Stephen Wallace | Finance 20/20
Posts by: Stephen Wallace
Joint Committees of ESAs Recommend Action to Address Risks and Uncertainties in EU Financial System
On September 11, the Joint Committee of the ESAs published a report on the risks and vulnerabilities in the EU financial system (JC 2018 34), which sets out recommendations for policy action. The report can be found here.
The report states that in the light of ongoing risks and uncertainties, especially those around Brexit, supervisory vigilance and co-operation across all sectors remains key. As a result, the ESAs advise the following policy actions by financial institutions and by EU and national competent authorities:
Stress tests. Stress test exercises should continue to be conducted and developed further across all sectors, especially given rising interest rates and the potential for sudden risk premia reversals, which should be factored into the scenarios.
Risk appetite. Supervisory authorities need to pay continued attention to the risk appetite of all market participants. Banks should accelerate addressing their stocks of non-performing loans (NPLs) and adapt business models to sustainably improve profitability, and financial institutions need to carefully manage their interest rate risk.
Contagion risks. Macro and micro prudential authorities should contribute to addressing possible contagion risks, including continuing their efforts in monitoring lending standards.
Brexit. It is crucial that EU financial institutions and their counterparties, as well as investors and retail consumers, plan appropriate mitigating actions to prepare for the UK’s withdrawal from the EU in a timely manner, including the risks associated with a no-deal scenario.
Posted in Europe, Industry Developments	Tagged ESAs, NPLs	
European Parliament Votes to Adopt Resolution on Regulatory and Supervisory Relationships between EU and Third Countries
On September 11, the European Parliament voted in plenary to adopt a resolution on relationships between the EU and third countries concerning financial services regulation and supervision (2017/2253(INI)). It has published the minutes of the vote, found here, and a provisional edition of the resolution, found here.
The resolution was set out in a report prepared by rapporteur Brian Hayes that was adopted in July 2018 by the European Parliament’s Committee on Economic and Monetary Affairs (“ECON“).
The resolution contains recommendations relating to the equivalence framework in financial services legislation. In particular, it recommends that third countries should keep the European Supervisory Authorities (“ESAs“) (that is, ESMA, EIOPA and the EBA) informed of any national regulatory developments through the EU’s equivalence framework and that the Commission should introduce a standardised process for the determination of equivalence.
Posted in Europe, Industry Developments	Tagged ECON, ESAs	
OJ Publishes Implementing Regulations Supplementing the BMR
Stephen WallacePosted on August 20, 2018
Two Implementing Regulations supplementing the Benchmarks Regulation ((EU) 2016/1011) (“BMR“) have been published in the Official Journal of the EU (“OJ“). READ MORE →
Posted in Europe, Industry Developments	Tagged BMR, Official Journal of the EU	
Regulation on European Crowdfunding Service Providers Draft Published by ECON
On August 13, 2018, the European Parliament’s Economic and Monetary Affairs Committee (“ECON“) published its draft report on the European Commission’s proposal for a Regulation on European crowdfunding service providers (“CSPs“). The report is available here. READ MORE →
Posted in Europe, Industry Developments	Tagged CSPs, ECON, ICOs, NCAs	
CB:PSB Issues Guidance to Support Implementation of Advanced Standard for Top Bankers
In the UK, guidance to support the implementation of advanced standards for professional bankers was published on August 15, 2018. The guidance is available here. The guidance is in fact dated January 2018, the same date as the advanced standard which was published in May 2018. READ MORE →
Posted in Event, Industry Developments	Tagged Chartered Banker Professional Standard Board's	
Benchmarks Regulation Q&As Updated by ESMA
On July 17, 2018, The European Securities and Markets Authority (“ESMA“) published an updated version of its Q&As on the implementation of the Regulation on indices employed in financial instruments and financial contracts or to measure the performance of investment funds ((EU) 2016/1011) (Benchmarks Regulation or BMR) (ESMA70-145-11, version 8).
Two key amendments include the definitions of calculation agent and regulated data benchmark.
The Q&As were first published by ESMA in July 2017 and were previously updated in May 2018.
Posted in Industry Developments	Tagged Benchmarks REgulation, European Securities and Markets Authority, Q&As	
Provision of Microcredit in Europe: Commission to Update European Good Code of Conduct
The European Commission (Directorate-General for Employment, Social Affairs and Inclusion) published a press release informing readers that it is updating the European good code of conduct for microcredit provision. The publication can he found here.
Originally launched in 2011, the code’s aim was to provide a common set of standards relating to management, governance, risk management, reporting and consumer and investor relations for the EU microfinance sector.
The purpose of the update is to reflect market changes and the diversity of the microfinance sector. The updates are expected to be in place over the next 12 months.
Posted in Europe, Industry Developments	Tagged European Commission, microcredit	