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Welcome to our Friends weekly e-mail.Highlights of my week: ECOFIN had a crowded agenda and dealt with a wide range of topics including: Withholding taxes; VAT in the digital age; Recovery and Resilience Facility; Ageing; Financial literacy; Financial services; Climate coalition. However, this author participated in the Giovannini Group 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 single market/CMU remains questionable. Nonetheless, the fund management industry welcomed the news of this belated progress. Global supervisors 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 for new standards in ESG – just as ESMA published guidelines on fund names that purport to be ‘sustainable’. Financial literacy was put in the spotlight by both Council and the OECD. Graham Bishop Articles from 10-16 May 2024
Policy impacting Finance Economic and Financial Affairs Council, 14 May 2024 - Main Results : Topics included: Withholding taxes; VAT in the digital age; Recovery and Resilience Facility; Ageing; Financial literacy; Financial services; Climate coalition View Article
Statement by the Eurogroup President on the follow-up to the Eurogroup agreement on the future of the Capital Markets Union : The Eurogroup agreed on a statement on the future of CMU in March and yesterday we took the first step towards its delivery. The endorsement by EU leaders at the Euro Summit and the subsequent discussion at the European Council have confirmed the timeliness of the priorities we have agreed. View ArticleCEPR's Claessens: Non-bank financial intermediation: Research, policy, and data challenges : Research has documented the benefits ... But non-bank financial intermediation comes with its own risks relating to interconnections and interactions between liquidity and leverage. View Article
POLITICO: Britain’s next financial crash is coming. This time it won’t be the banks. : Since the 2008 global financial crisis, regulators fear that the part of the financial system that sits outside of banks has absorbed all the risk. View Article
EURACTIV: NextGenEU vital to bloc’s future competitiveness, stresses Eurogroup chief Paschal Donohoe : The EU’s multibillion pandemic recovery fund is the key “piece in the jigsaw” of how to finance the bloc’s core economic objectives until private markets are sufficiently integrated, Eurogroup President Paschal Donohoe told Euractiv in an interview. View Article
CER's Springford: Europe must choose: Multiculturalism or stagnation? : An increasingly multi-ethnic society would safeguard Europe’s prosperity – or it can opt for nativism, labour shortages and higher taxes. View Article
Banking Union Governors and Heads of Supervision reiterate commitment to Basel III implementation and provide update on cryptoasset standard : The Basel Committee's oversight body welcomes progress made in implementing Basel-III; Reiterates expectation to implement all aspects of the Basel Framework in full, consistently and as soon as possible; Sets updated implementation timeline for the cryptoasset standard to 1 January 2026. View Article
SSM's Buch: Written overview ahead of the exchange of views with the Eurogroup on 13 May 2024 : Over the past decade, European banks have strengthened their financial positions and resilience. Changes in the external macroeconomic environment and new risks require a forward-looking risk assessment and a continued focus on resilience. View Article
SSM/Bank of Greece's Papaconstantinou:“We need more Europe” : View ArticleCEPR: How zero-risk weights on sovereign debt can lead to capital misallocation : by Fueki/Hürtgen/Walker: This column argues that the zero-risk weight policy leads to capital misallocation and a significant reduction in household welfare. View Article
SRB publishes 2024 MREL policy and latest MREL dashboard : The 2024 MREL policy: revised approach on internal and external Market Confidence Charge calibration; monitoring of MREL eligibility. It also reflects the legislative changes on the MREL framework related to entities in a “daisy chain” and to liquidation entities introduced by Directive 2024/1174. View Article
Bloomberg: Macron Puts French Banks in Play With Plan to Transform Europe : The French President signals he’d be open to cross-border bank M&A as he sets out the case for a transformative shift in the continent’s economic model View Article
Capital Markets Union EIOPA: Insurance Risk Dashboard flags market risks for insurers amid market volatility and declining real estate prices : It shows that risks in the EU’s insurance sector are stable and overall at medium levels, with pockets of vulnerabilities stemming from market uncertainty and potential risks in the real estate sector. View Article
Insurance industry calls on European Commission to deliver Solvency II deal : Insurance Europe has written to the Commission on the importance that technical negotiations of the Solvency II review stay aligned with the political agreement and EU goals on climate change, financing the green and digital transitions, the Capital Markets Union and increasing competitiveness. View Article
