group of experts in banking issues April 6, 2010
Posted by Bradley in : financial regulation , comments closedThe call for expression of interest (original closing date Feb. 28, 2010) doesn’t seem to have been too successful. Today there’s an addendum to the web page:
With reference to the call for expression of interest to participate in the Group of Experts in Banking Issues (GEBI), the Commission would like to clarify that although in principle, no reimbursement is guaranteed, the Commission may decide on the merit of reimbursing travel and subsistence expenses for certain members.
the uk government’s reaction to the robin hood proposal March 21, 2010
Posted by Bradley in : financial regulation , comments closedA coalition of charities has launched a campaign calling for a tax on global financial transactions, the so-called Robin Hood tax. This has led to a number of enquiries from members of the public for information on a transactions tax and the Government’s policy on the issue.
At the heart of the charities’ campaign is the belief that banks – who have benefited from significant public support in recent years – should make a fair contribution to society. This is a belief that is shared by the Government.
The Prime Minister raised the issue at the meeting of G20 Finance Ministers in St Andrews in November. He called for a better economic and social contract to reflect the global responsibilities of financial institutions to society.
The G20 nations have asked the International Monetary Fund to explore these issues further. They are looking at a range of options including contingent capital, systemic levies and transactions taxes. The IMF will deliver an interim report to G20 Finance Ministers at their next meeting in April, with a final report due in June.
The UK will continue to work for a global agreement to see banks contribute their fair share to society. Any work to raise awareness of this issue is to be welcomed.
very complicated…. February 10, 2010
Posted by Bradley in : financial regulation , comments closedgroup of experts in banking issues February 2, 2010
Posted by Bradley in : financial regulation , comments closedThe EU Commission is looking for candidates for this new group (which, according to the mandate, is meant to ensure direct communication between the banking industry, consumers and the European Commission). Here are the criteria:
proven knowledge, competence and experience, including at European or international level, in the field of banking regulation.. commitment to European issues and the internal market in financial services, ability to talk to relevant industry and public entities, willingness to commit time, neutrality and fair judgement.. interest in formulating policies in banking regulation to respond to the challenges created by the financial crisis .. good knowledge of written and spoken English
Neutrality, within the constraints of a commitment to “European issues”, whatever they are.
action on bank bonuses January 20, 2010
Posted by Bradley in : financial regulation , comments closedJohn Harris has a better way of showing disapproval of the fact that UK taxpayers are subsidising bank bonuses than Billy Bragg (at least his solution is legal):
If you have money in a bank whose pay structures strike you as iniquitous, put it somewhere else. As an RBS customer about to jump ship, my own choice is the Co-operative Bank, freshly merged with the Britannia Building Society. Their executives are hardly paupers … but their pay policy falls short of arrogant insanity — and as proof of their bona fides as both progressives and prudent operators, they make a lot of their ethical investment policy and proud avoidance of the financial instruments that got most other banks into such a mess.
passing the buck (while keeping tight hold of the bucks) January 13, 2010
Posted by Bradley in : financial regulation , comments closedReading reports of today’s hearings at the Financial Crisis Inquiry Commission I am a bit perplexed by the suggestions that part of the problem was that regulators failed to keep up with new sophisticated financial products. This from members of an industry that dedicated enormous effort and money over many years to promoting the idea that governmental regulation shouldn’t interfere too much with market activity, and in particular that it should not stifle useful innovation. And, moreover, that it should be the market which would determine whether innovations were useful or not, rather than regulators. Now, it is pretty inevitable that businesses will put effort into lobbying (I started today looking at a fascinating study of how the tobacco industry worked to influence the incorporation of mandatory impact assessment (of a type that would weight economic interests heavily) into EU policy-making) but there’s something rather dishonest for people who have successfully lobbied for limited regulation to then turn round and blame everyone else for not regulating them enough.
uk, eu, financial regulation December 3, 2009
Posted by Bradley in : financial regulation , comments closedThe struggles in the EU over the shape of financial regulation look a little different now that internal market commissioner is to be Michel Barnier (i.e. not one of those free-wheeling anglo-saxons). The UK’s financial sector has taken exception to criticism of the anglo-saxon model (see, for example, the reaction of British Bankers’ Association here). Meanwhile the Council approved changes to the EU regulatory framework with a view to getting the Parliament on board quickly. The UK’s Treasury Select Committee argued recently that rushing this proposal through wasn’t desirable, in part because:
It is not clear how these proposals relate to global initiatives for regulatory reform.
