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Global regulators have called on the EU and ISSB to make their climate disclosures interoperable to avoid competing norms confusing cross-border investors. An advisory body is due to present technical guidance to the European Commission on how to implement the disclosures. The ISSB hopes the EU could move towards its definition of materiality, which is drawn from accounting norms already being applied by EU companies in financial statements. The U.S. Securities and Exchange Commission, however, is facing pressure to ditch Scope 3 from its draft climate disclosures. It said it will apply the ISSB's climate disclosure standard in its work.

But there was also a wider question for the officials: could the energy companies' use of such complex instruments threaten financial stability? So the ECB has widened its scrutiny to examine potential domino effects, including on the banks which it supervises. read moreWhile ECB President Christine Lagarde said the ECB stood ready to provide liquidity to banks, she said it would not do the same for energy firms. "Energy companies pose specific risks not only to financial stability. Reuters GraphicsRating agency Moody's, meanwhile, said that energy companies did not provide enough information about their derivatives.

☆ UK asset managers urge company bosses to show restraint on pay hikes
▼ + stars: | 2022-11-10 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

"With the cost-of-living crisis hitting UK households, investors want to see companies show restraint on executive pay and bonuses, ensuring that executive pay packets are balanced against the experiences of their wider workforce, customers, and other stakeholders," Andrew Ninian, IA director for stewardship and corporate governance, said on Thursday. With UK inflation more than 10% at a 40-year high, the IA said pay increases in line with rising prices may not be appropriate. The retention and motivation of employees below the executive level will be key and board decisions could affect productivity of the whole workforce, the IA said. Companies should also spell out how executive bonuses will be linked to meeting their environment, social and governance targets in future years, the IA said. ($1 = 0.8740 pounds)Reporting by Huw Jones Editing by Bernadette BaumOur Standards: The Thomson Reuters Trust Principles.

☆ COP27: Regulators plan closer scrutiny of carbon markets
▼ + stars: | 2022-11-09 | by ( Huw Jones | ) www.reuters.com time to read: +3 min

LONDON, Nov 9 (Reuters) - Global securities regulators proposed closer scrutiny of carbon trading on Wednesday to deepen liquidity and prevent greenwashing in markets used by companies to offset their emissions to drive the transition to a net-zero economy. The International Organization of Securities Commissions (IOSCO), which groups securities regulators from across the world, made recommendations to improve 'compliance' carbon markets, and asked whether regulators should be more involved in 'voluntary' carbon markets. Compliance refers to regulated markets for trading permits on exchanges like ICE and EEX with the EU emission trading scheme (ETS). The unregulated voluntary market refers to companies buying credits from emission reducing projects like renewable energy or planting trees to offset their own emissions. "Some vulnerabilities in voluntary carbon markets have thus far prevented these markets from scaling to their full potential, while others can be of concern for regulators in their efforts to counter the risk of greenwashing," IOSCO said.

☆ EU considers tighter rules for commodity houses after margin turmoil
▼ + stars: | 2022-11-09 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

Commodity markets have long been governed by relatively light regulation, but the EU document seen by Reuters said waivers for big commodity players from rules that govern banks could be scrapped. The European Commission, the EU executive, is expected to set out proposals next month to update its European Market Infrastructure Regulation (EMIR) to 'incentivise' clearing in euro swaps to move from post-Brexit London. "Recent events in commodity markets have highlighted targeted areas where there may be merits in improving the EMIR framework," the European Commission informal document prepared for a meeting on Tuesday of EU member state officials said. Ideas include clearing houses having separate accounts for financial and non-financial customers to avoid "commingling of risk", though this could be costly to implement. Clearing houses, which stand between buyers and sellers to ensure completion of a trade and collect margin, could also be required to have a separate default fund for their commodities business.

☆ Morning Bid: Markets primed for gridlock
▼ + stars: | 2022-11-08 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Anshuman DagaGrowing expectations of a split government after the U.S. midterm elections are supporting U.S. shares, while Asian markets stubbornly cling onto hopes that China will relax its strict pandemic curbs. Banking stocks could be in focus in Europe on Tuesday after the European Central Bank's top supervisor Andrea Enria said the ECB is carefully scrutinising euro zone banks' payout plans as the outlook for the 19-nation currency bloc's economy weakens. For global markets, the U.S. midterm elections will be the big event to monitor. And analysts say Republicans could also pick up the one seat they need to win control of the Senate. Asian shares ticked higher on Tuesday, encouraged by gains on Wall Street and hopes of China's eventual economic reopening.

