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☆ EU court backs move to prise open bloc's decision making
▼ + stars: | 2023-01-25 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Jan 25 (Reuters) - European Union member states must grant public access to documents circulated in their working groups for adopting laws, an EU court ruled on Wednesday, as efforts to prise open the bloc's legislative machine make further progress. EU states, collectively known as the Council, have joint say with the European Parliament on approving laws proposed by the European Commission and which apply across the 27-country bloc. Decisions are often agreed in meetings away from the public gaze and then later rubber-stamped in public. Emilio De Capitani, a former official at the European Parliament, brought a case against the Council's refusal to make available documents used for approving an amendment to an EU law on annual financial statements. Trilogues are meetings between parliament and EU states to thrash out the final version of a law that will come into effect - a crucial stage where last minute deals are struck and new elements can be included.

☆ EU financial services need shake-up to benefit retail investors, top official says
▼ + stars: | 2023-01-24 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

[1/2] Mairead McGuinness, EU commissioner of financial services, financial stability and Capital Markets Union speaks during the European Parliament's plenary session in Brussels, Belgium November 23, 2020. This could include the ban on "inducements" or commission as part of efforts to give EU retail investors better value for money. Insurers and banks have already begun lining up to lobby against the potential ban on this sales model, which dominates how retail financial products are sold in the EU. Products sold through inducements are on average 35% more expensive than products sold where no inducements are paid, she said. EU states and the European Parliament would have the final say on any proposal to ban inducements.

☆ EU lawmakers back 'prohibitive' capital rules for cryptoassets
▼ + stars: | 2023-01-24 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Jan 24 (Reuters) - European Union lawmakers backed a draft law on Tuesday to implement the final leg of post-financial global bank capital rules, adding "prohibitive" requirements to cover risks from cryptoassets. The European Parliament's economic affairs committee approved a draft law to implement Basel III capital rules from January 2025, though backing several temporary divergences to give banks more time to adapt. EU states have already approved their version of the draft law, and lawmakers will now negotiate a final text with member states, with further tweaks expected. EU states have taken a more accommodative approach to when foreign banks serving customers in the bloc should open a branch, or convert a branch into a more heavily capitalised subsidiary, with EU lawmakers on Tuesday taking a harder line. The EU is keen to build up "strategic autonomy" in capital markets as it faces a competing financial centre on its doorstep after Brexit.

[1/2] People walk along the South Bank with the Houses of Parliament in the distance, in London, Britain, January 17, 2023. Some hires need vetting by the Financial Conduct Authority (FCA) and the Bank of England (BoE). Britain introduced the accountability rules in 2016 in response to public anger that so few individuals were punished over taxpayers having to bail out banks in the 2007-2008 financial crisis. Regulators sought to reassure that the rules would not be used to put "heads on sticks" and discourage people from taking on senior roles. Reporting by Iain Withers and Huw Jones, editing by Sinead Cruise and Alexander SmithOur Standards: The Thomson Reuters Trust Principles.

☆ EU lawmakers to vote on tighter crypto, ESG rules for banks
▼ + stars: | 2023-01-23 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

One amendment states that banks would have to apply a risk-weighting of 1,250% of capital to cryptoassets exposures, meaning enough to cover a complete loss in their value. This is in line with recommendations from the global Basel Committee of banking regulators in December. The amendment requires the EU's executive European Commission to publish a report by June 2023 analysing the possibility of introducing prudential limits on banks' exposures to shadow banks. The draft law introduces a new "fit and proper" regime for appointing bankers, with amendments saying there should be targets for a bank's management body. After Tuesday's vote the lawmakers and EU states will thrash out a final deal which would come into effect in 2025.

☆ 'The tail risks have come off,' says Oliver Wyman vice chair
▼ + stars: | 2023-01-20 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via Email'The tail risks have come off,' says Oliver Wyman vice chairHuw van Steenis, vice chair at consultancy Oliver Wyman, discusses lingering market risks as China reopens, inflation comes off and a warmer winter helps dilute energy needs.

