Welcome to our Friends weekly e-mail.
Highlights of my week: After all the excitement, the “von der Leyen II” Commission will take office on 1 December! The new President of the European Council also takes office so the EU institutions are now renewed for five years and can get down to business - and there is much in the in-tray. However, the first crisis could be in France where government bond yields are just about to exceed Greek levels – unthinkable just a few years ago. (As an amusing aside, an LSE blog demonstrates that the more EU negotiations take place in public, the more the actual deals are struck in the privacy of the lunch break!) The Commission’s consultation on the regulation of non-bank financial institutions (NBFI) continues to stir strong feelings - especially from the insurance industry. IOSCO published two papers – showing commodities exchanges still face significant challenges in understanding customer positions, and highlighting the concentration of post trade risk reduction services for derivatives. GRI trumpeted that its standards are increasingly being used by major companies, especially as they are now interoperable with ESRS. The UK government consulted on whether it should launch its own ‘green taxonomy’ – the market reaction to the relevance will be interesting.
Graham Bishop
Articles from 22-28 November 2024
Policy impacting Finance
Parliament approves the “von der Leyen II” Commission : Second von der Leyen Commission approved by 370 votes for, 282 against, 36 abstentions; College of Commissioners expected to take office on 1 December; MEPs to monitor Commission commitments for the next five years View Article
EURACTIV 's Bourgery-Gonse: The Brief – Inside Queen Ursula’s brand-new castle : She and the EPP’s top man Manfred Weber outmanoeuvred their coalition partners after a week of nail-biting political negotiations.The EP may have given Ursula von der Leyen’s college of commissioners a nod with a timid margin, but don’t be fooled: ‘Queen Ursula’ has more power than ever before. View Article
Parliament: EU budget 2025: restoring Council’s cuts, reinforcing key EU programmes and managing borrowing costs : Next year’s EU budget signed into law by European Parliament’s President Metsola;Over €230 million added for key programmes aimed at improving people's lives, boosting competitiveness, and addressing current challenges;Total budget for 2025 is €199.4 bn in commitments, payments at €155.21 bn; View Article
ECB President Lagarde: Follow the money: channelling savings into investment and innovation in Europe : CMU lies at the centre of all these challenges. It is key for making our economy more dynamic and technologically advanced. While banks play an essential role in the European economy, we know that integrated capital markets are needed for financing early-stage, breakthrough innovation. View Article
POLITICO: France is approaching a moment of humiliation in financial markets as budget chaos mounts : Investors appear ready to declare the country a worse credit risk than Greece. View Article
EBF Position Paper on the Recommendations to Optimize EU Financial Instruments/Budgetary Guarantees and EU Promotional Policies : The European Banking Federation (EBF) has published a position paper calling for improvements to EU financial instruments and budgetary guarantees to better support the green and digital transitions of the European economy. View Article
CEPR's Giupponi,Seibold: Rethinking pension reform: A new CEPR eBook : Population ageing is exerting unprecedented fiscal pressure on social security systems around the world. In response, many governments are implementing or planning pension reforms, often aimed at encouraging later retirement. View Article
Assessing the Debt Sustainability Analysis Methodology in the EU’s New Economic Governance Framework : The new EU Economic Governance Framework requires that the projected general government debt-to-GDP ratio of member States, if not already below 60% of GDP, is put or remains on a plausibly downward path over the medium term. View Article
LSE's Kleine,Huntingdon: How lunch breaks reduce transparency and help EU leaders reach agreement : Lunch breaks during meetings have become an increasingly important setting for confidential discussions between EU leaders. These discussions make it easier to reach agreements, they raise critical questions about the trade-off between transparency and confidentiality in EU and global governance. View Article
Banking Union
SRB puts focus on testing in its 2025 work programme : The 2025 work programme, complementing the SRB Multi-annual Plan, concentrates on three strategic areas: core business; governance, organisation and tools; and human resources. View Article
SSM's McCaul:Objects in the rearview mirror are closer than they appear : As my mandate as ECB Representative to the Supervisory Board comes to an end, I would like to reflect on the evolution of the SSM and give my perspective on the changing financial and political landscape in which banks operate. View Article
EBF: European banks: Financing a competitive and thriving Europe : The European banking sector has shown resilience and contributed to financial stability throughout the economically tumultuous period of the last five years. The future growth outlook remains clouded by uncertainty about economic policies and the geopolitical landscape, as outlined by the ECB. View Article
Capital Markets Union
ESMA responds to the European Commission consultation on Non-Bank Financial Intermediation (NBFI) : In its response to the consultation, ESMA makes key proposals in several areas... View Article
