Risk and Regulation Monthly - REGULATORY STRATEGY EMEA - Deloitte
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CENTRE for
REGULATORY
STRATEGY
EMEA
Risk and Regulation Monthly
May 2020Contents CONTENTS HIGHLIGHTS COVID-19 BANKING CAPITAL MARKETS INVESTMENT MANAGEMENT CENTRAL BANK OF IRELAND OTHER CONTACTS Highlights COVID-19 and its economic impact continued to dominate the news agenda throughout April. At the European level, the ECB announced that it was changing its rules so that it will accept bonds that lose their investment-grade credit rating as collateral in exchange for cheap liquidity funding available to banks. Any bonds rated as investment grade on April 7 will continue to be eligible even if they are downgraded below the triple-B level by the main credit rating agencies as long as their rating remains no more than two notches below investment grade. However, these assets will be subjected to “haircuts” to reduce their value as collateral based on their latest credit rating. For a full list of COVID-19 related regulatory, monetary and fiscal policy initiatives, please see our report available here.
COVID-19
EU
EBA
Statement on supervisory reporting and Pillar 3 disclosures, share buy-
backs and remuneration, and financial crime in the context of COVID-19
Guidelines on treatment of public and private moratoria in light of COVID-19
measures
Guidance on supervisory flexibility in relation to COVID-19, covering market
risk, SREP, operational resilience and recovery planning
ECB - SSM
Interview with Andrea Enria, Chair of the supervisory board of the ECB, on
Bloomberg TV, regarding restrictions to European bank distributions
Article by Andrea Enria, Chair of the supervisory board of the ECB, on how
European banking supervision can help fight the economic consequences of
the COVID-19 crisis in Europe
Statement on measures to provide temporary relief for capital requirements
for market risk
Interview with Andrea Enria, Chair of the Supervisory Board of the ECB, with
El Confidencial on supervisory measures in response to the COVID-19 crisis
ECB Central Bank
Statement supporting macroprudential policy actions taken in response to
the COVID-19 crisis
Communication on the collection of statistical information in the context of
COVID-19
Statement on loosened collateral eligibility rules to mitigate the possible
effect of ratings downgrades
Statement on new pandemic emergency longer-term refinancing operations
(PELTROs)
Statement on revisions to targeted lending operations
ECOFIN
Report on the comprehensive economic policy response to the COVID-19
pandemic
Statement of EU ministers of finance on continuing bank lending and on
maintaining a well-functioning insurance sector
Document containing a roadmap for recovery towards a more resilient,
sustainable and fair Europe
ESMA Clarification of issues around publication of best execution reports under
RTS 27 and 28 of MiFID II
Risk assessment updated in light of the COVID-19 pandemic
Statement on actions to mitigate the impact of COVID-19 on deadlines for
the publication of periodic reports by fund managers
Extension of MiFID II/MiFIR transparency review report consultation
Postponement of publication dates for annual non-equity transparency
calculations and quarterly systematic internaliser (SI) data
Statement on actions to mitigate the impact of COVID-19 on the EU
financial markets regarding external audit requirements for interest rate
benchmarks under the BMR
Issued opinions agreeing to the renewal of five emergency restrictions on
short selling
New Q&As on alternative performance measures (APM) in the context of
COVID-19
SRB
Letter to banks on potential operational relief measures related to COVID-19
Blog by Elke Konig, chair at the SRB, on the SRB's approach to MREL targets
in light of the COVID-19 crisis
Int’l
BIS
Measures to alleviate the impact of COVID-19 on global banking systems
Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, on the
Riksbank's measures to mitigate the effects of the corona crisis on the
economy
Report on COVID-19, cash, and the future of payments
Paper on the macroeconomic spillover effects of COVID-19 on the global
economy
Speech by Jerome H Powell, Chair of the Board of Governors of the Federal
Reserve System, on COVID-19 and the economy
Interview with Luis de Guindos, Vice-President of the ECB, on the COVID-19
crisis and the approach to recovery
Interview with Christine Lagarde, President of the ECB, on responses and
potential future measures to tackle the COVID-19 crisis
Financial Stability Institute Brief No.1: Reflections on regulatory responses
