The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has on 28 March published its Final Report on the European Union Carbon Market (EU carbon market). The Report’s analysis did not find any current major deficiencies in the functioning of the EU carbon market based on the data available. However, ESMA’s analysis of the market has led it to put forward a number of policy recommendations to improve market transparency and monitoring. Continue reading…

Agustín Carstens, General Manager at the Bank for International Settlements, recently delivered a speech on the topic of inflation at the International Center for Monetary and Banking Studies Geneva on 5 April 2022. Being the BIS’s General Manager, it will not come as a surprise to you that I have decided to devote my presentation to the issue that is top of mind for policymakers around the world, namely the return of inflation. After more than a decade of struggling to bring inflation up to target, central banks now face the opposite problem. The shift in the inflationary environment has been remarkable. If you had asked me a year ago to lay out the key challenges for the global economy, I could have given you a long list, but high inflation would not have made the cut.  Continue reading…

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…