This week's 155th Brussels 4 Breakfast featured the legislative moves to `green' European finance, a surpsrisngly heated discussion on the riskiness of AI escaping from the genuine understanding/control of the Board and more on the continuing fragility of the EU's banking system. My Notes are here

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Articles 3 October 2019 - 9 October 2019

Banking Union

Euro area banks have overall comfortable liquidity positions, but some vulnerabilities require further attention, ECB finds : The vast majority of banks directly supervised by the European Central Bank have overall comfortable liquidity positions despite some vulnerabilities requiring further attention, according to the results of the 2019 supervisory stress test. View Article

EBA: Low profits and high costs remain a key challenge for the EU banking sector : The EBA published its quarterly Risk Dashboard covering Q2 data, which summarises the main risks and vulnerabilities in the EU banking sector. Capital ratios have remained broadly stable and banks' asset quality has further improved. However, low profitability keeps on being a key challenge for the sector. View Article

ESAs highlight money laundering and terrorist financing risks in the EU financial sector : The ESAs found that the monitoring of transactions and suspicious transactions reporting still raise concerns, particularly in sectors where a financial institution's business model is based on frequent transactions.  View Article

European Parliament: Towards a fundamental re-design of banks’ Stress Tests in the EU? : This European Parliament briefing provides background information to existing stress tests, highlights some issues that may still require attention in future stress tests - in particular in terms of transparency and communication, - and summarises proposals Andrea Enria mentioned in his speech. View Article

Financial Times: How to solve a problem like European banking : Thomas Hale assesses Barclays' research which points to the “structural drag” from negative rates, due to the zero bound of household deposits. In France and Germany in particular, it says, tiering only provides “partial relief”. View Article

Financial Times: France’s SocGen chief rejects call for ECB to buy bank bonds : Société Générale’s chief executive has dismissed calls for the European Central Bank to buy bank bonds, arguing it would support failing rivals and prevent consolidation.  View Article

EBF president Mustier addresses European Banking Summit : The president of the European Banking Federation, Jean Pierre Mustier, addressed the EBF’s European Banking Summit in Brussels, outlining his views on key developments in the European banking sector and challenges in banking regulation. View Article

ECB Banking Supervision: SSM Supervisory Priorities 2020 : The supervisory priorities set out focus areas for supervision in 2020. They build on an assessment of the key challenges facing supervised banks in the current economic, regulatory and supervisory environment. View Article

ECB executive board: Eurogroup gives support to Fabio Panetta's candidacy : The Eurogroup gave its support to the candidacy of Fabio Panetta to become the new member of the European Central Bank's executive board. View Article

Capital Markets Union

ESMA consults on MAR review : The consultation paper includes proposals affecting the investor community as a whole, but which are particularly relevant for issuers of financial instruments admitted to trading or traded on a trading venue and their management, investment firms and asset management companies. View Article

ESMA adopts MAR standards on supervisory cooperation : ESMA’s RTS cover cooperation arrangements between national competent authorities and their counterparts in third-countries for the purpose of efficiently exchanging information and enforcing the obligations related to market abuse. View Article

ESMA consults on MiFIR alignment following the introduction of EMIR Refit : ESMA launched a consultation on possible amendments to the trading obligation under MiFIR following the introduction of EMIR Refit. View Article

ESMA consults on the commercial terms for providing client clearing services under EMIR : ESMA published a consultation paper on draft technical advice to the European Commission on specifying the conditions under which commercial terms are to be considered fair, reasonable, non-discriminatory and transparent (FRANDT) where clearing service providers offer clearing services to clients. View Article

BIS: Report sets out governance of key OTC derivatives data elements : The report identifies key criteria, functions and bodies for the governance arrangements for a set of critical data elements for over-the-counter (OTC) derivative transactions reported to trade repositories, excluding the Unique Transaction Identifier (UTI) and the Unique Product Identifier (UPI). View Article

ESMA publishes final report on CSDR Guidelines on standardised procedures and messaging protocols : The Guidelines aim to clarify the scope of the requirement contained in Article 6(2) of the Central Securities Depositories Regulation and provide guidance on the standardised procedures and messaging standards used for compliance. View Article

EIOPA launches field test on revised and new templates under Solvency II reporting and disclosure review 2020 : The EIOPA launched - as part of the 2020 Solvency II reporting and disclosure review – Wave 1 - a field test on the revised and newly proposed templates. As indicated in the context of the consultation on supervisory reporting and public disclosure the revision covers both content and structure of different templates.  View Article

Environmental, Social, Governance (ESG)

European Parliament: How to increase green investment in the EU : A shift to a less-polluting economy requires significant investment. The EU wants to attract more private money as public funds are insufficient. View Article

Bank of England's Carney: TCFD: strengthening the foundations of sustainable finance : Mark Carney, Governor of the Bank of England discusses how the Task Force on Climate-related Financial Disclosures can help to bring climate risks and resilience into the heart of financial decision-making.  View Article