☆ We're not 'inflation nutters,' top Bank of England economist says
▼ + stars: | 2022-11-08 | by ( Elliot Smith | ) www.cnbc.com time to read: +1 min

The Bank of England accepted a record amount of gilts at a reverse auction on Wednesday. LONDON — Bank of England policymakers are not "inflation nutters" but tightening of monetary policy is necessary to prevent surging prices becoming entrenched in the economy, the central bank's Chief Economist Huw Pill said Tuesday. "We're not meant to be inflation nutters. We are meant to sort of manage this trade-off in a way that avoids unnecessary, counterproductive maybe, disruptions to the real economy," Pill said at a conference organized by Swiss bank UBS . The Bank of England has come under criticism for being too slow off the mark in its efforts to rein in sky-high inflation.

☆ BoE's Pill sees no victory over inflation yet but recession coming
▼ + stars: | 2022-11-08 | by ( ) www.reuters.com time to read: +1 min

"I think we cannot declare victory against second-round effects, but we are entering a recession," Huw Pill said at a conference organised by the bank UBS on Tuesday. But the central bank also told investors that they were pricing in too many interest rate increases in the future, a message that Pill said was an attempt to give a more realistic view of where Bank Rate was heading. "We're not meant to be inflation nutters," Pill said. "We are meant to sort of manage this trade-off in a way that avoids unnecessary, counterproductive maybe, disruptions to the real economy." Pill said he was sceptical that front-loading interest rate increases could bring about an "immaculate disinflation" with no real-world consequences, addressing criticism that the BoE had been too slow to raise borrowing costs.

☆ Sterling slips as dollar edges higher, with all eyes on U.S.
▼ + stars: | 2022-11-08 | by ( Harry Robertson | ) www.reuters.com time to read: +2 min

LONDON, Nov 8 (Reuters) - The British pound fell on Tuesday as the dollar rose, with investors focused on U.S. inflation figures and the midterm elections. Sterling was down 0.23% against the dollar to $1.1489 in the morning session in Europe, having earlier fallen more than 0.5%. The fall came as the dollar index rose 0.1% to 110.28. Sharma said he thought the dollar had further to rise, meaning the pound should fall. Analysts said the British government's fiscal statement, due next week, could trigger volatility in sterling and other British assets.

☆ EU backs watering down of final Basel bank capital rules
▼ + stars: | 2022-11-08 | by ( Huw Jones | ) www.reuters.com time to read: +4 min

LONDON, Nov 8 (Reuters) - European Union member states have backed a temporary watering down and two-year delay to 2025 for the final leg of the globally agreed Basel III bank capital rules, the Czech EU presidency said on Tuesday. EU states will now negotiate a final deal with the European Parliament in early 2023. Most of the Basel III rules, a set of tougher capital rules for banks after the global financial crisis more than a decade ago, have already been implemented. EU ministers backed a two-year delay to the start date for rolling out the final rules, pushing it back to January, 2025. Smaller banks would benefit from simpler disclosure, and EU states pushed back against attempts at stricter EU harmonisation in checking whether top bank staff are 'fit and proper'.

☆ Guest view: Climate finance club hands over baton
▼ + stars: | 2022-11-08 | by ( Huw Van Steenis | ) www.reuters.com time to read: +7 min

A year after financial institutions joined forces to lower carbon emissions as part of the Glasgow Financial Alliance for Net Zero, the initiative faces criticism from all sides. But the initiative is starting to hit the limits of what financial institutions can achieve through voluntary cooperation. Chief executives of financial institutions worry that participating in GFANZ opens them up to accusations of anti-competitive behaviour and litigation risk. It’s for politicians to set the legislative framework and financial institutions to abide by it. This could double or treble by increasing development banks’ capital, by changing their capital frameworks and mandates, or through smarter public-private partnerships.

☆ Bank of England wants more transparency for 'non banks' after gilts turmoil
▼ + stars: | 2022-11-07 | by ( Huw Jones | ) www.reuters.com time to read: +4 min

[1/3] Traders work on the trading floor of Barclays Bank at Canary Wharf in London, Britain December 7, 2018. It shone a light on the less regulated global $200 trillion 'non-bank' sector which is made up of pension funds, insurers and different types of investment funds, and spans borders. The onus for building resilience in the non-bank system sits first and foremost with the firms themselves," Breeden added. Banks and non-banks also need to improve stress-testing for risks, she added. Toks Oyebode, executive director for regulatory affairs at JPMorgan bank, said steps outlined by Breeden and other regulators, such as regarding margining, were timely.

