1143

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Common rules and new framework for securitisation

20-10-2017

In autumn 2015, the European Commission proposed a regulation on securitisation, in the context of the Capital Markets Union initiative. The proposal followed a consultation with stakeholders and took into account initiatives at international (BCBS-IOSCO) and European levels (EBA). The proposal replaces existing rules relating to due diligence, risk retention, transparency and supervision with a uniform regime. It provides a framework to identify simple, transparent and standardised (STS) securitisations ...

In autumn 2015, the European Commission proposed a regulation on securitisation, in the context of the Capital Markets Union initiative. The proposal followed a consultation with stakeholders and took into account initiatives at international (BCBS-IOSCO) and European levels (EBA). The proposal replaces existing rules relating to due diligence, risk retention, transparency and supervision with a uniform regime. It provides a framework to identify simple, transparent and standardised (STS) securitisations and to allow investors to analyse associated risks. The proposal came as a package with a second proposal, to amend the Capital Requirements Regulation applicable to credit institutions and investment firms in respect of securitisation. During the October II plenary session, the European Parliament is due to vote on the compromise agreement struck with the Council in May 2017. This briefing further updates an earlier edition, of July 2016: PE 586.624. See also our updated briefing on the related proposal: PE 608.778.

Securitisation and capital requirements

20-10-2017

As part of its ambition to create a Capital Markets Union, the European Commission wants to revive the securitisation market in the EU, in order to offer new financing tools and ease credit provision, especially for small and medium-sized enterprises. Its 'securitisation initiative', set out in a proposed regulation on 30 September 2015, would establish a new framework for 'simple, transparent, and standardised' (STS) securitisations. This new initiative also has implications for the overall prudential ...

As part of its ambition to create a Capital Markets Union, the European Commission wants to revive the securitisation market in the EU, in order to offer new financing tools and ease credit provision, especially for small and medium-sized enterprises. Its 'securitisation initiative', set out in a proposed regulation on 30 September 2015, would establish a new framework for 'simple, transparent, and standardised' (STS) securitisations. This new initiative also has implications for the overall prudential framework for credit institutions and investment firms, therefore the Commission proposed to amend the Capital Requirements Regulation (EU) No 575/2013 accordingly. The proposed amendments would adjust risk retention profiles to reflect properly the specific features of STS securitisations. The most significant changes are: a new hierarchy of risk calculation methods and lower capital requirements for STS. The Council agreed on a general approach on both dossiers in early December 2015. Parliament’s ECON Committee adopted its report a year later, and the two institutions reached agreement on the text in trilogue in June 2017. This briefing further updates an earlier edition of July 2016: PE 573.935. See also our updated briefing on the related proposal: PE 608.777.

The role of the Basel Committee on Banking Supervision (BCBS)

20-10-2017

This briefing gives an overview of the role of the Basel Committee on Banking Supervision (BCBS) in setting international standards in banking regulation and supervision. It also raises the questions on how the preparatory work is organised in the European Union in order to enhance transparency and co-operation.

This briefing gives an overview of the role of the Basel Committee on Banking Supervision (BCBS) in setting international standards in banking regulation and supervision. It also raises the questions on how the preparatory work is organised in the European Union in order to enhance transparency and co-operation.

Draft Regulatory Technical Standards (RTS) on valuation before and following resolution under Articles 36 and 74 of the Bank Recovery and Resolution Directive (BRRD)

19-10-2017

This briefing has been drawn up to support ECON’s work on the scrutiny of delegated acts, in particular as regards the discussion of 19 October 2017 on the two draft European Banking Authority (EBA) RTS on valuation under BRRD. The draft RTS are intended to promote consistent application of methdologies for valuations regarding the principles which independent valuers have to observe for their respective valuations.

This briefing has been drawn up to support ECON’s work on the scrutiny of delegated acts, in particular as regards the discussion of 19 October 2017 on the two draft European Banking Authority (EBA) RTS on valuation under BRRD. The draft RTS are intended to promote consistent application of methdologies for valuations regarding the principles which independent valuers have to observe for their respective valuations.

What conclusions can be drawn from the EBA 2016 Market Risk Benchmarking Exercise?

19-10-2017

The EBA benchmarking exercise shows strong disagreement between different banks both about the value and about the risk of hypothetical test portfolios. If the results of the EBA benchmarking study are correct, and as far as the test portfolio instruments are representative, the internal market risk models currently used by European banks would strongly violate the Level Playing Field Principle (“If different banks hold the same portfolio, they should be required to hold the same amount of regulatory ...

The EBA benchmarking exercise shows strong disagreement between different banks both about the value and about the risk of hypothetical test portfolios. If the results of the EBA benchmarking study are correct, and as far as the test portfolio instruments are representative, the internal market risk models currently used by European banks would strongly violate the Level Playing Field Principle (“If different banks hold the same portfolio, they should be required to hold the same amount of regulatory capital.”). In this analysis, I present the EBA results in a non-technical language, and assess the robustness and validity of the study itself, highlighting problematic issues in EBA’s methodological approach. Furthermore, I discuss which follow-up actions ECON Members might consider.

