Graham Bishop’s Post

Want to read the articles that underlie these brief comments? Subscribe at www.grahambishop.com   Highlights of my week: In the past four months, the governments of #France and #Germany have been dramatically weakened whilst radical change has happened in the #UK and #US. So today’s European Political Co-operation #EPC meeting in #Budapest will confront a very different picture from that at the #BlenheimPalace meeting in July. Meanwhile…the #Commissioner hearings continue in #Brussels and Maria #Albuquerque seems to have clinched the finance role with a solid performance. However, she did commit to even more collaboration with the Parliament – a further uptick in its effective powers. #Eurogroup reviewed the stability of the financial sector with positive reports from both #SSM and #SRB – though deposit insurance remains a well-known but still open weakness. The tenth anniversary of `single banking supervision’ was celebrated in #Frankfurt with strong re-affirmations of the benefits of pan-#EU banks and the independence of the #ECB in this field as well as monetary policy – though #UniCredit’s bid for #Commerzbank was carefully not mentioned! #Council signed off on amendments to #SolvencyII and #IRRD, as well as an updated statistics regulation. #ESMA brought two more entities under its direct supervision. The imminence of #COP29 triggered more progress reports on the financial sector’s impact on green financing – #EIOPA reported that taxonomy-aligned investments are now up to 4.5% of insurers’ assets. #Council agreed a package of #VAT changes to bring it into the digital age. The #UK’s #FCA enhanced access to market data and investment research – welcomed by both #AFME and #ICMA.

Want to read the articles that underlie these brief comments? Subscribe at www.GrahamBishop.com Highlights of my week: The European Council #EUCO issued another grand declaration about taking decisive steps to achieve #SIU and #CMU but implementation will require a functioning #EuropeanCommission. That prospect may now be receding into 2025 as the #EuropeanParliament seemed to reach deadlock on the political balance of new Commissioners after the Hearings. The context is the rise of the far right and now – even worse – the personnel choices of #Trump 2.0 for his new government. However, there was good news to be celebrated – 10 years of “European banking supervision” #SSM. But not all problems have been `resolved’ – the lessons from 2023 about the difficulties of bank resolution are still emerging from the #FSB and think tank #SUERF. One of #Schuman’s famous `concrete steps’ was taken by #Euronext in proposing a single prospectus document – in English – for its seven exchanges to simplify capital raising in the #EU. #COP29 is not over yet, but #ECB President #Lagarde warned of the growing gap between climate commitments and actual investment cash. Good news from #IFRS and #IAASB: corporate climate disclosures are progressing but – bad news – #ACCA reports that only 20% of businesses are prepared for climate disasters. Both #SSM and #FCA are focussed on banks’ cyber resilience but #BEUC reports that #DMA obligations remain an issue for #Apple, #Alphabet/Google and #Meta.

Want to read the stories underlying these brief comments? Subscribe at www.GrahamBishop.com   Highlights of my week: #ECOFIN had a crowded agenda and dealt with a wide range of topics including: #Withholding axes; #VAT in the digital age; Recovery and Resilience Facility#RRF; #Ageing; #Financialliteracy; #Financialservices; Climate coalition. However, this author participated in the #GiovanniniGroup in 1999 that identified withholding taxes as a key barrier to an effective single market in investing. The new plan is to become fully effective by 2030 so the Member States’ commitment to achieving that part of the #singlemarket/#CMU remains questionable. Nonetheless, the fund management industry welcomed the news of this belated progress. Global supervisors (#GHOS) continue to push full implementation of Basel III while Bank of Greece Governor #Papaconstantinou laid out the key lessons from the #GFC and called for “more Europe”. President #Macron had already called for French banks to be involved in transforming Europe’s banking landscape. #IOSCO welcomed proposals from the accountants’ ethics standards board  (#IESBA) for new standards in #ESG – just as #ESMA published guidelines on fund names that purport to be ‘sustainable’. #Financialliteracy was put in the spotlight by both #Council and the #OECD.

Want to read the articles that underly these comments? Subscribe at www.GrahamBishop.com   Highlights of my week: The flow of ideas for the next mandate of the #EU institutions continues. Internationally, the #G7 Finance Ministers/Governors called for attention to the remaining vulnerabilities in the financial system and the #CPMI set out a work programme that will be focussed on the financial infrastructures. Nobody seems to think the wave of financial regulatory activity in the last two decades has reached its end point! The #SSM has decided to update #SREP – the most detailed inquisition of banks’ health – but #EBA reported that the funds available to support failing banks are still rising. #ESG issues remain central as the #ECB’s #Cipillone warned that current policies will fail to produce “net zero by 2050”. However, the financial sector has a major role to play and the new #ISSB standards have attracted supporting legislative efforts from more than half the global jurisdiction – though not yet the #US or #UK and the #EU was the first adopter. Despite much criticism of it, #ProjectSyndicate's #Frankel came to the support of Europe’s Carbon Border Tax, arguing that the #CBAM may be the best chance the world has. #Brexit has gone quiet for the moment as the #UK’s General Election got underway and the two biggest parties try hard not to talk about the substance of the “elephant in the room” despite pressure groups trying to push for closer relations with the #EU. #FBPE

