium-sized banks – and among them the unlisted banks – remain under considerable stress. View Article

Financial Times: Europe’s banks need coherent business mix
Instead of taking a top down approach and asking “what sort of businesses fit with our long-term strategy” there is a risk that European banks will simply ask “what are we good at today”, and stick with those businesses. View Article

Financial Times: ECB doubles the time needed to review banks’ risk models
The European Central Bank has quietly given itself up to four years for an “intrusive” review that could force the eurozone’s biggest banks to hold even more capital. View Article

BBA: Can banks satisfy the digital generation?
With the UK launch of Apple Pay, the explosion of contactless payments across Europe and more mobile banking partnerships being cemented all the time, the future looks bright for a certain kind of banking. That banking is digital and increasingly mobile. View Article

BBA: New ONS data – the rise of FinTech and consumer-led trends in digital banking
The ONS survey data released this week on internet access in Great Britain confirmed once again that the digital revolution continues to change the way people go about their day-to-day lives. View Article

EPC: Results of latest EPC poll reveal that instant payments are most likely to trigger the next wave of innovation
The outcome of the survey suggests a significant shift in thinking away from a focus on regulation towards more innovative factors such as instant payments and mobile payments. View Article

VocaLink: The changing face of payments 2015
This year’s survey proves particularly interesting as the impact of mobile and payments apps are clearly indicating a rapid cycle change in the industry, with most developed markets rapidly adapting to mobile real-time payments and established players facing real disintermediation threats. View Article

Reuters: Global finance leaders to banks: reform culture and conduct or face more regulation
A number of the world’s largest banks are still failing to implement much needed cultural and conduct reforms in their businesses, and a failure to do so could spur more government regulation, according to a long awaited report by the Group of Thirty. View Article

ECON: Draft report on stocktaking and challenges of the EU Financial Services Regulation
The document analyses the impact and the way forward towards a more efficient and effective EU framework for Financial Regulation and a Capital Markets Union. View Article

CPMI-IOSCO: Harmonisation of key OTC derivatives data elements (other than UTI and UPI) – first batch
This consultative report is one part of the CPMI-IOSCO Harmonisation Group's response to the FSB mandate. It focuses on a first batch of key data elements (other than UTI and UPI) that are considered important for consistent and meaningful aggregation on a global basis. View Article

ESMA consults on MIFID II standards regarding trading suspensions, data service providers and derivatives reporting
The CP covers the suspension and removal of financial instruments from trading on a trading venue, the notification and provision of information for data reporting services providers and the weekly aggregated position reports for commodity derivatives, emission allowances and derivatives thereof. View Article

ESMA consults on review of EMIR standards relating to CCP client accounts
The consultation is aimed at central counterparties; their clearing members; and financial and non-financial counterparties accessing CCP services as clients of clearing members. View Article

ESMA recommends changes to EMIR framework
ESMA published four reports focused on how the European Markets Infrastructure Regulation framework has been functioning and providing input and recommendations to the European Commission’s EMIR Review. View Article

Report of the ESCB on the need for any measure to facilitate the access of CCPs to central bank liquidity facilities
At present, EMIR does not set requirements or conditions with regard to the provision of central bank liquidity facilities to CCPs; neither does it specify the central bank liquidity facilities to which it refers. View Article

TABB Forum: Trends resulting from the regulatory-driven changes to the markets
The combination of the Dodd-Frank Act, EMIR, MiFID II and Basel III signify the biggest regulatory changes in decades. These reforms resulted in major changes in how financial products are traded, settled, collateralized and reported, resulting in deep structural changes to the markets. View Article

ESMA approves Greek HCMC short selling ban
ESMA issued its official opinion agreeing to an emergency short selling prohibition, for a period of 30 calendar days, by the Hellenic Capital Market Commission under the Short Selling Regulation which replaces the prohibition that expired on Monday 31 August. View Article

European Commission: Financial stability - new rules on central clearing for interest rate derivatives
The Commission decision takes the form of a Delegated Regulation—the first such to implement the clearing obligation under the EMIR. It covers interest rate swaps denominated in euro, pounds sterling, Japanese yen or US dollars that have specific features. View Article