ALFI responds to the EC consultation on assessing the adequacy of macroprudential policies for non-bank financial intermediation : On 22 May 2024, the European Commission launched a consultation on assessing the adequacy of macroprudential policies for non-bank financial intermediation. View Article
InsuranceEurope: Insurers oppose EC plans for further regulation : EC considering new framework to oversee macroprudential risks facing non-bank financial institutions View Article
ESMA announces further guidance on exclusion criteria for the selection of Consolidated Tape Providers : The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, is clarifying details for some of the documents that future applicants will be expected to provide when participating in the selection process for Consolidated Tapes Providers (CTPs). View Article
IOSCO:Targeted Implementation Review on Principles for the Regulation and Supervision of Commodity Derivatives Markets : Results of the surveys show that the majority of respondents were broadly compliant with the Selected Principles. However, both regulators and exchanges identified significant challenges in implementing certain elements of the Selected Principles within OTC markets. View Article
IOSCO: Final Report on Post Trade Risk Reduction Services: Sound Practices for Consideration : PTRRS offerings have evolved over the recent years with counterparty risk optimisation emerging more recently. Despite the increasing use and the evolving nature of PTRRS, there remains a limited number of firms that offer PTRRS globally. View Article
GFIA publishes its 2023-2024 Annual Report : GFIA has published its Annual Report, which includes a series of articles touching upon some of the key policy areas impacting the world’s insurance industry today. View Article
Environmental, Social, Governance (ESG)
GRI-ESRS Interoperability Index publishes – plus new Academy course : As the next step in a cooperation between GRI and EFRAG, the body mandated to deliver the European Sustainability Reporting Standards (ESRS), organizations can now download the official Interoperability Index of the GRI Standards and the ESRS. View Article
GRI global adoption by top companies continues to grow : GRI Standards lead the way for sustainability reporting in all global regions. Sustainability reporting around the world by major companies is now ‘business as usual’, with nine-in-ten of the companies that do report choosing to use the GRI Standards, according to a comprehensive new survey. View Article
BIS' Noss, Songwe, Yong: The rising tide of climate finance - scope to adjust prudential treatment : A key question arises: how can policymakers and regulators develop frameworks and policy measures that support financial institutions' involvement in climate finance while still addressing the risks posed by those activities on their safety and soundness? View Article
Finance Watch's Philliponnat:The cost of action and the cost of inaction: genuinely incorporating the environment into the budget debate : The budget debate must move beyond outdated fiscal constraints and address the cost of action versus inaction on climate change. Investing now in adaptation and mitigation is not just a necessity for the planet but also a financial imperative to avoid economic and social collapse. View Article
IFAC Recognizes and Supports IAASB’s Newly Published Sustainability Standard; : Warns of Risk to Investor and Consumer Protections If All Assurance Providers Are Not Held to Consistent Requirements View Article
IIGC's Alipranti: From COP29 to Mansion House, has the UK reclaimed climate leadership? : A wave of recent domestic and international announcements signal serious intent from the new government to make the UK a clean energy superpower and green finance capital. Will they be enough to cement leadership status? View Article
Fin Tech Regulation
FCA's Long:Developing our approach to crypto regulation : Earlier this year, we held a series of roundtables to gather views that can help shape how we approach regulating specific areas of crypto. View Article
Brexit and the City
IPE's Robinson-Tillet: UK government consults on green taxonomy : The UK government is asking for feedback on whether it should create a taxonomy to support investment into the climate transition and clamp down on greenwashing. View Article
City Corporation unveils essential guide for global businesses eyeing UK expansion : The City of London Corporation has partnered with the global law firm Hogan Lovells to develop a straightforward introductory guide on how navigate the UK’s regulatory environment and seek authorisation by UK’s financial regulators to encourage financial services businesses to expand in the UK. View Article
PRA and FCA publish consultation on pay for senior bankers : The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have today set out plans to reduce the restrictions on bonuses of senior bankers. View Article
CITY AM's Mucklejohn: FCA ‘strengthens’ internal whistleblowing policy after backlash : An all-party parliamentary group said on Tuesday that the FCA’s treatment of both internal and external whistleblowers was “alarming”. View Article
Brexit
UK-EU Divergence Tracker Q2-Q3 2024 : This tracker is the first since the new Labour government took office, and there are already signs of a markedly changed approach to managing divergence. View Article
Bruegel's Bercero: A trade policy framework for the European Union-United Kingdom reset : A reset in the relationship between the UK and the EU is underway. This paper recommends the main elements of the reset in terms of trade. View Article
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