to the COVID-19 pandemic Remarks by Ms Isabel Schnabel, Member of the Executive Board of the
European Central Bank, on the corporate governance implications of COVID-
19
Research paper on COVID-19 and operational resilience: addressing
financial institutions' operational challenges in a pandemic
Speech by Benoit Coeuré, Head of the BIS Innovation Hub, on the value of
resilience and technology in tackling the COVID-19 crisis
Interview of Luis de Guindos, Vice-President, on the ECB's approach and
response to the COVID-19 crisis
Note on expected credit loss provisioning under a global pandemic
Research paper on COVID-19 and corporate sector liquidity
Paper on public guarantees for bank lending in response to the COVID-19
pandemic
Leverage and margin spirals in fixed income markets during the COVID-19
crisis
FSB
FSB members take action to ensure continuity of critical financial services
functions
Report on financial stability implications and policy measures taken in
response to COVID-19
FSB Sub-Saharan Africa group held a conference call to discuss regional
financial stability and the impact of COVID-19
IMF
Blog on global uncertainty related to COVID-19 reaching a record high
Blog on "Cash buffers for a rainy day" to tackle COVID-19-related challenges
Policy paper on enhancing the Emergency Financing Toolkit in relation to
responding to COVID-19
Executive Board Approves Proposals to Enhance the Fund’s Emergency
Financing Toolkit to US$100 Billion
IMF Executive Board approves immediate debt service relief for 25 countries
Blog post entitled "The Great Lockdown: Worst Economic Downturn Since
the Great Depression"
Blog on fiscal policies countries could employ to contain the damage from
COVID-19
Blog on Economic Policies for the COVID-19 WarIOSCO
Statement on Application of Accounting Standards during the COVID-19
Outbreak
Reprioritised IOSCO work programme addressing impact of COVID-19
Back to topBanking
Prudential
EU
EBA
Basel III monitoring report and report on liquidity coverage ratio
compliance, based on end-June 2019 data
Phase 1 of EBA technical package on reporting framework 2.10
Statement endorsing European Commission’s amendments to RTS on risk
weights for specialised lending exposures
Updated list of Other Systemically Important Institutions (O-SIIs)
Risk dashboard for Q4 2019, covering Q4 2019 data and summarising the
main risks and vulnerabilities in the EU banking sector ahead of the COVID-
19 crisis
Updated Guidelines on equivalence of non-EU authorities for participation in
supervisory colleges
ECB Central Bank
Euro area bank interest rate statistics for February 2020 published
ECB – SSM
Supervisory Banking Statistics for Q4 2019
Euro area bank lending survey
Int’l
BIS
Report on global liquidity indicators at end-December 2019
Progress report on banks' implementation of its principles for effective risk
data aggregation and reporting
Working paper on equity price volatility spillovers and capital buffers among
the G-SIBs
BIS Bulletin No. 1: Dollar funding costs during the COVID-19 crisis through
the lens of the FX swap market
Basel III monitoring results based on end-June 2019 data published by the
Basel Committee
Other
EU
EBA
Call for expression of interest for new Banking Stakeholder Group
Back to topCapital Markets
Prudential
EU
ESMA
Advice to the European Commission on inducements and costs and charges
disclosures under MiFID II
MiFID II Review report on position limits and position management
Consultation on clearing solutions for Pension Scheme Arrangements (PSAs)
under EMIR
Templates for quarterly non-equity systematic internaliser data
Consultation on central clearing solutions for Pension Scheme Arrangements
Publication of annual bond transparency calculations, systematic
internalisers calculations and new bond liquidity data
ESRB
April 2020 ESRB risk dashboard published
Int’l
BIS
Jurisdictions move towards full implementation of standards for financial
market infrastructures (FMIs)
Back to topInvestment Management
Conduct
EU
ESMA
Guidance on performance fees in UCITS and certain AIFs
Other
EU
ESMA
Technical Advice to the European Commission on weekly position
reports under MiFID II
Report emphasising the impact of costs on retail investor benefits
Back to top
Central Bank of Ireland
Domestic
The Central Bank of Ireland issued a statement on extension of payment
breaks
The Central Bank of Ireland published research on understanding SMEs in
the Covid-19 pandemic
Deputy Governor Sharon Donnery delivered a speech on the
macroeconomic effects of Covid-19 in Ireland