CPMI-IOSCO publish Harmonisation of the Unique Transaction Identifier
CPMI and IOSCO published for public comment a consultative report entitled Harmonisation of the Unique Transaction Identifier. The consultative report is one part of the Harmonisation Group's response to its mandate. View Article

IOSCO publishes Thematic Review of Implementation Progress in Regulation of DMI
The report sets out the findings on the progress jurisdictions made in adopting legislation, regulation and policies in relation to derivatives market intermediaries in the six reform areas addressed in IOSCO’s 2012 report on International Standards for Derivative Market Intermediary Regulation. View Article

ICMA: TARGET2-Securities - Observations relating to Monte Titoli and the repo product
The ICMA note highlights the practical and procedural interpretations of these which the organization hopes will reduce operational risk during and after the migration to the new system. View Article

IOSCO publishes Report on Post-Trade Transparency in the Credit Default Swaps Market
IOSCO concludes that greater post-trade transparency in the CDS market—including making the price and volume of individual transactions publicly available—would be valuable to market participants and other market observers. View Article

FSB: Progress in implementing OTC derivatives market reforms
The report finds that implementation of OTC derivatives market reforms is well underway, with the foundational authority needed to give effect to the full range of these reforms in place in most FSB member jurisdictions. View Article

ESMA advises Commission on implementation of CSD Regulation
ESMA has delivered the Technical Advice on the level of penalties for settlement fails, and the substantial importance of a CSD for the functioning of the securities markets and the protection of the investors in a host Member State. View Article

ICMA response to the Regulatory Technical Standards on the CSD Regulation - the Operation of the Buy-in Process
ICMA does not believe that without changes to the Level 1 Regulation any of the options can be successfully implemented. View Article

ISDA and AFME respond jointly to EBA's consultation on draft RTS on the valuation of derivatives
ISDA and AFME commented on the EBA’s consultation paper on draft RTS on the valuation of derivatives pursuant to Article 49(4) of the Bank Recovery and Resolution Directive. Their primary concern is with the impact of the proposed implementation on the safety and efficiency of the financial markets. View Article

ICMA: AMIC responds to European Commission consultation on central clearing of OTC derivatives
AMIC members have only expressed interest in certain aspects of the review: the functioning of the clearing obligation in the areas of frontloading and risk compression; trade reporting; and the functioning of the pension scheme arrangement (PSA) transitional exemption from the clearing obligation. View Article

EFAMA response to the EU Commission’s consultation on the review of EMIR
As a principle, EFAMA supports every effort made to enhance financial market regulation which reinforces the stability of the financial system, of which EMIR is an important part. View Article

PensionsEurope’s answer to the EC consultation on regulation EU No 648/2012 on OTC derivatives, CCPs and trade repositories
PensionsEurope supports regulation which reinforces the stability of the financial system. PensionsEurope sees the benefits of EMIR, however it is crucial that PSAs get an appropriate treatment. View Article

ALFI response to the EC consultation on regulation EU No 648/2012 on OTC derivatives, CCPs and trade repositories
ALFI considers that it is of utmost importance to ensure an emergency access to central bank liquidity facilities, and would also plead for the most flexible solution in setting up rules for margins and collaterals. View Article

CFTC issues proposed amendments to swap data recordkeeping and reporting requirements for cleared swaps
The Commission anticipates the Proposed Rules will have a number of other benefits, including a reduced likelihood of double counting notional exposures and an improved ability to trace the history of a cleared swap transaction from execution between the original counterparties to clearing novation. View Article

AMF is strengthening its policy on the obligations of discretionary portfolio management with respect to retail clients
The changes made to position-recommendation DOC-2007-21 in particular concern the resumption of certain principles already applied to collective investment and the addition of items to allow enhanced supervision of mandates invested in unlisted securities. View Article

SEC adopts registration rules for security-based swap dealers and major security-based swap participants
The new rules mark a significant milestone in the SEC’s final implementation of Title VII of Dodd-Frank Wall Street Reform and Consumer Protection Act. View Article

