1025

result(s)

Word(s)
Publication type
Author
Keyword
Date

Recovery and resolution of central counterparties

22-03-2017

This impact assessment builds a convincing case for action. It is mainly based on expert judgement by the Commission's departments and is backed up by relevant references, public consultation and coordination with international work-streams. The Commission states that the proposal, published in November 2016, is fully in line with the latest policy discussions and orientation by the Financial Stability Board and the G20, quoting a document from August 2016. Notwithstanding this, the Impact assessment ...

This impact assessment builds a convincing case for action. It is mainly based on expert judgement by the Commission's departments and is backed up by relevant references, public consultation and coordination with international work-streams. The Commission states that the proposal, published in November 2016, is fully in line with the latest policy discussions and orientation by the Financial Stability Board and the G20, quoting a document from August 2016. Notwithstanding this, the Impact assessment itself does not appear to have been fully updated since the summer of 2015. Therefore, some potentially important developments do not seem to be properly reflected in the IA. These include the recognition of non-EU central counterparties, the publication of new material, and the scenarios opened in the clearing world by the UK referendum of 23 June 2016.

Economic Dialogue with the Other EU Institutions under the European Semester Cycle (State-of-Play, March 2017)

22-03-2017

This document provides an overview of forthcoming and undertaken Economic Dialogues with the other institutions of the European Union under the European Semester Cycle(s). It is updated on a regular basis.

This document provides an overview of forthcoming and undertaken Economic Dialogues with the other institutions of the European Union under the European Semester Cycle(s). It is updated on a regular basis.

Economic Dialogue with Croatia

22-03-2017

This note presents selected information on the current status of the EU economic governance procedures and related relevant information in view of an Economic Dialogue with Zdravko Maric, Croatia’s Minister for Finance, in the ECON committee of the European Parliament. The invitation for a dialogue is in accordance with the EU economic governance framework.

This note presents selected information on the current status of the EU economic governance procedures and related relevant information in view of an Economic Dialogue with Zdravko Maric, Croatia’s Minister for Finance, in the ECON committee of the European Parliament. The invitation for a dialogue is in accordance with the EU economic governance framework.

Hybrid mismatches with third countries

21-03-2017

Hybrid mismatch is a situation where a cross-border activity is treated differently for tax purposes by the countries involved, resulting in favourable tax treatment. Hybrid mismatches are used as aggressive tax planning structures, which in turn trigger policy reactions to neutralise their tax effects. When adopting the Anti-Tax Avoidance Directive in July 2016, the Council requested that the Commission put forward a proposal on hybrid mismatches involving third countries. The amendment proposed ...

Hybrid mismatch is a situation where a cross-border activity is treated differently for tax purposes by the countries involved, resulting in favourable tax treatment. Hybrid mismatches are used as aggressive tax planning structures, which in turn trigger policy reactions to neutralise their tax effects. When adopting the Anti-Tax Avoidance Directive in July 2016, the Council requested that the Commission put forward a proposal on hybrid mismatches involving third countries. The amendment proposed by the Commission on 25 October broadens the provisions of the directive accordingly. It seeks to neutralise mismatches by obliging Member States to deny the deduction of payments by taxpayers or by requiring taxpayers to include a payment or a profit in their taxable income. As this is a tax measure, Parliament is consulted only, and the proposal will be adopted by the Council. The Economic and Monetary Affairs Committee is preparing Parliament's opinion.

Structural reform support programme 2017-2020

21-03-2017

Structural reforms have been identified as crucial to accelerating economic recovery, boosting growth and reducing unemployment. In November 2015, the European Commission proposed to establish the Structural Reform Support Programme 2017-2020, to provide Member States with technical assistance in designing and implementing structural reforms. The proposed budget is €142.8 million, to be taken from existing technical assistance resources under the European Structural and Investment Funds. Building ...