☆ Analysis: Frankfurt 'STIRs' up euro clearing battle with London
▼ + stars: | 2023-01-20 | by ( Huw Jones | ) www.reuters.com time to read: +5 min

LONDON, Jan 20 (Reuters) - Frankfurt expands derivatives clearing on Monday in an early test of how well European Union ambitions to lure trillions of euros of business from London could work in practice. Clarus Graphic on Swaps Clearing'TAKE YEARS'ESMA will calibrate how much of each of the three specified derivatives contracts banks must clear in the bloc. The other two are euro credit default swaps (CDS), also cleared by ICE in London and Chicago, and euro interest rate swaps (IRS), dominated by London Stock Exchange Group's LCH in London. Brussels is allowing EU banks to continue clearing in London until June 2025, though industry officials say an extension is inevitable given the time it could take for enough clearing to shift given banks' hostility. ICE said that by the third quarter of last year, ICE in Chicago cleared 88% of euro CDS instruments, with 8% at ICE in London, and 4% at LCH.

☆ Brexit lifts number of million-euro-a-year bankers in EU, watchdog says
▼ + stars: | 2023-01-19 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

REUTERS/Dado Ruvic/IllustrationLONDON, Jan 19 (Reuters) - More Brexit-related relocations from London and rise in trading increased the number of bankers earning more than a million euros a year in the European Union by more than 40% in 2021, the bloc's banking watchdog said on Thursday. The European Banking Authority (EBA) said the number of bankers earning over a million euros ($1.08 million) rose to 1,957 in 2021 from 1,383 in 2020, up 41.5% to reach the highest level since the watchdog began collecting such data in 2010. Germany still has most top earning bankers, with 589, followed by France with 371 and Italy 351. Most high earners - 1,516 - received remuneration within the payment bracket from 1 million to 2 million euros, with the highest payment bracket ranging from 14 million to 15 million euros, EBA said. EBA Graphic on Banker Pay($1 = 0.9245 euros)Reporting by Huw Jones Editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.

☆ Davos 2023: State Street CEO says had no idea about leverage in LDI funds
▼ + stars: | 2023-01-17 | by ( ) www.reuters.com time to read: +1 min

LONDON, Jan 17 (Reuters) - State Street said on Tuesday it was unaware how much leverage was tied up in liability-driven investment (LDI) funds which came under extreme stress last year after British government bond yields rocketed. LDI funds are used by UK pension funds to help ensure they can pay pensions. "We had no idea how much leverage was in the system," State Street CEO Ronald O'Hanley told a panel at the World Economic Forum in Davos. State Street manages LDI products and provides collateral services for them, he said. "The challenge there wasn't the product, the challenge there was leverage and this is the problem," O'Hanley said.

LONDON, Jan 16 (Reuters) - Britain's proposed changes to capital rules for insurers could lead to the government having to bail out policyholders, as happened 20 years ago after the near-collapse of life assurance company Equitable Life, the Bank of England said on Monday. "I will mention Equitable Life ... it can happen," Bailey added . Equitable Life, established in 1762, closed to new customers in 2000 and almost collapsed after making unsustainable guarantees to policyholders. The government, however, had made its decision on insurance reform and there was a need to move forward now, Woods said. The BoE wanted to be "very closely engaged" on the detail of those reforms, Woods said.

☆ Germany joins battle against EU ban on financial product commission
▼ + stars: | 2023-01-16 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

EU financial services chief Mairead McGuinness set out last month a detailed case in favour of banning "inducements", or commission paid by a bank or insurer to financial advisers who have sold their products. McGuinness could propose a ban in her upcoming "retail investment strategy" to deepen the bloc's capital market by attracting more retail investors. EU states and the European Parliament would have the final say on any ban. "Banning inducements in general would mean a serious setback to efforts to increase retail investment in the capital markets," he added. Insurance Europe, an insurance industry body, said an outright EU-wide ban would undermine the goals of the retail investment strategy.

☆ BoE sceptical over digital pound as euro zone backs work on digital euro
▼ + stars: | 2023-01-16 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Jan 16 (Reuters) - Bank of England Governor Andrew Bailey questioned the need for a digital pound on Monday just as euro zone finance ministers backed further preparatory work on a digital euro. Bailey told parliament's Treasury Select Committee on Monday that he was not sure if a digital pound was needed for now. "I think it's an open question whether a wholesale digital central bank currency is needed because we've got a wholesale central bank money settlement system with a major upgrade," Bailey said. Meanwhile, euro zone finance ministers on Monday said they backed continued preparatory work for a potential digital euro, now being studied by the European Central Bank. The EU is due to publish a draft law this year on how a digital euro would fit into the bloc's laws.