We will take a short break over Easter and the next edition will be published on 11 April. Want the detailed stories underlying these comments? Subscribe at www.Grahambishop.com)   Highlights of my week: The #EuroSummit accepted the call from #Eurogroup to urgently speed up the creation of the #CMU - with no shortage of advice on concrete measures to boost securitisation from the Joint Associations/#ICMA and #DelorsCentre. #PCS noted – caustically – that expressions of support for this market now seem to outnumber the issuance! The #SSM responded in great detail to the #EuropeanParliament’s comments on its Annual Report – a welcome example of accountability in action. The #BIS analysed supervision and concluded it will not be effective without adequate resources, underlining the importance of the #IMF’s lessons from last year’s bank crisis: intrusive supervision is critical. #ESMA won the prize for pre-Easter holiday `deck clearing’ with a raft of guidelines/comments on #MiFIR etc. The #SSM’s #Elderson spoke in #Brazil about why supervisors have to take climate risk into account while on the other side of the world in #Tokyo, a #UBS banker told the central banks’ Network for Greening the Financial System (#NGFS) that such expectations from civil society are unrealistic given their economic impact. In Brexitland (#FBPE), the #FCA has proposed a watering down of shareholder protections to boost the #UK equity market but both the #InvestmentAssociation (all UK investment institutions!) and #ICGN have pushed back hard on these ideas as being manifestly counter-productive.

Want to read the stories underlying these brief comments? Subscribe at www.GrahamBishop.com Highlights of my week: All the #Commissioners-designate have had #EuropeanParliament’s green light on their “conflict of interest” declaration. Now to the main test: answering the written questions and Financial Services Commissioner #Albuquerque has been asked directly the “#Brexit” question: “Do you think that the recent review of #EMIR will succeed in bringing the clearing business of derivatives denominated in euro to #EU financial centres?” She also has to answer on how she will respond to the #CMU recommendations in the #Draghi, #Letta and #Noyer reports. #UKPrimeMinister #Starmer may also reflect on the #EU response to #Switzerland when considering his “re-set” in relations: The #EU is not an `a la carte’ menu. The flow of technical matters continues unabated: #EIOPA Chair #Hielkema testified to #ECON about the role of insurance and pension funds while the #BIS discussed the liquidity issues from the 2023 banking turmoil. #SSMChair #Buch highlighted that banks’ apparent profitability can conceal underlying, fatal risks. But the biggest technical announcement undoubtedly came from the #EuropeanCommission: the settlement cycle will indeed be shortened to #T+1. There is not yet an explicit timeline but it should be synchronised with the #UK and #Switzerland so #2027 looks likely. Hopefully, the industry’s advice will be taken and a number of long-standing bottlenecks will be swept away at the same time. The Commission rejected two recommendations from the #ESAs and #ESMA on #DORA and #MiCA. The Lord Mayor of the #CityofLondon described #Brexit as a disaster and pointed to the 40,000 finance jobs gained in #EU financial centres rather than in #London. #banks #liquidity #turmoil. #2023

Highlights of my week: Capital Markets Union (#CMU) has suddenly become a very hot topic. The #ELEC paper a few weeks ago set out several concrete steps – especially on securitisation. It is gratifying to see that both the #ECB and #Eurogroup have echoed many of ELEC’s key recommendations. But there is a note of hypocrisy from many #Eurogroup members calling on the #EuropeanCommission to propose actions which have already been done before while knowing they personally will frustrate the resulting proposals. #ECOFIN authorised the Commission to open negotiations with Switzerland that will include “dynamic alignment with #EU rules while the #CityofLondon celebrated the “#Berne Financial Services Agreement” as it moves towards ratification – another #UK trade agreement of great fanfare but probably little substance. Key speakers from the #SSM and #SRB emphasised the resilience of #EU banks but stressed that risks remain – especially in the resolution of trading books. Is there a backlash against #ESG? The #DelorsCentre survey found the risk to be overblown and #SUERF/Bank of Finland found that 60% of retail investor respondents consider #ESG factors. The #EU’s #AIAct was approved but there are quite some doubts about its efficacy. The #EBA published technical, standards for complaints handling for issuers of “asset referenced tokens”. In Brexit-land, immigration may actually have bailed out Chancellor #Hunt while #CER observed that the UK’s fabled trade deals provide only marginal benefits – as the #Tory party gets closer to its moment of reckoning about the “benefits” of #Brexit with voters. #FBPE Want to read the stories that underpin these brief comments? Subscribe at www.GrahamBishop.com