Structural reforms have been identified as crucial to accelerating economic recovery, boosting growth and reducing unemployment. In November 2015, the European Commission proposed to establish the Structural Reform Support Programme 2017-2020, to provide Member States with technical assistance in designing and implementing structural reforms. The proposed budget is €142.8 million, to be taken from existing technical assistance resources under the European Structural and Investment Funds. Building on experience relating to reforms in Greece and Cyprus, the programme aims to improve administrative and institutional capacity, to facilitate better implementation of EU law, in particular the country-specific recommendations issued under the European Semester, more efficient use of EU funds and the introduction of growth-enhancing structural reforms. The Council agreed its negotiating stance in April 2016, while the EP's Committee on Regional Development adopted its report in November 2016. Agreement was reached in trilogue negotiations in February 2017, and the EP is due to vote on this in plenary in April. Third edition. The ‘EU Legislation in Progress’ briefings are updated at key stages throughout the legislative procedure.

Presentation of the SSM 2016 Annual Report by Danièle Nouy, Chair of the Single Supervisory Mechanism (SSM)

21-03-2017

This note is prepared in view of a regular public hearing as referred to in Regulation 1024/2013 and the Interinstitutional Agreement between the EP and the European Central Bank. Ms Nouy will inter alia present the SSM Annual report 2016. The EP received a copy of that report on a confidential basis, under embargo until Thursday, 23 March 2016, at 9:00 CET. This briefing therefore does not use or refer to any information provided in that Annual report. The following issues are addressed in this ...

This note is prepared in view of a regular public hearing as referred to in Regulation 1024/2013 and the Interinstitutional Agreement between the EP and the European Central Bank. Ms Nouy will inter alia present the SSM Annual report 2016. The EP received a copy of that report on a confidential basis, under embargo until Thursday, 23 March 2016, at 9:00 CET. This briefing therefore does not use or refer to any information provided in that Annual report. The following issues are addressed in this briefing: key priorities for direct supervision in 2017, the key risks road map for 2017, the Supervisory Banking Statistics for the third quarter 2016, recent relevant publications by the SSM, and a summary of external briefing papers on conduct risk.

Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories

20-03-2017

Regulation 648/2012 intends to make derivative markets more stable, transparent and efficient. It implements G20 commitments on over-the-counter derivatives and on the mitigation of risks on financial markets. It establishes several important principles and rules applicable to derivative contracts, such as a clearing obligation or a reporting obligation, but also rules applicable to subjects active in the financial markets, such as central counterparties or trade repositories. The implementation ...

Regulation 648/2012 intends to make derivative markets more stable, transparent and efficient. It implements G20 commitments on over-the-counter derivatives and on the mitigation of risks on financial markets. It establishes several important principles and rules applicable to derivative contracts, such as a clearing obligation or a reporting obligation, but also rules applicable to subjects active in the financial markets, such as central counterparties or trade repositories. The implementation reports of the European Commission, as well as reports of the European Securities and Markets Authority and of the European Systemic Risk Board, show that the regulation in its current state needs several changes and amendments. These reports note the existing challenges linked with procyclicality, frontloading, management of systemic risk or the position of central counterparties and of the European Securities and Markets Authority. Furthermore, the unclear language of the regulation, missing and unclear definitions (e.g. 'client' or 'assets') and the issues linked with transparency should be considered when it comes to be amended. The European Parliament has called on the Commission on several occasions to update the financial legislation and improve the compliance with commitments on OTC derivatives reform set by the G20. Similarly, the European Economic and Social Committee has noted the need to update the existing legislation. Last, but not least, the European Commission itself has expressed the willingness to come forward with a new legislative proposal that will update the existing system of OTC derivatives, central counterparties and trade repositories. It is expected that the Commission will submit this proposal in June 2017.

Fines for Misconduct in the Banking Sector – What Is the Situation in the EU?