The Central Bank of Ireland published two research papers using real-
time data on economic impact of Covid-19
Back to topOther
Cyber
Int’l
FSB
Consultation on effective practices for cyber incident response and
recovery
Fintech
EU
EC
Initial consultation on a new digital finance strategy for Europe
Initial consultation on a retail payments strategy for Europe
Int’l
BIS
Report on how FinTech can support financial inclusion
CPMI paper on the payment aspects of financial inclusion in the
fintech era
Launch of the G20 TechSprint Initiative
FSB
Stage one report on enhancing cross-border payments delivered to
the G20
Consultation paper on the regulatory, supervisory and oversight
challenges raised by global stablecoins
Sustainable Finance
EU
EBA
Consultation on RTS for ESG related Disclosure Regulation
EC
Statement by the EU Technical Expert Group on Sustainable Finance:
Sustainable recovery from the COVID-19 pandemic requires the right tools
Consultation on the Commission's Renewed Sustainable Finance Strategy
ECOFIN
The European Council announced that it has adopted a unified EU
classification system for Sustainable Finance (Taxonomy)
ESMA
No Action Letter on the new ESG disclosure requirements under the BMR
and Opinion to the European Commission
Int’l
BIS
Results of a survey the Basel Committee undertook on its members'
initiatives on climate-related financial risks
IMF
IMF's Managing Director’s Opening Remarks at the Petersberg Climate
Dialogue XI
IOSCO Statement on IOSCO efforts to address issues around sustainability and
climate change
Other
EU
ECB - SSM
Letter from Andrea Enria, Chair of the Supervisory Board, to Mr Giegold,
MEP, on exchange of information with anti-money laundering authorities
ECB Central Bank
Statement on the extension of the monetary policy strategy review until
mid-2021
Announcement on Sweden joining ECB’s instant payments settlement
platform
Working paper on International capital flows at the security level, providing
evidence from the ECB’s Asset Purchase Programme
Research paper on global financial conditions and exchange rate risks
Working paper on the effect of household indebtedness on the response to
income and wealth shocks
Update on monetary developments in the euro area in March 2020
Research paper on a framework to assess the cross-border spillover effects
of macroprudential policies
ESMA
Report on enforcement of corporate disclosure for 2019
Int’l
BIS
Call for papers for joint BIS, BoE, ECB and IMF Conference on
"Spillovers in a 'low-for-long' world"
Back to topGlossary AFMs = Authorised Fund Managers AI = Artificial Intelligence AIFMD = Alternative Investment Fund Managers Directive AMF = Autorité des Marchés Financiers AML = Anti-Money Laundering APA = Approved Publication Arrangement AUM = Assets under management BCBS = Basel Committee on Banking Supervision BEAR = Banking Executive Accountability Regime BIS = Bank for International Settlements BMR = Benchmarks Regulation BRRD = Bank Recovery and Resolution Directive BTS = Binding Technical Standard BoE = Bank of England CBI = Central Bank of Ireland CCP = Central Counterparty CP= Consultation Paper CTF = Counter Terrorist Financing CISO = Chief Information Security Officer CMA = Competition and Markets Authority CMU = Capital Markets Union CNMV = Comisión Nacional del Mercado de Valores CQS = Credit Quality Step CRD = Capital Requirements Directive CRR = Capital Requirements Regulation CROE = Cyber Resilience Oversight Expectations CSSF = Commission de Surveillance du Secteur Financier CTP = Consolidated Tape Provider DB = Defined Benefit DC = Defined Contribution DP = Discussion Paper DPA = Data Protection Agency DRR = Digital Regulatory Reporting EBA = European Banking Authority ECB = European Central Bank ECOFIN = Economic and Financial Affairs Council EIOPA = European Insurance & Occupational Pensions Authority EMEA = Europe, Middle East and Africa EMIR = European Market Infrastructure Regulation EONIA = Euro Over Night Index Average ESAs = European Supervisory Authorities ESG: Environmental, Social, and Governance ESMA = European Securities & Markets Authority ESRB = European Systemic Risk Board ESTER = Euro Short-Term Rate EU = European Union
