On April 5th, the Financial Stability Board (FSB) published a statement welcoming the smooth transition away from LIBOR at the end of last year. The end of 2021 marked a major milestone in the transition away from LIBOR and the FSB welcomes the smooth transition to robust alternative rates across global markets, primarily overnight risk-free or nearly risk-free rates (RFRs). The absence of any significant market disruptions is a testament to the magnitude of market participants’ efforts and the level of attention from the regulators and industry bodies to support the transition to RFRs. Continue reading…

As heavy fighting and missile strikes continue to destroy critical civilian infrastructure, humanitarian needs in Ukraine remain extremely high. Despite access and security constraints, EU humanitarian partners are providing assistance to vulnerable people in different regions of Ukraine. The EU is allocating a further €50 million in humanitarian funding to support the people affected by Russia’s war on Ukraine, including €45 million for humanitarian projects in Ukraine and €5 million for Moldova. This brings the EU’s total humanitarian aid funding in response to the war to €143 million. This funding is part of the €1 billion support package pledged by the European Commission at last week’s global pledging event ‘Stand Up For Ukraine’.
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The financial fragmentation in the euro area that occurred at the start of the coronavirus (COVID-19) pandemic was reversed relatively quickly, the European Central Bank (ECB)’s latest report on Financial Integration and Structure in the Euro Area shows. Once pre-pandemic levels of integration were regained, financial integration increased further and remained resilient to pressure from further waves of infections. The most influential policy interventions that initially kept fragmentation contained, and then brought integration back to pre-pandemic levels, were the series of ECB monetary policy measures and the European Union (EU) agreement on a sizeable coronavirus recovery fund. Continue reading…

Akshata Murthy, the wife of British finance minister Rishi Sunak, said on Friday that she would stop avoiding British tax on her foreign income — bowing to pressure which her husband had earlier dismissed as a political smear. The public anger over Murthy’s tax status has been heightened by her husband’s decision to increase payroll taxes at a time when surging inflation leaves Britons facing the biggest cost-of-living squeeze since records began in 1956. Murthy, an Indian citizen, is eligible for so-called “non-domiciled” status in Britain, something available to foreign nationals who do not regard Britain as their permanent home. That in turn allowed her to opt to pay UK tax only on income she earned in or transferred to Britain. Continue reading…

The Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, has appointed Tiff Macklem, Governor of the Bank of Canada, as its new Chair, effective immediately. Mr. Macklem succeeds François Villeroy de Galhau, Governor of the Bank of France, who has chaired the GHOS since November 2019. He stepped down from the GHOS after being elected Chair of the Board of Directors of the Bank for International Settlements (BIS) in January. GHOS members expressed their thanks to Mr. Villeroy de Galhau for his leadership over the past three years, and look forward to working with Mr. Macklem. Continue reading…

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…

The Bank for International Settlements (BIS) has on March 30th announced that it will launch the 13th Triennial Central Bank Survey of Foreign Exchange and Over-The-Counter (OTC) Derivatives Markets on 1 April, 2022. More than 1,200 financial institutions in 52 reporting jurisdictions will contribute to the 2022 Triennial Survey.1 Data on turnover in foreign exchange and OTC interest rate derivatives markets will be collected from financial institutions in April 2022. Data on the outstanding notional amounts and gross market values of foreign exchange, interest rate, equity, commodity, credit and other OTC derivatives will be collected at the end of June 2022. Continue reading…

Authorities from France, Germany and Luxemburg carried out extensive measures to freeze EUR 120 million worth of assets linked to the investigation of a money laundering case in Lebanon, during an action day on 25 March. Five properties in Germany and France were seized as well as several bank accounts. Eurojust supported the judicial cooperation by setting up a joint investigation team (JIT) and organising three coordination meetings.

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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…

Banks are increasingly exploring opportunities for using artificial intelligence and machine learning (AI/ML). AI/ML technology is expected to increase banks’ operational efficiency and also facilitate improvements in risk management. While significant opportunities are emerging from the increasing use of AI/ML in many areas of banking, there are also risks and challenges associated with these techniques. Banks are still in the process of developing best practices for risk management. Given the increasing adoption of this technology as well as the potential risks, the Committee is analysing banks’ use of AI/ML and potential implications for bank supervision. Continue reading…