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Posted on 19-03-2019

Piracy and armed robbery off the coast of Africa: EU and global impact

19-03-2019

African maritime security is affected by a wide range of illegal activities. This paper focuses on maritime piracy and armed robbery at sea, examining the legal aspects and societal implications of these forms of violence. Maritime piracy and armed robbery off Africa's coasts also pose a threat to the European Union's security and economy. Since 2008, the European Union has been implementing a maritime security strategy by means of separate regional strategies in the Gulf of Aden and in the Gulf ...

African maritime security is affected by a wide range of illegal activities. This paper focuses on maritime piracy and armed robbery at sea, examining the legal aspects and societal implications of these forms of violence. Maritime piracy and armed robbery off Africa's coasts also pose a threat to the European Union's security and economy. Since 2008, the European Union has been implementing a maritime security strategy by means of separate regional strategies in the Gulf of Aden and in the Gulf of Guinea.

Public hearing with Andrea Enria, Chair of the ECB Supervisory Board, presenting the SSM Annual Report 2018

19-03-2019

This note is prepared in view of a regular public hearing with the new Chair of the Supervisory Board of the European Central Bank (ECB), Andrea Enria, who will inter alia present the SSM Annual Report 2018. The EP received a copy of that report on a confidential basis, under embargo until Thursday, 21 March 2019, at 9:00 am CET. In view of that restriction, this briefing does not refer to that Annual Report in any way. The following issues are addressed in this briefing: (i) supervisory disclosure ...

This note is prepared in view of a regular public hearing with the new Chair of the Supervisory Board of the European Central Bank (ECB), Andrea Enria, who will inter alia present the SSM Annual Report 2018. The EP received a copy of that report on a confidential basis, under embargo until Thursday, 21 March 2019, at 9:00 am CET. In view of that restriction, this briefing does not refer to that Annual Report in any way. The following issues are addressed in this briefing: (i) supervisory disclosure and ECB transparency policy, (ii) leveraged finance, (iii) Brexit (supervisory issues), (iv) summaries of 4 external briefing papers on “The next SSM term: Supervisory challenges ahead” commissioned by the ECON Committee, (v) regulatory and supervisory developments, and (vi) recent ECB publications.

Posted on 18-03-2019

The next SSM term: supervisory challenges ahead

18-03-2019

Compared to the pre-SSM period, the European banking system appears today healthier and sounder. Capital ratios and asset quality have steadily improved. Capital ratios have become not only higher but also more comparable and reliable. Taking stock of these positive outcomes, the challenges for supervision in the future is to be able to foster financial integration and reconcile harmonisation with greater consideration of bank and country specificities. In this respect, we see positively an approach ...

Compared to the pre-SSM period, the European banking system appears today healthier and sounder. Capital ratios and asset quality have steadily improved. Capital ratios have become not only higher but also more comparable and reliable. Taking stock of these positive outcomes, the challenges for supervision in the future is to be able to foster financial integration and reconcile harmonisation with greater consideration of bank and country specificities. In this respect, we see positively an approach encouraging supervisory dialogue. Furthermore, supervisory requirements need to be simple, clear, and possibly stable to reduce uncertainty and the compliance costs of an overly demanding supervision. We also look forward to a model that does not let out of sight the very final goal of good supervision, that is favouring economic growth through a healthier and sounder banking system. Overall, we encourage more nuanced and less ‘one-size-fits-all’ supervisory decisions, supported by stronger empirical research to reduce the risk of unintended effects.

External author

B. Bruno, E. Carletti

The next SSM term: supervisory challenges ahead

18-03-2019

We look at the challenges facing the Single Supervisory Mechanism in the coming years, and discuss vulnerabilities in the euro area’s banking system, as well as possible improvements in the SSM’s internal practices. Among the former are low profitability, the increased role of the shadow banking system and weak governance. The latter include an overly complex regulatory framework, limits on staffing that lead to excessive usage of consultants, the need for more transparency and accountability. The ...

We look at the challenges facing the Single Supervisory Mechanism in the coming years, and discuss vulnerabilities in the euro area’s banking system, as well as possible improvements in the SSM’s internal practices. Among the former are low profitability, the increased role of the shadow banking system and weak governance. The latter include an overly complex regulatory framework, limits on staffing that lead to excessive usage of consultants, the need for more transparency and accountability. The SSM should help banks achieve more sustainable returns by making supervisory requirements less complex. It should monitor shadow banks, ensuring that traditional lenders are isolated from possible shocks. As for governance, the SSM ought to engage in a multi-year action plan aimed at improving ethics, technical qualifications, checks and balances. Regulatory complexity must be reduced by further harmonising national rules. Constraints on the SSM’s budget and human resources should be loosened, but the use of external consultants ought to be limited to special cases. Accountability and transparency can be enhanced, e.g., through greater disclosure on resources and objectives, SREP and other internal methodologies, and on decisions taken by the SSM’s Administrative Board of Review. The European Court of Auditors should be entitled to assess the soundness of the SSM’s processes, without interfering with individual supervisory decisions.

External author

A.Resti

The next SSM term: Supervisory challenges ahead

18-03-2019

In this note we first highlight different developments for banks under direct ECB supervision within the SSM that may prompt further investigation by supervisors. We find that banks that were weakly capitalised at the start of direct ECB supervision (1) still face elevated levels of non-performing loans, (2) are less cost-efficient and (3) reduced their share of subordinated debt financing over the last years. We then stress the importance of continuous and ongoing cost-benefit analysis regarding ...