IPE: Responsible investment surges in importance : Responsible investment (RI) surged in importance for all types and sizes of institutional investors around the world in the last year, a new survey has found, with the biggest gains in positive sentiment towards the approach recorded among respondents in the UK. View Article

Project Syndicate: The unsustainable sustainable investing boom : As financial institutions rush to profit from the boom in sustainable investing, they risk overselling its ethical and commercial benefits. It would be a shame if a movement with genuine potential to change the world were stopped in its tracks by old-fashioned mis-selling. View Article

BusinessEurope: EU trade unions and employers want ambitious EU industrial strategy : European employers and trade unions are jointly calling on the new EC and Parliament for a more proactive and ambitious EU industrial strategy. The ETUC, BusinessEurope, SMEunited and CEEP want to position European industry as a global leader that will responsibly deliver prosperity by creating value for the people and the planet. View Article

Accountancy Europe: Key audit matters in European Banking sector – update 2019 : Accountancy Europe´s survey provides insights and conclusions on the auditor’s reporting of KAMs for more than 60 European banks, which own the vast majority of the assets in the European banking sector. View Article

Protecting Customers

European Council: Better protection of whistle-blowers: new EU-wide rules to kick in in 2021 : The Council formally adopted new rules on whistle-blowers protection which will require the creation of safe channels for reporting both within an organisation - private or public - and to public authorities.  View Article

Insurance Europe: Time to rethink ePrivacy, say pan-industry associations : A group of industry associations — representing interests as varied as ICT, automotive, medical technology, construction equipment, consumer electronics, home appliances, retail, banking and insurance — have called on the Council of the EU to ask the European Commission to fundamentally reassess its proposal for the ePrivacy regulation. View Article

Fin Tech Regulation

European Parliament's Joint Research Centre: Blockchain now and tomorrow: assessing the impact of distributed ledger technologies : Moving beyond the hype and debunking controversies, the report offers an in-depth and practical understanding of blockchain and its possible applications. View Article

VoxEU: The emergence of Big Tech in financial intermediation : This column assesses the economic forces behind the adoption of Big Tech services in finance. It shows that Big Tech lenders thrive in countries with less competitive banks and less strict regulation, and that they have an information advantage from the use of big data and machine learning. View Article

The Economist: The rise of the financial machines : New artificial-intelligence programs are writing their own investing rules, in ways their human masters only partly understand. Industries from pizza-delivery to Hollywood are being changed by technology, but finance is unique because it can exert voting power over firms, redistribute wealth and cause mayhem in the economy. View Article

BBC: Libra - PayPal first to drop out of Facebook cryptocurrency : Payments firm PayPal has become the first company to pull out of an alliance that is trying to launch Facebook's digital currency Libra. View Article

Insurance Europe: New publication examines insurers’ role in increasing EU cyber resilience : Insurance Europe has today launched a new publication entitled “Insurers’ role in EU cyber resilience”, which highlights the key role insurers play in assisting the EU in its efforts to increase cyber resilience and competitiveness. View Article

Friends' Basic Services

155th Brussels for Breakfast – CPD Notes : Organised by the Centre for the Study of Financial Innovation (CSFI), hosted by CISI and with co-presenter Jacques Lafitte (Avisa).  View Article

Christine Lagarde and Mario Draghi - source: The Telegraph

Economic Policies Impacting EU Finance

Financial Times: Former central bankers attack ECB’s monetary policy : A group of former senior European central bankers has published a memo attacking the loose monetary policy of the European Central Bank, which they argued was “based on the wrong diagnosis” and risks eroding its independence. View Article

Financial Times: Europe’s biggest insurer lambasts ECB over rates : Europe’s top insurance boss has launched a blistering attack on Mario Draghi and the European Central Bank over the “politicisation” of monetary policy in the region. View Article

Project Syndicate: Who can influence the ECB? : Eurozone governments will soon have to fill two open slots on the European Central Bank's Executive Board. Rather than proposing candidates who will forcefully promote national views, they should consider nominees who are likely to be able to influence ECB policy, argues economist Stefan Gerlach . View Article

IMF chief Kristalina Georgieva - source: UltimaHora

The Wall Street Journal: IMF and World Bank’s new leaders warn of deteriorating global outlook : The new leaders of the International Monetary Fund and World Bank warned in twin speeches of a deteriorating global economic outlook, just a week before they will lead the annual meetings of their institutions for the first time. View Article

City AM: Eurozone recession risk 'very real' as slowdown infects services sector : Germany slipped into recession territory last month as the Eurozone teetered on the brink of stagnation, data by the IHS Markit’s Germany Composite PMI revealed. View Article