☆ More transparency needed for 'non banks' after gilts turmoil, says Bank of England
▼ + stars: | 2022-11-07 | by ( Huw Jones | ) www.reuters.com time to read: +3 min

It shone a light on the sprawling and less regulated 'non-bank' financial sector which is made up of pension funds, insurers and different types of investment funds, and spans borders. The onus for building resilience in the non-bank system sits first and foremost with the firms themselves," Breeden added. "Beyond improving transparency, regulators will need to consider how best to ensure leverage is well managed. Banks and non-banks also need to improve stress-testing for risks, she added. Reporting by Huw Jones Editing by Gareth Jones and Toby ChopraOur Standards: The Thomson Reuters Trust Principles.

☆ More transparency in 'non banks' a first step after gilts turmoil, says Bank of England
▼ + stars: | 2022-11-07 | by ( ) www.reuters.com time to read: +1 min

LONDON, Nov 7 (Reuters) - Improving transparency of 'non-banks' such as pension funds is a first step in applying lessons from recent turmoil in Britain's government bond market, Bank of England executive director Sarah Breeden said on Monday. It shone a light on the sprawling and less regulated 'non-bank' financial sector made up of pension funds, insurers and different types of investment funds. Breeden said the LDI issues were a reminder of the "systemic risks" posed by poorly-managed leverage in the non-bank financial system where there is "all too often" excessive risk taking alongside improper liquidity risk management. "Transparency is an important first step. Reporting by Huw Jones Editing by Gareth Jones and Toby ChopraOur Standards: The Thomson Reuters Trust Principles.

☆ UK banks were slow to pass on rate hikes to savers, says watchdog
▼ + stars: | 2022-11-07 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Nov 7 (Reuters) - Britain's banks were slow to start passing on increases in central bank interest rates to savers and consumers should consider switching to another UK lender, the Financial Conduct Authority said on Monday. Banks have been quick to pass on higher interest rates to their mortgage customers, but savers are also keen to get better returns after years of record low central bank interest rates. "It was a slow start," FCA Chief Executive Nikhil Rathi told parliament's Treasury Select Committee. FCA acting chair Richard Lloyd said data so far suggest that the pass through of higher rates to savers is not as bad as the watchdog might have feared. The number of customers in arrears, however, is still the lowest since 2007, though banks should be proactive in helping their customers, Rathi said.

☆ Morning Bid: Polls and prices
▼ + stars: | 2022-11-07 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike Dolan. Chinese stocks continued last week's tentative recovery, however, despite officials throwing cold water on any early end to draconian COVID lockdown policies. Some correction of the market's severe underperformance this year was about the only cogent reason given for the ongoing stock bounce. European Central Bank President Christine Lagarde and ECB board member Fabio Panetta both speak. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Analysis: Bank of England's recession warning turns spotlight to UK budget plan
▼ + stars: | 2022-11-04 | by ( William Schomberg | ) www.reuters.com time to read: +4 min

That would be a longer and shallower economic contraction than the ones that followed the COVID-19 lockdowns and the global financial crisis of 2007-09. But the backdrop of high inflation this time is limiting the policy options available to the government. Hunt has warned of tough decisions on taxes and spending as he prepares to announce the new government's first budget programme on Nov. 17. "This is not a recession we should be offsetting with lower interest rates and expansionary fiscal policy," Chadha said. Additional reporting by David Milliken;Writing by William Schomberg; Editing by Jon BoyleOur Standards: The Thomson Reuters Trust Principles.

☆ BoE's Pill says rates need to rise, but not to 5.25%
▼ + stars: | 2022-11-04 | by ( ) www.reuters.com time to read: +1 min

LONDON, Nov 4 (Reuters) - The Bank of England needs to raise interest rates further, but not as high as the 5.25% level which financial markets had priced in before the central bank's latest rate decision, BoE Chief Economist Huw Pill said on Friday. Pill was giving a presentation to businesses about the BoE's decision on Thursday to raise interest rates to 3% from 2.25% - its biggest rate rise since 1989 as it battles the highest inflation in 40 years and a potentially lengthy recession. Pill's remarks hewed closely to the line set out by Governor Andrew Bailey and in a statement agreed by the majority of the BoE's Monetary Policy Committee. "There is still more to be done ... (but) market pricing is a bit skewed, if you like, in the direction of higher rates than we think is appropriate," he added. Reporting by David Milliken; editing by William JamesOur Standards: The Thomson Reuters Trust Principles.

☆ Bank of England chief economist warns of a 'difficult trade-off' for inflation to hit 2%
▼ + stars: | 2022-11-04 | 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 EmailBank of England chief economist warns of a 'difficult trade-off' for inflation to hit 2%Huw Pill, chief economist at the Bank of England, discusses the central bank's latest rate hike and the tricky balancing act of tightening monetary policy combined with economic risks.