In this note we first highlight different developments for banks under direct ECB supervision within the SSM that may prompt further investigation by supervisors. We find that banks that were weakly capitalised at the start of direct ECB supervision (1) still face elevated levels of non-performing loans, (2) are less cost-efficient and (3) reduced their share of subordinated debt financing over the last years. We then stress the importance of continuous and ongoing cost-benefit analysis regarding banking supervision in Europe. We also encourage processes to question existing supervisory practices to ensure a lean and efficient banking supervision. Finally, we underline the need of continuous and intensified coordination among regulatory bodies in the Banking Union since the efficacy of European bank supervision rests on its interplay with many different institutions.

External author

M. R. Götz, T. H. Tröger, M.Wahrenburg

The next SSM term: supervisory challenges ahead

18-03-2019

This paper focuses on two ways in which overall bank supervision and oversight can be improved in the next SSM term (i) by more effective market discipline of banks by investors in banks’ securities, and (ii) by more effective oversight of bank risk taking by bank boards. To improve market discipline, the ECB should consider facilitating the publication of additional bank-specific supervisory information. In addition, the ECB can cooperate with the EBA to increase the coverage of SSM banks in the ...

This paper focuses on two ways in which overall bank supervision and oversight can be improved in the next SSM term (i) by more effective market discipline of banks by investors in banks’ securities, and (ii) by more effective oversight of bank risk taking by bank boards. To improve market discipline, the ECB should consider facilitating the publication of additional bank-specific supervisory information. In addition, the ECB can cooperate with the EBA to increase the coverage of SSM banks in the EU-wide transparency and stress test exercises. The ECB could also review the quality of banks’ Pillar 3 reports as part of its supervisory process, and it could potentially use market information on banks’ valuation and cost of funding to inform its supervisory work. Furthermore, the ECB should revise its current guidance regarding bank boards that has the effect of increasing shareholder influence, as bank shareholders tend to benefit more from excessive bank risk taking than other stakeholders including the bank’s management.

External author

H. Huizinga

Posted on 04-03-2019

Farming without plant protection products

04-03-2019

Plant Protection Products (PPPs) are often perceived by consumers as very harmful for human health and for the environment. The tendency in the EU policy is to stimulate the reduction of PPPs. Can we maintain high yield with less PPPs? This paper presents the current state of the art regarding the role of PPPs in securing global food production, preserving biodiversity and supporting farmer’s income. The role of various stakeholders on the current perception of risk by the general public is given ...

Plant Protection Products (PPPs) are often perceived by consumers as very harmful for human health and for the environment. The tendency in the EU policy is to stimulate the reduction of PPPs. Can we maintain high yield with less PPPs? This paper presents the current state of the art regarding the role of PPPs in securing global food production, preserving biodiversity and supporting farmer’s income. The role of various stakeholders on the current perception of risk by the general public is given and promising alternative and more sustainable strategies to further reduce PPP use are commented.

External author

DG, EPRS

Posted on 18-02-2019

A Fiscal Capacity for the Eurozone: Constitutional Perspectives

15-02-2019

This in-depth analysis, commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the AFCO Committee, considers from a constitutional perspective the introduction of a fiscal capacity for the Eurozone. After explaining the constitutional asymmetry of Economic & Monetary Union, and surveying several recent proposals to establish a fiscal capacity, the in-depth analysis explains in comparative perspective how other federal unions by ...

This in-depth analysis, commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the AFCO Committee, considers from a constitutional perspective the introduction of a fiscal capacity for the Eurozone. After explaining the constitutional asymmetry of Economic & Monetary Union, and surveying several recent proposals to establish a fiscal capacity, the in-depth analysis explains in comparative perspective how other federal unions by aggregation such as the United States and Switzerland are endowed with centralized fiscal stabilization tools and discusses how such a fiscal capacity could be established in the Eurozone, considering issues of legal bases, governance and accountability, as well as possible windows of opportunities to introduce it post-Brexit.

External author

Federico Fabbrini, Professor of EU Law at Dublin City University (DCU) and Founding Director of the DCU Brexit Institute

Posted on 13-02-2019

Cardiovascular Diseases and Lifestyle

15-01-2019

This document summarises the presentations and discussion taking place at the workshop organised by Policy Department A on the limits and opportunities of the Cardiovascular Disease and Lifestyle, held at the European Parliament, in Brussels. The aim of the workshop was to inform the Members of the ENVI Committee and all participants on the relationship between cardiovascular and related diseases and a number of lifestyle choices in the context of the European Union, and to have an overview of the ...

This document summarises the presentations and discussion taking place at the workshop organised by Policy Department A on the limits and opportunities of the Cardiovascular Disease and Lifestyle, held at the European Parliament, in Brussels. The aim of the workshop was to inform the Members of the ENVI Committee and all participants on the relationship between cardiovascular and related diseases and a number of lifestyle choices in the context of the European Union, and to have an overview of the global and EU policy landscape addressing these challenges.

External author

Mariana Dates, Micol Tedeschi, Mai Webber

The role of national fiscal bodies. State of play - February 2019

13-02-2019

This briefing provides an overview of the role played by independent national fiscal bodies in the preparations of forthcoming budgets in EU Member States.

This briefing provides an overview of the role played by independent national fiscal bodies in the preparations of forthcoming budgets in EU Member States.

Upcoming events

21-03-2019
Education in human rights : progress, lessons learnt and challenges
Hearing -
DROI
21-03-2019
Joint PETI and ENVI Public Hearing on Climate Change Denial
Hearing -
PETI ENVI
22-03-2019
The Importance of Evaluation of outcomes in Healthcare and Hospital Experiences
Workshop -
ENVI

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