Want to read the stories underlying these brief comments? Subscribe at www.GrahamBishop.com Highlights of my week: Intrigues after the #EP election are in full swing! The big political `families’ are trying to attract non-allied/un-attached #MEPs to their family, or even entire factions to switch. Currently, these re-alignments have moved the right-wing #ECR into third position – potentially increasing their leverage on the top #EU jobs and #EP committee roles. But the “grand coalition” (#EPP/#S&D/#Renew) still holds 56% of the seats. More immediately for financial markets, the Commission and #ECB held their annual Financial Stability and Integration conference after publishing their reports. The stocktake on progress of ##CMU and #bankingunion, together with recommendations for future action, may short-circuit some of the usual delays while the incoming financial service Commissioner goes round that track for his/her first year. Ominously for the #CityofLondon, both #Commission and #ECB re-iterated (and underlined!) their concerns about the financial stability risks of being dependent on #UK clearing services. The #BelgianPresidency continued its push to wrap up as many Council positions as possible before the incoming #HungarianPresidency may face other distractions. #CMDI and simpler financial reporting were ticked off this week. Both #ESMA and #EIOPA published their annual reports for 2023 while the #ESRB re-iterated its concerns about the structural vulnerabilities in all segments of the #NBFI sector. The #ESAs proposed improvements to the sustainable finance disclosure regime and the internal auditors body drew its members attention to (and their responsibility for) implementing the #EBA’s “greenwashing” report.

Want to read the articles underlying these brief comments? Subscribe at www.GrahamBishop.com This will be the last weekly of the summer and we will re-start on 5th September, but will occasionally update the website. Happy Holidays to all our readers! Highlights of my week: The 10th #EuropeanParliament got down to work this week – with the first task of massively re-electing Roberta #Metsola as its President. The second task is currently still underway: listening to Ursula von der Leyen’s #UvL speech applying for a second term as #CommissionPresident, digesting the details in her “#PoliticalGuidelines” and then voting for her (or not) in a secret ballot. In the background, the rows about the #HungarianPresidency rumble on. However, the usual flow of detailed financial regulatory actions continues – ranging from #FSB comments on aspects of cross-border payments; the #EBA’s reflections on how #EU banks actually manage their capital “stacks” and #ESMA’s consultation on order execution policies. The Corporate Sustainability Reporting Directive (#CSRD) should now have come into force in all Member States – raising the question from #ICGN of - yet again - how to assure investors about `greenwashing’ claims. The #UK announced plans to reform its audit watchdog – does the EU need to follow suit? The #ESAs are still clearing their desks ahead of the holidays with a batch of policies, guidelines and consultations on cyber matters. The #UK was dazzled by the splendour of the #King’sSpeech opening the new Parliament with a wide-ranging list of proposed measures – including plans to rebuild relations with the U. Soft diplomacy starts later today with the opening of the European Political Community (#EPC) meeting at #BlenheimPalace – #Churchill’s birthplace.

Want to read the articles that underly these brief comments? Subscribe at www.GrahamBishop.com. Highlights of my week: The #ECB’s Financial Stability Review #FSR found that markets remain exposed to surprises…while the #FSB looked at the risks from short term funding markets. Commissioner #McGuiness launch a consultation on the regulation of Non Bank Financial Intermediaries (#NBFI) as they are now significantly larger than the banking system and #EBA Chair #Campa touched on the same topic at the #BCBS. #ESMA launched its package of 20 recommendations for an effective #CMU and #EURACTIV underlined that the topic is likely to take ‘centre stage’ in the next legislative cycle. #ISDA said that proposed #US capital rules on central clearing could require a sharp increase in capital and crimp US banks’ activities. That would spill over to #Europe so #CEPS paper on finding the right balance in #EU #derivatives clearing was timely. A #SUERF paper found that there was ‘limited evidence’ that banks had actually reduced financing to non-green activities – ‘business as usual’! The #EU enacted its new #AI rules – thereby setting the global benchmark for companies doing any business with the EU. The #UK announced a #GeneralElection surprisingly early despite the polls pointing to a historic defeat - with #ToryMPs falling to possibly a quarter of their current tally. Will that lead to a rapprochement with the EU? Don’t hold your breath! But there could be an end to deliberate divergence as new research now puts the #City’s contribution at 12% of total taxes – not a golden egg to be recklessly broken!