ECB: Improving macroeconomic stabilisation in the euro area : Luis de Guindos, Vice-President of the ECB, explains why now is a particularly appropriate time for fiscal stimulus. De Guindos also offers some thoughts on how to improve the current fiscal framework. View Article

BIS committees release two major reports on unconventional policy tools : The Committee on the Global Financial System (CGFS) and the Markets Committee have published two major reports on the implementation and implications of unconventional monetary policy tools (UMPTs) introduced by central banks in response to the financial crisis and its aftermath. View Article

ECB: Working paper: Introducing dominant currency pricing in the ECB’s global macroeconomic model : In this paper, authors document the introduction of DCP into ECB-Global, the ECB’s main global macroeconomic model. To the best of author‘s knowledge, this is the first attempt of introducing DCP into a major global macroeconomic model used at policy institutions.  View Article

Basic Enconomic Indicators

EU28 current account surplus €40.9 bn : The EU28 seasonally adjusted current account of the balance of payments recorded a surplus of €40.9 billion (1.0% of GDP) in the second quarter of 2019, down from a surplus of €47.4 billion (1.2% of GDP) in the first quarter of 2019. View Article

Volume of retail trade up by 0.3% in euro area : In August 2019 compared with July 2019, the seasonally adjusted volume of retail trade increased by 0.3% in the euro area (EA19) and by 0.2% in the EU28, according to estimates from Eurostat. View Article

EU27 Politics

The Guardian: Portugal election result cements modest gains for Europe's centre-left : Portugal’s Socialists won the general elections but fell short of an absolute majority, leaving the prime minister, António Costa, needing to negotiate a delicate new alliance with the far-left parties that backed him last time around. View Article

Graham Bishop #FBPE retweeted
	FT Brussels @ftbrussels
Juncker and Barnier still hopeful for a Brexit agreement with Boris Johnson on.ft.com/326ZJAo
Graham Bishop #FBPE retweeted
	Sky News @SkyNews
The EU's chief negotiator @MichelBarnier has said it is "very difficult, but possible" to strike a #Brexit deal before next week's deadline. To read the full story, click here: po.st/nHpkFF pic.twitter.com/PmillJUGrP
	Graham Bishop #FBPE @GrahamBishopcom
Delighted to announce that I have been re-elected to the Board of the Kangaroo Board – after a decade and half of service! #KangarooGroup #EU
	Graham Bishop #FBPE @GrahamBishopcom
Read my CPD Notes on the latest 155th Brussels for Breakfast debate! A lively exchange with Avisa Partners' Jacques Lafitte about the latest EU developments: #Brexit #AML #GreenDeal #MEPshearings #ECB ow.ly/xe6550wGuZg
Graham Bishop #FBPE retweeted
	Donald Tusk @eucopresident
.@BorisJohnson, what’s at stake is not winning some stupid blame game. At stake is the future of Europe and the UK as well as the security and interests of our people. You don’t want a deal, you don’t want an extension, you don’t want to revoke, quo vadis?
Graham Bishop #FBPE retweeted
	BBC Business @BBCBusiness
IMF boss Kristalina Georgieva warns of 'painful' Brexit bbc.in/31YlClf
Graham Bishop #FBPE retweeted
	Bloomberg Markets @markets
Kristalina Georgieva, in her first major address as head of the International Monetary Fund, painted a downbeat picture of the world economy and said a more severe slowdown could require governments to coordinate fiscal-stimulus measures bloom.bg/2p2tUKl
Graham Bishop #FBPE retweeted
	New Europe @New_Europe
Sassoli: UK’s Brexit proposals are not immediately operable, long way from something European Parliament could agree to dlvr.it/RFmppM pic.twitter.com/MUUY5CGXu0
Graham Bishop #FBPE retweeted
	Robert Peston @Peston
Downing St has tonight said explicitly that EU governments which oppose a Brexit delay will be rewarded by Boris Johnson, and that if the EU approves a delay Johnson will do his damnedest to sabotage the functioning of the EU, pending Brexit. This is the most explosive... pic.twitter.com/QWtvex6O90
Graham Bishop #FBPE retweeted
	Bloomberg Brexit @Brexit
BREAKING: Boris Johnson tells Angela Merkel a Brexit deal is “essentially impossible” if the EU demands Northern Ireland stay in the bloc’s customs union bloom.bg/2nqHQgz pic.twitter.com/Gh6JgADsAP
Graham Bishop #FBPE retweeted
	Paul Johnson @PJTheEconomist
Economy - and hence our living standards - is 2.5-3% (£55-£66bn) smaller than it would have been without Brexit vote. We have lost out on 3 years of global economic growth. Citi analysis in @TheIFS Green Budget published today ifs.org.uk/publications/1…
Graham Bishop #FBPE retweeted
	The Guardian @guardian
Macron gives Johnson until end of week to overhaul Brexit plan theguardian.com/politics/2019/…