This week in "Brussels"
15 December 2016
EBA, MREL, capital requirements, equivalence, CMU, STS Securitisation, PSPP securities lending, OTC derivatives, PRIIPs, Solvency II, Occupational pension funds, MMFs, Shareholders' rights and more.
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Articles from 08 December 2016 - 15 December 2016 |
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Banking |
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EBA makes final recommendations for strengthening loss-absorbing capacity of banks in Europe
The EBA published its final Report on the implementation and design of the minimum requirement for own funds and eligible liabilities (MREL). The Report quantifies the current MREL stack and estimates potential financing needs of European Union banks under various scenarios. View Article |
AFME: Free Flow of Capital and Liquidity - Issues for Cross-border Groups in the EU Prudential Framework
This paper describes the types of restrictions and obstacles cross-border groups face in relation to the current EU prudential framework as set out in the existing Capital Requirements Regulation (CRR) and puts forward recommendations for how they could be addressed. View Article |
Bank of England: Bank capital requirements and balance sheet management practices: has the relationship changed after the crisis?
Authors explicitly consider the impact capital requirements have on banks’ targeted, long-run capital ratios and how banks alter lending supply, balance sheet size, asset portfolio risk and regulatory capital levels in attempt to meet such targets. View Article |
Bank of England: The PRA’s approach to supervising liquidity and funding risks
This supervisory statement sets out the Prudential Regulation Authority’s approach to supervising liquidity and funding risks. It is addressed to firms to which CRD IV applies. View Article |
EP Economic Governance Support Unit: Third-country equivalence in EU banking legislation
This briefing gives an overview of existing equivalence clauses in some key EU banking and financial legislation and of equivalence decisions adopted by the European Commission to date. View Article |
EBA publishes final draft technical standards on cooperation and exchange of information for passporting under PSD2
The technical standards will ensure that information about payment institutions and e-money institutions that carry out business in one or more EU Member States is exchanged consistently between the national authorities of the home and host Member States. View Article |
EPC: Publication of two documents providing guidelines on cryptography and key management, and requirements on privacy shielding for PIN ent
The European Payments Council published two updated documents useful for payment services providers and their technical suppliers, in particular professionals dealing with payment security issues. View Article |
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Securities |
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Capital markets union: Presidency and EP reach deal on prospectus rules
The presidency reached a provisional agreement with representatives of the European Parliament on new rules on prospectuses for the issuing and offering of securities. View Article |
Capital Markets Union: Commission welcomes agreement to give companies easier access to capital markets
The European Parliament, the Council and the Commission have agreed on revamped prospectus regulation. The reform was proposed by the Commission as part of its Capital Markets Union Action Plan in order to improve access to finance for companies and simplify information for investors. View Article |
European Parliament: Securitisation: diversifying funding and releasing bank lending to real economy
Securitisation needs to be made more reliable by aligning the interests of all market players and developing simpler and transparent structures that enable investors to understand the risks, said ECON MEPs in a resolution. View Article |
AFME comments on STS securitisation vote: Europe risks losing a vital financing tool
If key provisions of the Parliament’s compromises are not significantly recalibrated then all securitisation will become prohibitively burdensome in Europe, the STS framework is likely to fail and securitisation as a whole will not be able to provide much-needed funding to the real economy. View Article |
Finance Watch: Glass half full on STS securitization package
The agreement reached by the ECON Committee on the STS securitisation package is a glass half full: it contains some minimum improvements but misses some of the key lessons from the financial crisis, in Finance Watch opinion. View Article |
ECB: Eurosystem introduces cash collateral for PSPP securities lending facilities
The Governing Council decided that Eurosystem central banks will have the possibility to also accept cash as collateral in their PSPP securities lending facilities without having to reinvest it in a cash-neutral manner. View Article |
December 2016 BIS Quarterly Review: Delving deeply into currency and derivatives markets
The December BIS Quarterly Review finds that differences in the regulations applying to different classes of derivatives partly explain why central clearing has become more entrenched in OTC interest rate derivatives markets than in other OTC markets View Article |
BIS: The changing shape of interest rate derivatives markets
The authors Torsten Ehlers and Egemen Eren analyse recent developments in over-the-counter interest rate derivatives markets using the results of the 2016 BIS Triennial Central Bank Survey. View Article |
BaFin plans to limit CFD trading
In order to protect retail investors, the German Federal Financial Supervisory Authority intends to limit the marketing, distribution and sale of financial contracts for difference (CFDs). View Article |
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Insurance |
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European Council: 'PRIIPs' rules delayed by one year
The Council adopted a regulation postponing the application date of rules on packaged retail and insurance-based investment products (PRIIPs) by 12 months. View Article |
Bruegel: European insurance union and how to get there
What are the arguments for and against centralisation of insurance supervision? What would be the scope of a possible insurance union, and what would the legal basis be? How rapid should the move to insurance union be? This Policy Brief sets out to answer these questions. View Article |
EIOPA starts the Solvency II review by consulting on the Solvency capital requirement standard formula
The EIOPA published a discussion paper on the Review of Specific Items in the Solvency II Delegated Regulation focusing on the SCR standard formula. The Discussion Paper is EIOPA’s first step in the preparation of its response to the Call for Advice received from the EC in July 2016. View Article |
