by Lieve Lowet & Lorenz Van Roosbroeck

Early February, the Actuarial Association of Europe (AAE) hosted a webinar entitled Sustainability and Climate Change – what does it mean for risk management in Insurance and Pensions? The webinar centered around issues of sustainability and the climate crisis. Since the EU Commission officially endorsed ESG considerations in its 2017 sustainable finance package, reinforced by the priorities of the current Commission and the Green Deal in 2019, the discussions are proliferating — up until the point that it is nearly impossible to follow all developments. As such, clear and distinct frameworks which capture the essence of the challenges we face are needed. It is within this context that the aforementioned webinar sparked interest as one of the speakers introduced a concept and measurement tool from ‘down-under’. More specifically, Gregorio Gil de Rozas, Instituto de Actuarios Espanoles, introduced the specific case of The Australian Actuaries Intergenerational Equity Index or AAIEI. After some research, it appears that The Actuaries Institute — i.e. the professional body representing the actuarial profession in Australia — published a Green Paper under the same name as the presentation, entitled Mind the Gap — The Australian Actuaries Intergenerational Equity Index (AAIEI). Here, we bear emphasis on this topic of intergenerational equity for several reasons.
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The European Commission’s ‘Freeze and Seize’ Task Force, set up to ensure EU-level coordination to implement sanctions against listed Russian and Belarussian oligarchs, has now stepped up its action at international level. It will work alongside the newly established ‘Russian Elites, Proxies, and Oligarchs (REPO)’ Task Force, under which the EU operates together with the G7 countries Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, as well as Australia. Cooperation between the European ‘Freeze and Seize’ Task Force and the international ‘REPO’ Task Force is essential to guarantee the efficiency of the sanctions taken on both sides of the Atlantic. The Commission is committed to work closely and coordinate with its partners to ensure effective cooperation on a global level. Continue reading…

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has on March 10th published its peer review report on the supervision of cross-border activities of investment firms. With this peer review, ESMA is also issuing Article 16 recommendations to the Cyprus Securities and Exchange Commission (CySEC), the first time ESMA has issued such recommendations to a National Competent Authority (NCA). ESMA identifies in the peer review the need for home NCAs to significantly improve their approach in the authorisation, ongoing supervision and enforcement work, relating to investment firm’s cross border activities. This includes calibrating their supervisory work to the nature, scale and complexity of those firms’ cross-border activities and the risks they pose. Continue reading…

The European Commission has opened a formal antitrust investigation to assess whether an agreement between Google and Meta (formerly Facebook) for online display advertising services may have breached EU competition rules. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: ”Many publishers rely on online display advertising to fund online content for consumers. Via the so-called “Jedi Blue” agreement between Google and Meta, a competing technology to Google’s Open Bidding may have been targeted with the aim to weaken it and exclude it from the market for displaying ads on publisher websites and apps. If confirmed by our investigation, this would restrict and distort competition in the already concentrated ad tech market, to the detriment of rival ad serving technologies, publishers and ultimately consumers.”
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On 16 December 2020, the Parliament and the Council adopted a regulation 1 which establishes a general regime of conditionality for the protection of the Union budget in the case of breaches of the principles of the rule of law in a Member State. In order to attain that objective, the regulation allows the Council, on a proposal from the Commission, to adopt protective measures such as the suspension of payments to be made from the Union budget or the suspension of the approval of one or more programmes to be paid from that budget. 2 Continue reading…

The Financial Stability Board (FSB) has published a discussion paper on February 22nd on debt overhang issues of non-financial corporates in the context of the COVID-19 pandemic. This follows the FSB’s report on COVID-19 support measures, published in April 2021, which noted the unprecedented level of debt of non-financial companies, resulting largely from massive credit provision by the public sector (both directly and through loan guarantees) during the pandemic. The report identified debt overhang as a significant risk that could arise from prolonged policy support measures. Continue reading…

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, publishes on February 15th the first Trends, Risks and Vulnerabilities (TRV) Report of 2022 and, in its outlook for 2022, continues to see high risks to institutional and retail investors of further, possibly significant, market corrections. The pandemic’s resurgence at the end of 2021 and an uncertain economic and monetary policy outlook are leading market participants to revisit their growth and market expectations. Going forward, we continue to see high risks to investors of further – possibly significant – market corrections as markets remain nervous and geopolitical tensions are rising. Continue reading…

by Mark Pieth

When Russia invaded Ukraine, the US and the EU announced economic sanctions, whereas official Switzerland announced that it would first have to analyse the new situation. Obviously, one would ask what the Swiss Government has been doing over the last few weeks when tensions rose. What is more, Switzerland announced it would take some measures to reduce the risk of circumvention of sanctions, but that it did not envisage blocking funds of persons close to the Russian regime. Now, this may be understandable from a purely economic point of view. Isn’t Switzerland the seat of Nordstream 1 and 2, isn’t a large part of Russian oil traded through Geneva, including by Russian oligarchs? The official Swiss attitude does, however, echo the experiences with this country during the Second World War, large parts of the Cold War and Apartheid: neutrality was considered a licence to do business with anyone, including criminal regimes.
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by Michel Klompmaker

At the moment, the Ukrainian capital Kiev is under siege and being bombed. The West is watching and Putin can carry out his long-devised plan without too much opposition. Let’s not pretend that this has been a big surprise. It quickly brings to mind 1938 when the ‘Anschluss’ through Austria with Germany became a fact. Putin has waited neatly with this invasion until after the Olympic Games in China so as not to embarrass his supporters there. One dictator learns the tricks of another dictator. China is now going to learn from the reaction of the West and can benefit from this, in the very important step for China, namely the ‘Anschluss’ of Taiwan to the People’s Republic of China that is on the program. Let’s not be naive and think that this is a utopia and that the intake can be prevented through consultation. Time for the West to wonder if we shouldn’t divide the world in two… a part that is undesirable and objectionable to the West and a part that is as little involved as possible with such dictatorships. This means that many western knots have to be counted… no more SWIFT, but also no more sponsors like Gazprom to admit to the Champions League. But banks are also embarrassed, because all those billions of money are stored somewhere. Meanwhile, the European Union has changed the sanctions regime. Continue reading…