This week in "Brussels"
26 April 2018
Basel III post-crisis reforms, SONIA reform, back-to-back trading, CCP recovery and resolution, Securitisation Regulation, MiFID II/MiFIR, CMU, Solvency II, distribution systems of retail investment products, IFRS 9, Anti-money laundering, European Monetary Union and more.
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Articles from 19 April 2018 - 26 April 2018 |
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Banking Union |
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Basel Committee urges full, timely and consistent implementation of Basel III post-crisis reforms
The BCBS issued the fourteenth progress report on adoption of the Basel regulatory framework. The report sets out the adoption status of Basel III standards for each BCBS member jurisdiction as of end-March 2018. View Article |
Financial Times: EU banks rush to ‘have cake and eat it’ with bad loan sales
Southern European banks have taken more than €14bn in extra provisions this year to write down the value of toxic loans they plan to sell, while taking advantage of a new accounting rule to delay the hit to capital. View Article |
EBF call for amendment: EU VAT directive on independent groups of persons
The scope of application of the VAT exemption related to the services supplied to their members by independent groups of persons has been strictly limited by recent decisions of the Court of Justice of the European Union, seriously affecting European banks. View Article |
Bank of England: Solvency II: SONIA reform implemented
The Bank has today implemented its reforms to the SONIA interest rate benchmark. The Bank’s aim in reforming SONIA is to strengthen a benchmark which is considered critical for the sterling financial markets. Previously, the benchmark was based on a market for brokered deposits which has limited transaction volumes. View Article |
Financial Times: Banks aim to secure London jobs with back-to-back trading
London-based investment banks are increasingly hopeful the European Central Bank will allow them to use “back-to-back” securities arrangements to manage the majority of trades in EU operations out of their existing London bases. View Article |
EBA launches call for papers for its 2018 annual research workshop
The European Banking Authority launched a call for research papers in view of its seventh policy research workshop on the topic ‘Reaping the benefits of an integrated EU banking market'. View Article |
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Capital Markets Union |
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ECB's Coeuré: A cooperative approach to CCP recovery and resolution
Panel intervention by Benoît Cœuré, Member of the Executive Board of the ECB, at the ILF Conference on “Resolution in Europe: the unresolved questions”. View Article |
Bloomberg: ECB seeks new powers to deal with clearing crises outside the EU
The European Central Bank is pushing Brussels policy makers for major new powers over clearinghouses in the US and London post-Brexit, upping the stakes in a battle between global regulators on oversight of the multi-trillion-dollar market. View Article |
Speech by Vice-President Valdis Dombrovskis at City Week in London
The European Commission Vice-President gave a snapshot of the EC's work to break down barriers and further integrate the EU single market for capital, and how Brussels can manage the fact that the UK has decided to withdraw from it. View Article |
Delivery of ESMA’s technical standards on disclosure under the Securitisation Regulation
A letter from ESMA Chair Steve Maijoor to Olivier Guersent, Director-General for Financial Stability, Financial Services and Capital Markets Union, in which he states that ESMA is mandated to submit to the Commission technical standards on securitisation disclosures by 18 January 2019. View Article |
EBA consults on its guidelines interpreting the STS criteria in securitisation
The European Banking Authority launched a public consultation on its draft Guidelines, which will provide a harmonised interpretation of the criteria for the securitisation to be eligible as simple, transparent and standardised (STS). View Article |
ESMA's Maijoor: Resilience, Recovery and Resolution: three essential Rs for CCPs
Chair of ESMA Steve Maijoor said that he welcomes the resolution principles introduced in the proposal for Regulation on CCP Recovery and Resolution, and in particular the condition that any resolution tool based on public financial support to a CCP in resolution should be used as a last resort. View Article |
ESMA updates bonds transparency calculations for MiFID II/MiFIR
The European Securities and Markets Authority updated its MiFID II/ MiFIR transitional transparency calculations for bonds. View Article |
Financial Times: Boutique research houses call for reprieve from MiFID II rules
Boutique research providers are urging regulators to exclude them entirely from inducement rules introduced earlier this year, as “predatory pricing” from investment banks heaps pressure on their business models. View Article |
Financial Times: Why the EU capital markets union matters for ECB policy
The EU needs deeper capital markets to help replace emergency ECB funding for businesses, warns Huw van Steenis, member of the World Economic Forum’s disruptive innovation in financial services group. View Article |
ICMA CBIC issues position paper on EU covered bond legislation
The Covered Bond Investor Council (CBIC) has issued a position paper on the recently released European Commission’s legislative proposal on covered bonds. View Article |
ECMI - The European ETF Market: What can be done better?