Jan 11 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. Another downside surprise, however, and Asian markets could open with an added spring in their step on Wednesday. chartThe scope of inflation data this week is broad. U.S. and other central bankers insist they cannot let up in the fight against rising prices, despite growing evidence inflation has peaked. The Aussie dollar hit a four-month high of $0.6950 on Monday and unsurprisingly eased back on Tuesday ahead of the inflation figures.

☆ Britain to push ahead with readying ground for a digital pound
▼ + stars: | 2023-01-10 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Jan 10 (Reuters) - Getting the design of a digital pound right is a bigger priority than a rapid launch, Britain's Financial Services Minister Andrew Griffith said on Tuesday. China has pushed ahead with piloting a digital yuan and the European Central Bank is studying a digital euro, piling pressure on Britain to do the same and keep abreast of advances in financial technology. The finance ministry is due to launch in the coming weeks a public consultation on the attributes of a digital pound. A digital pound raised many public policy issues, he said. The first case use of a digital pound would probably be in the settlement of wholesale financial transactions, he added.

☆ Boe's Pill: Not ready to say world has shifted to persistently higher inflation
▼ + stars: | 2023-01-10 | by ( Michael S. Derby | ) www.reuters.com time to read: 1 min

NEW YORK, Jan 9 (Reuters) - Bank of England Chief Economist Huw Pill said on Monday that it's too soon to say that the current economic environment has shifted to one where inflation is persistently higher than it has been in recent decades. It is "going too far" to argue inflation has become unanchored and central banks have lost the ability to bring price pressures back down, Pill said in comments before a gathering held by the Money Marketeers of New York. Reporting by Michael S. Derby; Editing by Sandra MalerOur Standards: The Thomson Reuters Trust Principles.

☆ UK jobs market softens again in December - REC
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +2 min

The survey, watched closely by the BoE, also showed an easing in wage pressures. "A slowdown in permanent placements is not unusual in December, but this one comes as part of a wider softening trend in the permanent market," said REC chief executive Neil Carberry. "Recruiters tell us that this was enhanced by firms pushing hiring activity back into January in the face of high inflation and economic uncertainty." Britain's economy looks set to contract in 2023, according to most economists polled by Reuters, and business surveys show cooling price pressures. The REC survey showed placements of permanent staff contracted at the fastest rate since January 2021.

☆ Investors wait to hear from Fed Chair Powell at central banking forum
▼ + stars: | 2023-01-10 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +3 min

Powell is set to participate in a panel discussion on central bank independence at an event hosted by Sweden’s central bank, the Sveriges Riksbank. It will also be attended by Bank of England Governor Andrew Bailey and European Central Bank member Isabel Schnabel, among others. That has enabled the Fed to start easing back on the size of its historically high rate hikes meant to cool the economy and fight rising prices. These three central banks are fighting in different conditions, but they share a similar battle strategy: Keep tightening. Thursday’s Consumer Price Index for December — which will be the new year’s first check on inflation — will also provide helpful clues to investors about whether US price hikes are sufficiently cooling.

☆ Morning Bid: Seeing through another shock
▼ + stars: | 2023-01-09 | by ( ) www.reuters.com time to read: +4 min

Brazil's weekend political shock reminds world markets of fragile geopolitics, but investors more broadly appear happier to stick with a new year narrative of recovery from a dire 2022. Days after his inauguration, leftist President Luiz Inacio Lula da Silva announced a federal security intervention in Brasilia until Jan. 31. Fed chair Jerome Powell speaks on Tuesday but the big data release of this week is Thursday's consumer price report. The gap between positive euro zone economic surprise indices and negative U.S. equivalents is now at its widest since June. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Morning Bid: Goodbye to all that
▼ + stars: | 2023-01-09 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Tom Westbrook:After three years, travellers are streaming into China by air, land and sea. the official newspaper of the Chinese Communist Party, the People's Daily, wrote on Sunday. The yuan punched through its 200-day moving average to its highest since August, and the dollar was in retreat wherever Chinese tourists are expected. The twin hopes, then, of a gentler Fed and reviving China are holding recession fears at bay. In emerging markets, focus is on the open of trade in the Brazilian real after hundreds of supporters of far-right former President Jair Bolsonaro were arrested during an invasion of the country's Congress, presidential palace and Supreme Court.