Euribor = Euro Interbank Offered Rate FAMR = Financial Advice Market Review FCA = Financial Conduct Authority FinPro = Financial Protection FGCA = Financial Guidance and Claims Act 2018 FMIs = Financial Market Infrastructures FOS = Financial Ombudsman Service FPC = Financial Policy Committee FRTB = Fundamental Review of the Trading Book FS = Financial Services FSA = Financial Services Authority FSB = Financial Stability Board GBP = British pound sterling GDP = Gross Domestic Product GDPR = General Data Protection Regulation GSIBs = Global Systemically Important Banks HMT = Her Majesty’s Treasury IAIS = International Association of Insurance Supervisors IASB = International Accounting Standards Board IBOR = Interbank Offered Rate ICAAP = Internal Capital Adequacy Assessment Process ICO = Information Commissioners Office ICS = Insurance Capital Standard IDD = Insurance Distribution Directive IFRS = International Financial Reporting Standards ILAAP = Internal Liquidity Adequacy Assessment Process IM = Initial Margin IOSCO = International Organization of Securities Commissions IPU = Intermediate Parent Undertaking IRB = Internal Ratings Based ISAs = Individual Savings Accounts IT = Information Technology JST = Joint Supervisory Teams KID = Key Information Document LEI = Legal Entity Identifier LIBOR = London Interbank Offered Rate LTV = Loan to Value M&A = Mergers and Acquisitions MI = Management Information MiFID = Markets in Financial Instruments Directive MiFIR = Markets in Financial Instruments Regulation MLD = Money Laundering Directive MoU = Memorandum of Understanding MREL = Minimum requirement for own funds and eligible liabilities MTF = Multilateral Trading Facility NCA = National Competent Authority NED = Non-Executive Director NGFS = Network for Greening the Financial System
NPLs = Non-performing Loans NSFR = Net Stable Funding Ratio OCIR – Operational Continuity in Resolution ORSA = Own Risk and Solvency Assessment OTF = Organised Trading Facility OTC = Over the counter PPI = Payment Protection Insurance PRA = Prudential Regulation Authority PRIF = Prudential Regime for Investment Firms PRIIPs = Packaged Retail Investment and Insurance Products PS = Policy Statement PSD2 = Revised (second) Payment Services Directive RDR = Retail Distribution Review RFRs = Risk-Free Rates RRM = Risk Reduction Measures RTGS = Real Time Gross Settlement RTS = Regulatory Technical Standard RW = Risk Weight SA = Standardised Approach SFTR = Securities Financing Transactions Regulation SI = Systematic Internaliser SIPPs = Self Invested Personal Pensions SM&CR = Senior Managers and Certification Regime SONIA = Sterling Overnight Index Average SRB = Single Resolution Board SRF = Single Resolution Fund SREP = Supervisory Review and Evaluation Process SS = Supervisory Statement SSM = Single Supervisory Mechanism TCA = Total Capital Adequacy TCFD = Task Force on Climate-related Financial Disclosures TIBER = Threat Intelligence-based Ethical Red Teaming TLAC = Total Loss-Absorbing Capital TMTP = Transitional Measure on Technical Provisions TPP = Third-Party Providers TPR = Temporary Permissions Regime TRIM = Targeted Review of Internal Models TRR = Temporary Recognition Regime UCITS = Undertakings for Collective Investments in Transferable Securities
Contacts Sean Smith Partner, Regulatory Risk +353 (01) 417 2306 E:seansmith1@deloitte.ie John Kernan Director, Regulatory Risk +353 (01) 417 8983 E:jkernan@deloitte.ie Ray Byrne Senior Manager –Regulatory Risk T: +353 1 4173892 E:rbyrne@deloitte.ie Senan Ryan Assistant Manager -Regulatory Risk T: +353 1 417 8630 E: senryan@deloitte.ie At Deloitte, we make an impact that matters for our clients, our people, our profession, and in the wider society by delivering the solutions and insights they need to address their most complex business challenges. As the largest global professional services and consulting network, with over 312,000 professionals in more than 150 countries, we bring world-class capabilities and high-quality services to our clients. In Ireland, Deloitte has over 3,000 people providing audit, tax, consulting, and corporate finance services to public and private clients spanning multiple industries. Our people have the leadership capabilities, experience and insight to collaborate with clients so they can move forward with confidence. This publication has been written in general terms and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this publication. Deloitte Ireland LLP accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Deloitte Ireland LLP is a limited liability partnership registered in Northern Ireland with registered number NC1499 and its registered office at 19 Bedford Street, Belfast BT2 7EJ, Northern Ireland. Deloitte Ireland LLP is the Ireland affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms. © 2020 Deloitte Ireland LLP. All rights reserved.
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