20-03-2017

This paper was drafted under supervision of the Economic Governance Support Unit. Misconduct (conduct) risk may be defined as the risk of losses to an institution arising from an inappropriate supply of financial services, including cases of willful or negligent misconduct. Based on EBA data, it generates the vast majority of operational risks expected by Europe’s top banks (€71bn according to the 2016 stress test). According to public-domain figures, misconduct costs have been rising strongly for ...

This paper was drafted under supervision of the Economic Governance Support Unit. Misconduct (conduct) risk may be defined as the risk of losses to an institution arising from an inappropriate supply of financial services, including cases of willful or negligent misconduct. Based on EBA data, it generates the vast majority of operational risks expected by Europe’s top banks (€71bn according to the 2016 stress test). According to public-domain figures, misconduct costs have been rising strongly for large European banks in 2011-2015, although no European lender matches the costs experienced by large US banks. The distribution of losses looks highly skewed, with a few exceptionally high costs. More than 55% originates from traditional areas like commercial and retail banking. There are signs that conduct costs (per unit of total assets) have been stronger for small and mid-sized institutions, and for banks that ended up in resolution or requiring some other form of extraordinary support. Conduct risk is addressed by a number of EU-wide regulations and supervisory standards. Still, only half of the EU’s competent authorities include conduct risk in their supervisory examination programmes. To discipline conduct risk ex post sanctions play a useful role, but should be complemented by ex ante tools like improving the quality of bank governance, preventing remuneration schemes that encourage inappropriate practices, encouraging whistle-blowing and improving the clarity of regulations to remove grey areas.

External author

Andrea Resti

Fines for Misconduct in the Banking Sector – What Is the Situation in the EU?

20-03-2017

This paper was drafted under supervision of the Economic Governance Support Unit. Bank regulators have the discretion to discipline banks by executing enforcement actions to ensure that banks correct deficiencies regarding safe and sound banking principles. We highlight the trade-offs regarding the execution of enforcement actions for financial stability. Following this we provide an overview of the differences in the legal framework governing supervisors’ execution of enforcement actions in the ...

This paper was drafted under supervision of the Economic Governance Support Unit. Bank regulators have the discretion to discipline banks by executing enforcement actions to ensure that banks correct deficiencies regarding safe and sound banking principles. We highlight the trade-offs regarding the execution of enforcement actions for financial stability. Following this we provide an overview of the differences in the legal framework governing supervisors’ execution of enforcement actions in the Banking Union and the United States. After discussing work on the effect of enforcement action on bank behaviour and the real economy, we present data on the evolution of enforcement actions and monetary penalties by U.S. regulators. We conclude by noting the importance of supervisors to levy efficient monetary penalties and stressing that a division of competences among different regulators should not lead to a loss of efficiency regarding the execution of enforcement actions.

External author

Martin R. Götz and Tobias H. Tröger

Fines for Misconduct in the Banking Sector – What Is the Situation in the EU?

20-03-2017

This paper was drafted under supervision of the Economic Governance Support Unit. The US system for addressing bank misconduct through fines delivers a number of lessons for the EU with regard to the design of bank enforcement architecture and the need to develop common approaches across national and EU levels with a view to avoiding regulatory arbitrage. Following the crisis, the highest money penalties imposed on banks in the US related to mis-selling of financial products – a criminal offence ...

This paper was drafted under supervision of the Economic Governance Support Unit. The US system for addressing bank misconduct through fines delivers a number of lessons for the EU with regard to the design of bank enforcement architecture and the need to develop common approaches across national and EU levels with a view to avoiding regulatory arbitrage. Following the crisis, the highest money penalties imposed on banks in the US related to mis-selling of financial products – a criminal offence falling under the remit of Department of Justice – rather than to breaches of prudential supervisory requirements.

External author

Elena Carletti

Upcoming events

23-03-2017
Hearing on the Unitary Patent: state of play
Hearing -
JURI
23-03-2017
US Politics today: Understanding recent dynamics
Other event -
EPRS
23-03-2017
Youth Guarantee and Youth Employment Initiative: Lessons from implementation
Workshop -
EMPL

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