External author

T. Breuer

Key Macroeconomic Indicators in the Euro Area and the United States

18-10-2017

Latest forcest by EC, IMF and OECD.

Latest forcest by EC, IMF and OECD.

Understanding non-tariff barriers in the single market

09-10-2017

Despite the achievements of single market integration, many non-tariff barriers (NTBs) persist, preventing realisation of its full economic potential. These arise from laws, technical regulations and practices, and create obstacles for trade. NTBs can be of a general character, such as problems with the implementation and enforcement of EU law at the national level, missing or differing e-government solutions, or complex VAT requirements in intra-EU trade. NTBs can also be sector-specific and concern ...

Despite the achievements of single market integration, many non-tariff barriers (NTBs) persist, preventing realisation of its full economic potential. These arise from laws, technical regulations and practices, and create obstacles for trade. NTBs can be of a general character, such as problems with the implementation and enforcement of EU law at the national level, missing or differing e-government solutions, or complex VAT requirements in intra-EU trade. NTBs can also be sector-specific and concern only specific markets for goods, services or retail. Accordingly, the EU is tackling NTBs with a mix of general and sectoral initiatives, often cutting across various policy areas. The Juncker Commission, now at the mid-term of its mandate, made deepening the single market one of its main priorities. The Commission's single market and digital single market strategies address many NTBs. However, greater Member State involvement, stronger monitoring, and increased political emphasis on the single market are likely to be needed to remove the barriers and deepen single market integration. NTBs are also increasingly mentioned in the context of debates on the United Kingdom's withdrawal from the European Union. The impacts of Brexit on the single market and NTBs are as yet unclear, but early analysis points to the likelihood of legal uncertainty and the need to address a multitude of often challenging issues.

Macro-Financial Assistance to EU Member States - State of Play, October 2017

09-10-2017

This document provides regularly updated information on EU Member States receiving financial assistance from the ESM, the EFSF, the EFSM, the EU balance of payments assistance facility, other Member States and/or the IMF. It also covers the post-programme reviews undertaken by the European Commission (EC) in liaison with the ECB (Post-Programme Surveillance, PPS), the IMF (Post-Programme Monitoring, PPM) and the ESM (Early Warning System, EWS).

This document provides regularly updated information on EU Member States receiving financial assistance from the ESM, the EFSF, the EFSM, the EU balance of payments assistance facility, other Member States and/or the IMF. It also covers the post-programme reviews undertaken by the European Commission (EC) in liaison with the ECB (Post-Programme Surveillance, PPS), the IMF (Post-Programme Monitoring, PPM) and the ESM (Early Warning System, EWS).

Cross-border payments in the European Union

06-10-2017

The European single market for payments is based on the idea of providing safer and more innovative payment services across the EU. To this end, the European institutions are working on establishing rules and tools to make payment services easier and to foster competition. The aim is to guarantee common standards in all Member States, efficient, faster and diversified types of payment, and consumer protection. The EU has already put several legislative tools in place, has established common criteria ...

The European single market for payments is based on the idea of providing safer and more innovative payment services across the EU. To this end, the European institutions are working on establishing rules and tools to make payment services easier and to foster competition. The aim is to guarantee common standards in all Member States, efficient, faster and diversified types of payment, and consumer protection. The EU has already put several legislative tools in place, has established common criteria and requirements, and provided alternatives (such as e-money) to 'traditional' payment channels. 'Payment services' mean those defined by the EU legislation in the field, and cover common tools and standards for cross-border payments (SEPA), and also e-money services. This Implementation Appraisal deals with cross-border payments and, more specifically, with Regulation (EC) No 924/2009 in the context of the planned European Commission review. Eight years after its entry into force, the Commission has announced its intention to extend its scope to non-euro currencies.

Framework for a pan-European personal pension product (PEPP)

05-10-2017

Europe's population is ageing, due to people living longer and having fewer children, putting increased pressure on pension systems. This has led to reforms to make public pensions more sustainable – and often less generous – in future. To support retirement incomes, the European Commission's 2012 pensions white paper called for more opportunities for citizens to save in safe and good-value complementary pensions. The proposed framework for a pan-European personal pension product (PEPP) aims to encourage ...

Europe's population is ageing, due to people living longer and having fewer children, putting increased pressure on pension systems. This has led to reforms to make public pensions more sustainable – and often less generous – in future. To support retirement incomes, the European Commission's 2012 pensions white paper called for more opportunities for citizens to save in safe and good-value complementary pensions. The proposed framework for a pan-European personal pension product (PEPP) aims to encourage the development of personal pensions (that is, voluntary individually funded pensions) in Europe, to help support retirement saving and strengthen the single market for capital by making more funds available for investment. Generally the proposal is considered a welcome extra option to support retirement savings and investment. However differing national pension systems and tax treatments are noted as challenges, although the Commission has also issued a tax recommendation.

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