How much the European approach to financial regulation will change with these developments is as yet uncertain. How will European financial regulation compare in the future with that in the US, and how will it fit with the G20 commitments to harmonize approaches to financial regulation?
uk financial services bill November 19, 2009
Posted by Bradley in : financial regulation , comments closedThe Bill, introduced today, contains provisions which would make the FSA responsible for ensuring financial stability, about remuneration, recovery and resolution, and short selling. The Bill includes new enforcement provisions including provisions for a collective proceedings. The Bill also provides:
6A Enhancing public understanding of financial matters etc
(1) The Authority must establish a body corporate (“the consumer financial education body”) whose function (“the consumer financial education function”) is to enhance-
(a) the understanding and knowledge of members of the public of financial matters (including the UK financial system); and
(b) the ability of members of the public to manage their own financial affairs.
(2) The consumer financial education function includes, in particular-
(a) promoting awareness of the benefits of financial planning;
(b) promoting awareness of the financial advantages and disadvantages in relation to the supply of particular kinds of goods or services;
(c) promoting awareness of the benefits and risks associated with different kinds of financial dealing (which includes informing the Authority and other bodies of those benefits and risks);
(d) the publication of educational materials or the carrying out of other educational activities; and
(e) the provision of information and advice to members of the public.
But a schedule to the Bill includes an odd requirement that the new consumer financial education body must have regard to “maintaining confidence in the UK financial system; and … maintaining the stability of the UK financial system”. How could a consumer body hobbled by such a requirement effectively educate consumers?
cra regulation in australia November 19, 2009
Posted by Bradley in : financial regulation , comments closedIt’s hard to be CRA these days. As ASIC acts to remove protection of CRAs from liability (by requiring consent of a CRA for ratings to be included in sales literature (note: the ASIC press release is headlined “ASIC gives credit ratings agencies improved control over ratings use”), the FT reports that S&P (like Moodys) is withdrawing from the Australian retail market. ASIC’s new rules require CRAs to be licensed and subject to requirements which broadly track those which are being applied in the EU and the US. But ASIC requires firms which are involved in the retail market to be involved in an approved external dispute resolution scheme and it is this requirement the S&P Press release describes as critical to its decision:
Standard & Poor’s managing director for Australia and New Zealand John Bailey said, “We are supportive of regulations that strengthen transparency and oversight and improve market confidence. There is, however, a need for international consistency in regulatory oversight because ratings are issued and used globally.
“In terms of the requirements for a retail licence, we are concerned that membership of a local EDR scheme would interfere with the analytical independence of our rating opinions and undermine the global consistency and comparability of ratings.
“This scheme could change the substance of a rating and result in the creation of dual credit ratings – an Australian “EDR”domestic credit rating and a “rest of the world”credit rating. Because the local ombudsman would effectively be second guessing S&P’s analysts, we believe this would ultimately create investor confusion and harm financial markets.
A reminder that it’s not just the substance of the rules that matters, but also how those rules are to be enforced. Meanwhile, the EU Commission announced that had issued a statement of objections with respect to S&P’s practice of charging for the use of ISINs by EEA firms, arguing that it was in breach of Art. 82 (abuse of a dominant position).
cras in the eu October 21, 2009
Posted by Bradley in : financial regulation , comments closedThe CRA regulation is dated 16 September 2009 and should be published in the Official Journal soon. CESR is now providing feedback on its consultation on a central repositary (15 responses all from the CRA and banking sectors) and a new consultation (deadline for comments 30 November, 2009) with a really catchy title: “Guidance on Registration Process, Functioning of Colleges, Mediation Protocol, Information set out in Annex II, Information set for the application for Certification and for the assessment of CRAs systemic importance”.