☆ Bank of England trying to curb inflation without too much pain-Pill
▼ + stars: | 2022-11-04 | by ( ) www.reuters.com time to read: +2 min

On Thursday, the BoE raised its benchmark rate by three quarters of a percentage point to 3.0% as it sought to combat risks from an inflation rate running above 10%. "I think we've had a clearly quite disturbed period in the UK markets, in the UK political economy, in the UK economy over the last few months," he told CNBC. "(We're) trying to re-anchor our own thinking in the more fundamental drivers ... I think we're trying to re-anchor our communication." The task of getting inflation under control was likely to be a painful one, Pill said.

☆ Markets need to 're-anchor their thinking': Bank of England chief economist hints that traders have it wrong
▼ + stars: | 2022-11-04 | by ( Elliot Smith | ) www.cnbc.com time to read: +3 min

The Bank of England has a 2% inflation target, but price rises hit a 40-year high of 10.1% in September and are expected to peak in the fourth quarter. LONDON — The Bank of England remains committed to its "key goal" of bringing down inflation, but hopes markets will "re-anchor" their interest rate expectations, Chief Economist Huw Pill told CNBC on Friday. "I think we're trying to re-anchor our communication around a forecast that emphasizes those more fundamental drivers," he said. Markets have stabilized somewhat since the instalment of former Finance Minister Rishi Sunak as prime minister. His return to a more conservative fiscal policy has in turn eased pressure on the Bank to act even more aggressively on inflation.

☆ Euronext Italian arm to become group-wide clearer from end 2023
▼ + stars: | 2022-11-03 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Nov 3 (Reuters) - Pan-European stock exchange Euronext (ENX.PA) said on Thursday that customers will be able to clear all share trades at its Italian arm from the end of 2023, a move that ends reliance on a London Stock Exchange Group (LSEG) unit in Paris. "This is the first milestone in the transformation of Euronext Clearing to create the Euronext clearing house of choice for its cash equity markets," Euronext said in a third quarter trading statement. Clearing in Euronext credit derivatives will follow in 2024. As many are likely to shift stock and derivatives trading to Italy given efficiencies from using one location. Earlier this week, Deutsche Boerse's Eurex Clearing offered payments to buy-side customers who relocate derivatives clearing from London in 2023 in anticipation of the EU legislation.

☆ UK watchdog warns banks over treatment of customers
▼ + stars: | 2022-11-03 | by ( ) www.reuters.com time to read: 1 min

LONDON, Nov 3 (Reuters) - Banks must learn lessons from the COVID-19 pandemic when it comes to helping customers struggling with Britain's cost of living crisis, the Financial Conduct Authority said on Thursday. "The FCA has already told 32 firms to make changes to improve the way they treat customers and so far, seven of these firms have voluntarily agreed to pay 12 million pounds ($13.51 million) in compensation to nearly 60,000 customers," the watchdog said in a statement. ($1 = 0.8885 pounds)Reporting by Huw Jones; editing by Jason NeelyOur Standards: The Thomson Reuters Trust Principles.

☆ EU seeks better alignment with global sustainability rules
▼ + stars: | 2022-11-03 | by ( Huw Jones | Nita Bhalla | ) www.reuters.com time to read: +2 min

LONDON, Nov 3 (Reuters) - The European Union sought on Thursday to reassure international companies it would seek to align its sustainability disclosure rules with a global initiative, after warnings from regulators over fragmenting capital markets. The International Sustainability Standards Board (ISSB) is writing global baseline standards for corporate disclosures on climate for use in non-EU countries such as Britain, while the United States is working on its own disclosure rules. "We want to see as much alignment as possible with the work of the International Sustainability Standards Board, even though as I have said Europe is likely to go further and faster to meet our more higher ambitions on climate," McGuinness said. She is moving to the next stage of the EU's green plans by assessing how best to encourage sustainable retail lending for small firms and households. "With the support of the European Banking Authority, we are examining what needs to be done to promote the growth of green loans and green mortgages," McGuinness said.

☆ Britain to go it alone for now on reining in 'shadow banking'
▼ + stars: | 2022-11-02 | by ( Huw Jones | ) www.reuters.com time to read: +5 min

Britain hopes the LDI crisis creates momentum for comprehensive global reform to improve data and liquidity in the sector. In Britain the Financial Conduct Authority (FCA) regulates UK-based managers of LDI funds, and The Pensions Regulator (TPR) regulates pension schemes. UK regulators face pushing ahead alone, for now, hoping global reforms eventually pressure others to follow suit. Most LDI funds are listed in European Union states like Luxembourg and Ireland, meaning structural changes would rely on the bloc. The Central Bank of Ireland said it has stepped up data collection, analysis and engagement with LDI funds.

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