European Union (EU)
Basel Committee warns on potential missed deadlines
A “significant number” of Basel standards still need to be translated into domestic regulation as deadlines loom; problems with risk-weighted asset variability and inconsistency continue
Book notes: The euro and the battle of ideas, by Markus K Brunnermeier, Harold James and Jean-Pierre Landau
The authors have produced a fascinating and informative book that offers suggestions on how differences in beliefs can be overcome
ESRB unveils methodology for mapping shadow banks
ESRB presents report on European shadow banking and identifies major risks in sector; says major gaps in data still exist
Irish central bank warns of ‘negative and material’ impact from Brexit
Quarterly bulletin discusses channels through which UK vote to leave EU will affect Ireland; economy expected to grow by 4.9% this year and 3.7% next
Slovenian bail-in was legal, ECJ rules
Decision to wipe out some subordinated debt before recapitalising Slovenian banks in 2013 was challenged, but court finds it is compatible with EU law
Beyond banking: ESRB wants wider macro-prudential toolkit
European Systemic Risk Board argues for providing policy-makers with macro-prudential instruments extending to all forms of credit; lays out specific short- and long-term actions
Bank of Italy sees Brexit having little impact on country
Commercial and financial links between Britain and Italy are much more limited than other European countries, argues the Bank of Italy in its latest economic bulletin
Short-sale disclosure rules can distort securities prices, Bundesbank paper says
European Union transparency conditions may have led to distortions in the prices of German securities by deterring short-sellers, discussion paper argues
Dombret sees no need for ECB response to UK vote
Deutsche Bundesbank’s Andreas Dombret says it is not clear to what extent further easing would boost economy; warns against deeper European integration at any cost
EBA says number of women in senior positions at European banks is ‘very low’
EBA says most European banks lack diversity policies for senior management despite legal requirements; senior managers are more diverse by age but not by “geographical provenance”
Latvian central bank becomes lead authority on counterfeiting
New anti-counterfeiting centre will take over from police the task of detecting fake currency in all currencies; new approach will be more efficient and will not need more resources, bank says
EBA survey: Most European banks did not see Brexit as risk
European banks anticipated increasing most kinds of loan activity, results of an EBA questionnaire show; few bankers saw ‘Brexit’ as a major source of risk
Post-Brexit gilt auctions met with strong demand
Trends in gilt yields show UK debt still seen as ‘safe haven’ asset, says one analyst; others attribute strong demand in this week’s auctions to range of factors
Sarb deputy sees tail risks from Brexit but expects storm to calm
Daniel Mminele sees tail risk coming from asset liquidation by UK corporates and investment funds, but if clear communication is given, the ‘storm is likely to calm’
BiH central bank preparing for long road to EU membership
Central bank is looking to build its capabilities and expand staff to help support Bosnia and Herzegovina’s bid for EU membership, says governor
DMO will not change course after Brexit vote
Head of the UK Debt Management Office stresses principles of predictability and transparency ahead of gilt auctions next week; market reaction to S&P’s downgrade was “extremely muted”
Mersch stresses importance of democratic legitimacy in Europe
Executive board member at the ECB wants to see the decision-making process in Europe enhanced; calls for a “shared EU-wide identity”
Reasons to be optimistic after Brexit
Both the UK and Europe can turn Brexit to their advantage, despite all the negative media reports
EBA chair calls for ‘deep-rooted changes’ in bank culture
Andrea Enria, writing in the Directory of Financial Regulators 2016, says more must be done to confine episodes of misconduct to the past
Dombret warns clearing and securities depository business may leave London
Bundesbank’s Andreas Dombret said London’s pull as a venue for euro trading would “shrivel” if the UK voted to leave the EU; warned EBA would need to find “new home”
BoE injects £3.1bn liquidity into UK banks
First post-referendum liquidity auction sees banks draw £3.1 billion in long-term repos, mostly against the weakest eligible collateral class
Bank of Israel sees ‘Brexit’ increasing risks to outlook
Monetary committee warns it is too early to tell whether short-term effect on financial markets has run its course; Flug stresses both central bank and finance ministry “keeping close watch”
Dombrovskis replaces Hill in leading work on Capital Markets Union
Britain’s European finance commissioner resigns following referendum to be replaced by former Latvian PM; political timetable likely to delay further integration moves, analyst says
Analysts see intervention challenge for central banks
Following the fallout of EU referendum result, central banks step in to stabilise currency movements; analysts expect volatility to continue, but see challenges to intervention