Apostolos Thomadakis explains that growing demand in recent years for low-cost, easily tradeable, liquid and transparent investment products, resulted in the global expansion of the Exchange-Traded Fund (ETF) industry. View Article |
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Insurance |
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EIOPA defines its supervisory convergence priorities
The European Insurance and Occupational Pensions Authority (EIOPA) published its supervisory convergence plan for 2018-2019 for the insurance sector, focussing on the implementation of Solvency II and conduct of business supervision. View Article |
Bank of England: Solvency II: Updates to internal model output reporting
In this consultation paper, the PRA proposes to amend the life, counterparty and non-life templates and the associated instructions (LOG files) in SS25/15 and SS26/15. View Article |
Bank of England: Solvency II: Changes to reporting format
In this consultation paper, the PRA proposes changes to the file type and reporting format for a number of regular insurance reporting submissions in order to align with Solvency II Quantitative Reporting Templates and international data standards. View Article |
Investment & Pensions Europe: Solvency requirements ‘encourage investment in risky equities’
The new Dutch financial assessment framework (nFTK) and Solvency II rules encourage pension funds and insurers to invest in the most risky equities, according to quant investors at Robeco. View Article |
Commercial Risk Europe: S&P analysts foresee slight improvements in insurers’ credit quality
Analysts from Standard & Poor’s Global Ratings around the world have been surveyed by the ratings agency looking at credit trends and risks, the macroeconomic and competitive environment, financial expectations, and accounting changes for the year ahead. View Article |
Commercial Risk Europe: Insurers and brokers say clients can’t measure cyber risk
Insurance buyers, and consequently their risk transfer partners, are struggling to measure cyber risk and are therefore largely in the dark about its financial impact, according to a new survey of insurers and brokers by Secure Systems Innovation Corporation (SSIC). View Article |
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Asset Management |
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European Commission: Study on the distribution systems of retail investment products
A study carried out by Deloitte Luxembourg for the European Commission shows the difficulties that consumers in the EU face when trying to buy the most suitable investment fund, life insurance or private pension. View Article |
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Corporate Governance/Accounting |
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EFRAG's endorsement advice on IAS 28 Amendments
EFRAG has completed its due process regarding Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) and has submitted its Endorsement Advice Letter to the EC. View Article |
EFRAG's draft comment letter on accounting policy changes
EFRAG has published its draft comment letter in response to the IASB's Exposure Draft ED/2018/1 Accounting Policy Changes (Proposed amendments to IAS 8) and seeks constituents' views on the proposals. View Article |
IASB: New supporting materials for the IFRS for SMEs Standard
The IFRS Foundation has released the first three of 35 stand-alone modules designed to provide support to anyone learning about, applying or reading financial statements prepared using the IFRS for SMEs Standard. View Article |
ESMA´s 22nd enforcement decisions report
ESMA has published further extracts from its confidential database of enforcement decisions taken by European national enforcers. This report deals with decisions in relation to IFRS 5, IAS 7, IAS 32, IAS 1/IAS 36, IFRS 3/IFRS 13/IAS 28, IFRIC 17, IAS 1, IFRS 10, IAS 8/IAS 21/IAS 29, and IAS 38. View Article |
IASB/Sue Lloyd: IFRS 9 and equity investments
Sue Lloyd, Vice-Chair of the IASB, discusses IFRS 9 and explains the IASB’s thinking behind the requirements for equity instruments in the Standard. View Article |
European Commission: New EU-wide rules on whistleblower protection
The Commission proposed a new law to strengthen whistleblower protection across the EU which will establish safe channels for reporting both within an organisation and to public authorities. View Article |
Investment & Pensions Europe: BlackRock: Regulators should set corporate governance rules
BlackRock, the world’s largest asset management group, has called for regulators to be tasked with setting corporate governance standards rather than relying on index providers to screen prospective or existing members of their benchmarks. View Article |
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Anti-Money Laundering |
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Anti-money laundering: MEPs vote to shed light on the true owners of companies
MEPs supported a December agreement reached with the Council, which also proposed closer regulation for virtual currencies, like Bitcoin, to prevent them being used for money laundering and terrorism financing. View Article |
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Financial Services Policy |
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A European approach on Artificial Intelligence
In its Communication on Artificial Intelligence for Europe, the Commission proposes a three-pronged approach: increasing public and private investments; preparing for socio-economic changes brought about by AI; and ensuring an appropriate ethical and legal framework. View Article |
UK Finance: Finance industry calls for greater collaboration to tackle growing cyber threat
Greater organisational collaboration across the financial services sector, working alongside law enforcement and Government agencies, will be the key means of putting cyber criminals out of business according to the latest report from UK Finance and KPMG. View Article |
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Economic |
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VoxEU: Analysis of the proposal “A constructive approach to euro area reform” by seven German and seven French economists
This column, which forms part of VoxEU's Euro Area Reform debate, discusses the strengths and weaknesses of the proposals in the recent CEPR Policy Insight and makes recommendations for extensions and alternatives. View Article |
Bank of France's Villeroy de Galhau: The sustainability of European Monetary Union and institutional reform
The Governor of the Bank of France elaborates on the three old clichés that are paralysing the debate and that policymakers must put behind them to move forward in the euro area. View Article |
ECB: Results of the April 2018 euro area bank lending survey
Loan growth continued to be supported by easing credit standards and increasing demand. Credit standards eased considerably for loans to enterprises and housing loans. ECB asset purchases and negative deposit facility rate have a positive impact on lending volumes. View Article |
Deutsche Bundesbank: April results of the Bank Lending Survey (BLS) in Germany
Credit standards for loans to enterprises were eased marginally in the first quarter of 2018, in line with expectations in the previous survey round. View Article |
European Commission: 'The Transatlantic Economy Ten Years After the Crisis: Macro-Financial Scenarios and Policy Responses'
Vice-President Valdis Dombrovskis discussed the post-crisis reforms that the EU and the US are still working to complete and looks at some of the common challenges they face today, one decade later. View Article |
ACCA: Global economic confidence rebounds to highest level since 2009 despite trade war risks
The latest Global Economic Conditions Survey (GECS) from ACCA and IMA found that global economic confidence is at its highest level in years, with strong growth since the start of 2017. View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union