Environmental, Social, Governance (ESG) IOSCO welcomes IESBA’s consultation on the Proposed International Ethics Standards for Sustainability : IOSCO today congratulated the International Ethics Standards Board for Accountants (IESBA) on publishing for consultation their Proposed International Ethics Standards for Sustainability Assurance (IESSA) and Other Revisions to the Code Relating to Sustainability Assurance and Reporting. View Article
IFRS: Webcast: Introducing the ISSB Taxonomy : In this webcast, ISSB Vice-Chair Sue Lloyd and ISSB Technical Staff Tim Kasim introduce the ISSB Taxonomy, its key features and the benefits for investors, companies and regulators. View Article
ESMA Guidelines establish harmonised criteria for use of ESG and sustainability terms in fund names : The objective of the Guidelines is to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names, and to provide asset managers with clear and measurable criteria to assess their ability to use ESG or sustainability-related terms in fund names. View Article
Accountancy Europe's Ceder: Cyber security: the next frontier for reporting : Cyber incidents are happening frequently, but they are often not reported? Indeed, according to the World Economic Forum’s 2024 risk report, cybersecurity is ranked as the fourth largest material risk for businesses on a 2-year horizon...but extreme climate events rank as the second biggest risk. View Article
GRI: One-in-four major companies report with GRI Tax Standard : New research finds 26% of the 1,000 largest public companies worldwide are voluntarily using the GRI Tax Standard in their sustainability report, while policymakers and influential stakeholders are increasingly looking to GRI 207: Tax 2019 when articulating tax transparency expectations. View Article
Bankenverband's Neuman/Schwantes: 3 questions, 3 answers: ESG risk management : Nowadays, sustainability risks in the three areas of environmental, social and governance – or ESG for short – have become an integral part of banks’ risk management. After all, one of the main tasks of a bank is to quantify and manage risk. And ESG risks are no exception. View Article
Protecting Customers Capital markets Union: Council approves conclusions on financial literacy : The conclusions aim to give guidance to the Commission and the member states on how to improve citizen’s knowledge and understanding of finance, in order to help them make more informed financial choices and to encourage them to invest on European financial markets. View Article
OECD/INFE survey instrument to measure digital financial literacy : The OECD Recommendation on Financial Literacy recognises that new financial products and services,including digital financial services, may change the way in which consumers make financial decisions and product choices (OECD, 2020[1]). View Article
Fin Tech Regulation finextra: ECB conducts first DLT trials for wholesale central bank money settlement : Initially, 16 private companies (10 market participants and six market DLT operators) have been onboarded alongside five central banks to conduct live trials involving actual settlement in central bank money and experiments with mock settlement in test environments. View Article
Economic Policies Impacting EU Finance Taxation: Council agrees on new rules for withholding tax procedures (FASTER) : The Council today reached an agreement (general approach) on safer and faster procedures to obtain double taxation relief, which will help boost cross-border investment and help fight tax abuse.The so-called FASTER initiative aims to make withholding tax procedures in the EU safer... View Article
EFAMA: Council of the EU votes to improve withholding tax rules : A significant step forward taken to remove tax barriers to the CMU View Article
AIMA celebrates agreement on the FASTER/Withholding Tax Directive : Jack Inglis, AIMA CEO, said: "AIMA welcomes this encouraging move towards a better functioning withholding tax system within the EU. We hope it is just the first step towards a fully-fledged withholding tax system, which will go a long way towards completing the Capital Markets Union... View Article
Brexit and the City UK Parliament: Inquiry into FCA and PRA secondary growth and competitiveness objective : The Financial Services Regulation Committee is launching an inquiry into the secondary international competitiveness and growth objective given to the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) under the Financial Services and Markets Act 2023. View Article
Brexit BCC: UK Goods Trade Struggling For Impact : “Other steps include removing some of the trade frictions with Europe, completing free trade agreements already underway, and working with business to get more value for exporters out of our existing deals..." View Article
Bloomberg: Amazon, Morgan Stanley, Pfizer to Announce French Projects : France holds summit aimed at showcasing foreign investment; Other projects include electric planes and green fertilizer View Article
Chatham House: Three foreign policy priorities for the next UK government : O'Sullivam/Maddox: A case for realistic ambition View Article
EUandUK: UK-EU Relations Tracker Q1 2024 : View Article
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