EIOPA: Update of the Technical Information on the relevant risk free interest rate term structures
The European Insurance and Occupational Pensions Authority has published the Technical Information on the relevant risk free interest rate term structures (RFR) to be applied by (re)insurance undertakings in the calculation of their technical provisions with reference to the end of July 2015. View Article

FSB-IAIS workshop on compensation practices in the insurance sector
The FSB and the IAIS held a workshop with senior executives from internationally active insurance groups on the governance of compensation frameworks and alignment of compensation with prudent risk-taking. View Article

Insurance Europe response to the EC’s consultation on the review of the EMIR
In its response, Insurance Europe indicated that there are not sufficient possibilities for long-term investors, such as insurers and pension scheme arrangements, to transfer non-cash collateral with central counterparties. View Article

Insurance Europe response to a consultation by the European supervisory authorities on the technical discussion paper on PRIIPs
Insurance Europe supports the objective of the Regulation to enhance retail investor protection and improve retail investor confidence in PRIIPs. Moreover, Insurance Europe agrees that improving the transparency of the products offered to retail investors will contribute to this aim. View Article

Insurance Europe response to EIOPA’s consultation on the infrastructure advice
The specific draft proposals are a step in the right direction. However, the proposed definition is too narrow and the capital charges still exaggerate the risk posed by investing in infrastructure. Therefore, the current draft is not sufficient to remove the unnecessary barriers to investment. View Article

Insurance Europe: Insurers on track with Solvency II implementation
Europe’s insurers are making significant progress towards implementing Solvency II by the end of this year. However, many are extremely concerned about the pressure which insurers face due to additional last minute requirements that are being imposed in the run-up to the regime coming into force. View Article

Bank of England: 'Solvency II: life insurance product reporting codes' and 'Solvency II: internal model reporting codes and components'
First statement sets out the list of codes which the PRA expects firms to use when reporting information on life business or annuities stemming from non-life business at product level. Second sets out how the PRA expects firms to submit information using product reporting codes . View Article

Bank of England: Solvency II - reporting and public disclosure - options provided to supervisory authorities
This consultation paper seeks feedback on a draft supervisory statement that sets out the PRA’s expectations of firms where it has an option to specify a different approach to that published in the ITS for the Solvency II reporting templates and the Solvency II public disclosure templates. View Article

Financial Times: Crunch time for insurers on capital rules
A long-awaited overhaul of financial safety standards is within sight, with far-reaching implications for the €8.4tn industry. View Article

Fitch: Global reinsurers' soft market pricing pressures slowing
The reinsurance market showed signs of decelerating rate declines in its most recent June/July 2015 renewals, indicating that pricing could be approaching a new equilibrium, says Fitch Ratings in a new global sector report. View Article

Fitch completes insurance notching review for CIS non-life sector
Fitch Ratings has affirmed nine ratings across five insurance groups within the CIS non-life sector following a portfolio review using the agency' recently updated notching criteria for the insurance industry. View Article

Financial Times: Confusion clouds European insurers’ efforts to bolster capital
More than £10bn-worth of mergers and acquisitions have been linked to the Solvency II regime in the UK alone. But tactics can be hard to read, and relative strength may remain nebulous until the final score. View Article

IOSCO publishes Final Report on the Peer Review of Regulation of Money Market Funds
The report describes the implementation progress made by 31 jurisdictions in adopting legislation, regulation and other policies in relation to money market funds. View Article

ESMA launches consultation on draft RTS under the ELTIF Regulation
The consultation will be of particular interest to European Long Term Investment Fund managers and their trade associations, alternative investment funds managers and their trade associations, as well as institutional and retail investors investing into ELTIFs and their associations. View Article

AIMA urges progress on passport for third country jurisdictions
AIMA welcomed the recommendation to extend a pan-European marketing ‘passport’ to alternative investment fund managers and alternative investment funds in several non-EU jurisdictions – but urged faster progress on making the passport available to AIFMs and AIFs in other non-EU countries. View Article