☆ BoE's Pill sees risk of persistent inflation, even if gas prices fall
▼ + stars: | 2023-01-09 | by ( David Milliken | ) www.reuters.com time to read: +4 min

Markets see BoE rates peaking at 4.5% in June, while economists polled by Reuters in December predicted a peak of 4.25% in the second quarter of 2023. The BoE also forecast headline inflation will fall this year as natural gas prices level off. Natural gas prices in Britain , which spiked in response to Russia's invasion of Ukraine last February, have retreated to around the same level as a year ago, but are several times higher than in early 2021. Pill said that even if natural gas prices eased further, that would not guarantee that underlying price pressures would fall enough for inflation to return to its 2% target. If businesses and workers did not pursue moderate price and wage strategies, Pill said the BoE would have to keep raising rates.

☆ EU financial services chief favours banning sales inducements on investment products
▼ + stars: | 2023-01-06 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Jan 6 (Reuters) - A European Union ban on inducements for recommending sales of financial products could cut costs for retail customers by more than a third, the bloc's financial services chief Mairead McGuinness has said. McGuinness is due to set out a new retail investment strategy to help deepen the bloc's capital market. Ferber told McGuinness in October he would strongly advise against banning inducements. McGuinness said she was still assessing different policy options, but the current dominant inducement-based model for selling retail investment products often means products are more costly than other cheaper alternatives on the market. "The comprehensive retail investment study has found that products on which inducements are paid are - on average - about 35% more expensive than investment products on which no inducements are paid," McGuinness said in her letter.

☆ Wall St ends higher, Treasury yields rise after data flurry
▼ + stars: | 2022-12-23 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

[1/2] The Wall Street entrance to the New York Stock Exchange (NYSE) is seen in New York City, U.S., November 15, 2022. "Everyone’s waiting for 2023 to have a fresh take again," said Paul Kim, chief executive of Simplify ETFs in New York. "Inflation looks fairly sticky and interest rates keep mounting up," Kim said. "And the punchline is (interest) rates will have to be higher for longer." Treasury yields resumed their upward trajectory after data showed personal income rising more than expected and October inflation data was upwardly revised.

☆ EU states reject ban on 'payment-for-order-flow' share trades
▼ + stars: | 2022-12-20 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Dec 20 (Reuters) - European Union member states on Tuesday rejected plans to ban brokers earning fees in return for directing share trades to specific trading platforms, part of a sweeping stock market overhaul to compete better with post-Brexit London. But representatives from EU states on Tuesday rejected a bloc-wide ban. "The regulation leaves a discretion to member states to allow this practice only on their territory," a statement from member states said. EU states will now negotiate a final deal with the European Parliament on updating the securities rules, with further changes likely. Tapes should publish prices of executed trades, together with best bids and offers available at the time of a trade, as well as the European best bid and offers from the most competitive markets, EU states said.

Among the most prolific rulemakers was the European Union, which began to roll out sustainability rules for asset managers as part of a series of dictates aimed at ensuring the bloc hits its climate targets and helps rein in global warming. Regulatory scrutiny also broadened to include investment ratings and the labeling of sustainable investment funds. In the United States, for example, both Goldman Sachs Asset Management and BNY Mellon Investment Adviser were fined over ESG failures. ESG rules will also fast become mandatory rather than optional in 2023 - with the EU expected to push out 200 pages of guidance in January alone to help market participants use its green taxonomy, a list of environmentally friendly activities, and other ESG rules. However, this is only likely to happen in stages from 2023 given there are no global taxonomies or rules on what constitute sustainable investments.

☆ Wall St posts fourth straight drop, Treasury yields rise as recession fears weigh
▼ + stars: | 2022-12-19 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

[1/2] A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 14, 2022. "(Investors are) worried about recession and higher rates and there’s not a lot of news to reverse the trend." Emerging market stocks rose 0.02%. U.S. Treasury yields rose as investors considered how high the Federal Reserve will hike interest rates in its protracted battle against inflation. Gold inched lower in thin trading, as rising yields on expected future interest rate hikes helped offset weakness in the greenback.

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