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Financial Regulation: Weekly update. 21 April 2017

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GLOBAL

 

  • FSB consults on framework for evaluation of the effects of regulatory reforms

Seeks comments on methodological aspects of the framework (e.g. evaluation approaches and evaluation challenges) in order to implement it in the coming years. Deadline: 11 May.

  • BIS publishes report on repo market functioning

Analyses changes in the availability and cost of repo financing. There are signs of banks in some jurisdictions being less willing to undertake repo market intermediation.

 

EUROPE

 

  • ESRB publishes review of Macroprudential Policy in the EU in 2016

Most of the MAPO measures implemented during 2016 were restrictive and related to the residential real estate sector and O-SIIs. There is still scope for further improvement.

  • SSM issues guidelines harmonising supervisory rules for less significant institutions (LSIs)

It presents a set of recommendation affecting LSIs on Options and National Discretions addressed to national competent authorities.

  • ECB publishes Annual Report 2016

It highlights main risks in the euro area financial sector, underlining that systemic stress is contained. Presents macro/micro prudential policy, and contributions to regulatory actions.

  • ESAs publish spring report on risk and vulnerabilities in the EU financial system

Highlights financial institutions’ low profitability, valuation risks and repricing of risk premia, interconnectedness within financial system, and cyber risks and IT-related operational risks.

  • EBA publishes ITS on supervisory reporting for EU institutions

Final draft includes: new information on sovereign exposure, changes to operational risk and on monitoring metrics for liquidity, Q&A and other amendments. Application from Mar 2018.

  • EBA publishes report on IT Systems and supervisory reporting processes

The report on the peer review was carried out to assess processes and IT systems implemented by supervisory authorities of all EU Member States.

  • ESMA issues opinion on the implementation of CCP portfolio margining under EMIR

It clarifies: i) when contracts can be considered as the same instrument and ii) CCPs have to limit the reduction in margin requirement when considering different instruments.

  • ESMA issues annual report on EU accounting enforcement and regulatory activities in 2016

It continued improving consistency and quality throughout the EU. It presents priorities and areas to focus on for the upcoming implementation of IFRS 9 and IFRS 15.

  • EBA issues roadmap to its plan to update SREP on 2017-2018

It explains the multi-stage approach which it wishes to follow on the update of the SREP framework. Open consultation will take place by Nov 2017.

  • ESMA consults on guidelines on endorsement regime for Credit Rating Agencies (CRA)

Seeks comments to update the current regime. Endorsement is a way to allow credit ratings issued in other countries to be used for regulatory purposes in the EU. Deadline: 3 Jul.

  • EIOPA publishes methodology to derive ultimate forward rate

Follows Solvency II principles, in particular to be stable over time and only take into account changes in expected long term real interest rates and inflation. Applies from Jan 2018.

  • ESAs issue official translation of the fourth AML Directive

They publish 22 language versions of the final Guidelines on risk-based approach on the fourth AML Directive.

 

UNITED KINGDOM

 

  • PRA publishes policy and supervisory statement on remuneration

i) Policy statement provides feedback on four responses to PRA’s expectations on remuneration (Consultation Paper 33/16) and; ii) Supervisory statement consolidates statements on proportionality, the application of malus and other remuneration issues.

 

  • FCA updates its Mission and publishes 2017/18 Business Plan

Its objective is to serve the public interest through the objectives set by Parliament. The Business Plan presents the main priorities, including Brexit-related issues.

 

 

Recent publications of interest (in English and Spanish):

 

 

Previous editions of our Weekly Regulatory Update in Spanish and English

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