AIMA: Impact of Basel III on hedge funds and asset managers
AIMA announced a new survey that explores how Basel III bank capital rules impact money managers and their financing relationships. View Article

VoxEU: Are asset managers systemically important?
Some financial authorities have proposed designating asset managers as SIFIs. This column argues that this would be premature and probably ill conceived. View Article

AFME: Investors and brokers agree landmark share dealing code
The investment industry agreeing on a new code of conduct with brokers to ensure that 'block trades', where large numbers of shares are bought or sold by investment managers, can be carried out with a more predictable market impact. View Article

ESMA Joint Committee publishes responses to its Discussion Paper on PRIIPS Key Information Document
ESMA published the responses received to the Joint Committee Discussion Paper on Key Information Document for PRIIPS. View Article

ALFI and EFAMA respond to the ESA's technical discussion paper on PRIIPs
ALFI and EFAMA responded to the technical discussion paper on packaged retail and insurance-based investment products. The paper aimed to collect views on the possible methodologies to determine and display risks, performance and costs in the KID for PRIIPs. View Article

FEE demonstrates different scope of bank audits of regulatory reporting across Europe
A FEE survey reveals that the scope of audits of European banks regarding regulatory reporting vary widely between EU member states. View Article

IFAC: IESBA releases 2014 Annual Report, advancing ethics for an evolving, global profession
The report discusses the board’s operating environment, highlights achievements from 2014, and summarizes the progress made on each of the projects in the board’s SWP. View Article

EFRAG ready to send out qualified endorsement advice on IFRS 9
EFRAG continues to believe that IFRS 9 meets the technical endorsement criteria, would be conducive to the European public good and should be adopted for the use in the European Union. View Article

EFRAG´s feedback report on the results of the pre-endorsement questionnaire on IFRS 9
EFRAG has published a feedback report on the results of the pre-endorsement questionnaire on IFRS 9. The input was used by EFRAG in developing its (draft) endorsement advice for the EC on IFRS 9 Financial Instruments. View Article

EFRAG: Feedback statement on input received for the Final Endorsement Advice on IFRS 9
EFRAG has published a feedback statement that summarises the input received during the individual insurance specialist user outreach on the potential deferral of IFRS 9 effective date for insurers. View Article

FRC: BIS´ 'Update on the implementation of the EU Audit Directive and Regulation'
The Department of Business Innovation and Skills has published an update on the implementation of the EU Audit Directive and Regulation. The reforms take effect on 17 June 2016. View Article

IFAC: IPSASB publishes ED 56, The Applicability of IPSASs
The IPSASB released for comment Exposure Draft 56, whose proposed changes address constituents’ concerns about the application of IPSASs to public sector entities. View Article

IASB: Clarifications to IFRS 15 Revenue from Contracts with Customers
The IASB published for public consultation some proposed clarifications to and transition reliefs for IFRS 15 Revenue from Contracts with Customers. View Article

IASB proposes to postpone accounting changes for associates and joint ventures
The IASB published for public consultation a proposal to postpone the date when entities must change some aspects of how they account for transactions between investors and associates or joint ventures. View Article

EFRAG's draft comment letter on the IASB's ED/2015/4 Updating References to the Conceptual Framework
EFRAG seeks input from its constituents on the expected impact of these proposed changes, where they identify that the proposed changes would not be editorial only and the extent to which their accounting policies are affected and whether they agree with the proposed retrospective application. View Article

FEE commented on the PCAOB's initiative to revise the standard on 'The Auditor's Use of the Work of Specialists'
The role of specialists, such as appraisers and actuaries, has become imperative for both auditors and their respective clients, underlying the importance of this initiative. View Article

PwC report reviews state of global financial market liquidity
The report concludes that there are grounds for policymakers to review the calibration of reforms to date and the ongoing regulatory agenda, in order to properly understand the effects of regulatory initiatives by asset class. View Article

What is CMU?
What is CMU and what is it intended to achieve? View Article

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This week in "Brussels"

03 September 2015

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