EIOPA addresses key financial stability risks
The December 2016 Financial Stability Report presents the evidence that the European macroeconomic environment remains fragile, while insurers and pension funds are challenged by prolonged low interest rates and by a number of geopolitical risks. View Article |
Insurance Europe: Concerns raised on Commission proposal for an EU services card
Insurance Europe has written a joint letter to the European Commission to express concerns about aspects of its anticipated legislative proposal for an EU services card. View Article |
EIOPA publishes guidelines on facilitating an effective dialogue between insurance supervisors and statutory auditors
The Final Report includes an overview and summary of the main conclusions of the Public Consultation, including the full final Impact Assessment, as well as the Comments and Resolutions Template. The Guidelines will become applicable by 31 May 2017. Earlier application is encouraged. View Article |
Insurance Europe: Support for conclusion of EU/US covered agreement talks reiterated
Following the recent round of negotiations between the EU and the US on a bilateral deal on (re)insurance, Cristina Mihai, head of international affairs and investments at Insurance Europe, supported the motion for an agreement. View Article |
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Asset Management |
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Occupational pension funds: Council adopts new rules
The Council adopted a directive on institutions for occupational retirement provision (IORPs), aimed at facilitating their development and better protecting pension scheme members and beneficiaries. View Article |
EFAMA welcomes final Money Market Funds deal
A political agreement reached on the Money Market Fund Regulation was signed-off by the Council of Ministers in a meeting of EU Ambassadors (COREPER) and by the European Parliament’s ECON Committee. These votes followed an original proposal by the European Commission in September 2013. View Article |
PensionsEurope position paper on the EC's code of Conduct for relief-at-source from the withholding tax procedures
The obstacles with the withholding tax refund processes pose a major barrier to cross-border investments in the EU and to build the CMU. In order to boost the economic growth, PensionsEurope calls to remove all the withholding tax barriers to cross-border investments. View Article |
Investment & Pensions Europe: Industry experts call for consolidation in UK pension system
‘Collaboration’ is fast becoming the UK pension sector’s new buzzword – but it could take legislative action before meaningful change is delivered for private sector schemes, according to experts. View Article |
Hedgeweek: Institutional investors turning to active management in 2017, says Natixis
World political and economic events could push the level of market volatility higher in 2017, with institutional investors turning to active management and alternative assets to manage risk and boost returns as a result, according to a study by Natixis Global Asset Management. View Article |
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Corporate Governance/Accounting |
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Shareholders' rights in EU companies: Presidency strikes deal with Parliament
The EU's committee of permanent representatives (COREPER) endorsed an agreement between the Slovak presidency and European Parliament representatives to strengthen shareholders engagement in big European companies. View Article |
EFRAG: Endorsement Advice on amendments to IFRS 2
EFRAG has completed its due process regarding Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) and has submitted its Endorsement Advice Letter to the EC. View Article |
IASB: Minor changes to IFRS Standards
The IASB has issued several amendments to IFRS Standards and an Interpretation that clarifies the requirements in particular Standards. These changes are part of the IASB’s process to maintain IFRS Standards. View Article |
Accountancy Europe response to EFRAG’s assessment on applying IFRS 9 with IFRS 4
Accountancy Europe published its response to EFRAG’s assessment on applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts: amendments to IFRS 4. View Article |
Bank of England: IFRS 9: changes to reporting requirements
This consultation sets out the PRA’s proposed changes to regulatory reporting requirements arising from the introduction of IFRS 9 from 1 January 2018. The proposals affect firms’ existing reporting requirements for credit quality, including arrears and impairments. View Article |
Accountancy Europe: Response to EFRAG´s consultation on the endorsement of IFRS 16 Leases
The Federation of European Accountants commented on EFRAG’s Preliminary Consultation Document to assist constituents to participate in the development of its endorsement advice on IFRS 16 Leases to the EC. View Article |
Bank of England: Financial statements - responses to Chapter 3 of CP17/16 - PS36/16
This PRA PS provides feedback on responses to the financial statements (balance sheet and statement of profit or loss) proposals in Chapter 3 (paragraphs 3.1-3.18) of Consultation Paper on Regulatory reporting of financial statements, forecast capital data and IFRS 9 requirements. View Article |
IASB's Hoogervorst: IASB Chairman spoke at the 6th Symposium on Accounting Research
IASB Chairman Hans Hoogervorst cautioned against seductive arguments for greater stability in reported financial performance. View Article |
Accountancy Europe: The FEE takes on a new identity
7 December 2016 marked both the 30th anniversary of the European organisation for accountants, auditors, and advisors its change of name to Accountancy Europe. View Article |
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Financial Services Policy |
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ECB contribution to the European Commission’s consultation on the review of the EU macroprudential policy framework
The European Central Bank welcomes the consultation on the review of the EU macroprudential policy framework and underscores the importance of macroprudential policy as a complement to monetary policy and microprudential policy. View Article |
Hedgeweek: FMSB issues guidelines on surveillance and training in wholesale markets
Using automated voice surveillance systems and surveillance techniques involving Natural Language Processing are among the emerging practices being used to combat the risk of insider dealing and market manipulation, according to new guidelines from the FICC Markets Standards Board (FMSB). View Article |
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Graham's tweets |
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© Graham Bishop
Banking