June 23rd: 174th Brussels 4 Breakfast
Why you should
watch: The top agenda item in
Brussels and for our panel is the ESG agenda - particularly the so-called
'taxonomy' and the pilot exercise for stress-testing banks on climate risk (and
not just banks; insurers and corporates will be caught too). Other than that,
our regular panel focused this month on the EU's Next Generation Fund (is it a
'one off' or a sign of the Commission's ambitions?), CMU (has the pandemic
pushed it down the agenda?), the CCP stress tests (and what they say about
Commission movies to shift clearing houses out of London), Germany's continued
opposition to central banks stuffing themselves with home country debt (that's
you, Italy), and the latest opinion polls in the UK indicating that (whatever
they now think of Brexit) a majority is in favour of staying out.
Moderators: Andrew Hilton
(Director, CSFI)
Panellists:
Graham Bishop is one of the UK's leading commentators on EU financial
regulation. He is also chairman of the National Council of the European
Movement, and was, for many years, senior European bond analyst at Citigroup
Andreas Dombret is a former Executive Board Member at the Bundesbank, responsible
for banking and financial supervision. He is also a former Board member at the
BIS, a former Vice-chairman of BofA's investment bank for EMEA, and a
former partner at Rothschild & Co. Currently, he is Chairman of
Houlihan Lokey (a Los Angeles-based investment bank) for Germany, Austria
and Switzerland, a senior adviser to Oliver Wyman and Sumitomo Mitsui, and
an adjunct scholar at Columbia. He is also an honorary professor at ESB
University in Wiesbaden.
Pablo Portugal is a managing director at the Association for Financial
Markets in Europe (AFME), where he is responsible for regulatory developments
and advocacy across Europe in banking and financial markets. He is also a Board
member of the European Capital Markets Institute.
GrahamBishop.com provided a rich list of topics for the
meeting - but of course we were not able to discuss them all as we ran
out of time - as usual!
Brexit: Curtice opinion poll: now Remain 53%,
Leave 47% BUT Rejoin 48%, Stay out 52%; Reuters: Britain takes step to
classifying 'green' investments: Britain has set up a group of experts to help
it classify climate-friendly assets; City of London Corporation: Data,
Direction, Dialogue: UK and US have an opportunity to collaborate; Bloomberg: ECB Probes Whether Goldman, Peers
Still Too Tied to London: ECB concerned
about reliance on back-to-back booking model
General: Switzerland breaks off talks with EU;
Commission set to borrow €80billion this year and first issues 10 time
over-subscribed; Tax transparency deal approved – country-by-country reporting
Banking: POLITICO: Germany says nein to
eurozone banking safeguards; Non-Performing Loans (NPLs): Co-legislators agree
on new rules in order to improve market transparency; FSB seeks feedback on its
proposals for quantitative targets for enhancing cross-border payments
Capital Markets Union: ESMA launches 2021
Central Counterparties Stress Test; DG FISMA: Staff working document –
Monitoring progress towards a capital markets union: a toolkit of indicators; ESMA
responds to European Commission consultation on the ESAs
Insurance: Reuters: The European Commission
said it is too early for a cross-border pandemic insurance scheme to fill the
gap left by insurers following the outbreak of Covid-19
ESG: EBA publishes results of EU-wide pilot
exercise on climate risk; FT van Steenis: Investors should prepare for impact
of green stress tests on banks; Sustainable corporate governance - Continuing
flow of comments on Taxonomy Article 8; Eurosif expects new EU sustainable
finance strategy at the start of July
Digital: European Commission’s proposal of a
Digital Markets Act – EBF Key messages; Commission proposes a trusted and secure
Digital Identity for all Europeans; CER: Can the EU set a global rulebook for
Big Tech?
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June 4th: Financial Services Club/ZYen video with Alderman Mainelli and
Graham Bishop: Brexit: Ending the City's Dominance of European Finance?
How might this play out by say 2024? Could the divergence cause
the end of the City’s dominance of European finance? It might well do.
The future of the financial services industry – centred in the City
of London – matters enormously to the health of the United Kingdom’s
economy. The Trade and Co-operation Agreement (TCA) has few provisions
on financial services and the UK now appears set to drive a wedge
between EU and British rules so it can “benefit” from its new-found
Brexit freedom. In reality, this “wedge” is unlikely to benefit the
economic prospects of the City or the United Kingdom.
There can be
no doubt that the EU will use the “autonomy of its decision-making
process” – as stressed in the TCA. If the UK wishes to row alongside the
EU super-tanker and “take” its rules, then the UK will remain
“equivalent”. But current UK policy intentions suggest there will be an
ever-widening gulf by the end of this Commission’s term in 2024 – as the
logical outcome of UK policy. The internationally mobile financial
services industry will undoubtedly take account of this probability in
planning the location of future business opportunities.