Executive summary
Welcome to this edition of "Being better informed", our monthly FS regulatory, accounting and audit bulletin, which aims to keep you up to speed with significant developments and their implications across all the financial services sectors.
The Liikanen Report published in early October was rather overshadowed by discussions on the EU's banking union proposals. But the EC is likely to adopt many, if not all, of the expert group's recommendations and these will bring significant structural changes to the EU banking landscape. Consequently, EU banks need to consider the long-term operational and strategic impacts sooner rather than later.
The EP's delay of its Omnibus II vote until March 2013 further validated many insurers' concerns about the viability of the 1 January 2014 Solvency II implementation date. The EC has yet to confirm another Solvency II deferral, but the market and regulators are already considering 1 January 2015, or even 2016, as new implementation dates.
October saw the launch of an EU consultation on extending RRP requirements to non-bank entities. The consultation suggests that FMIs, G-SIIs and asset managers should begin to reconceptualise their business models so they are not too big – or too interconnected –to fail.
The EBA published the results of its capital exercise and a stakeholder group position paper on CRD IV liquidity rules, which will inform the CRD IV/CRR trialogue negotiations. In this context, the latest Basel III progress report for the next G20 summit raised some questions on the proposed EU regime.
The SSR came into force on 1 November, and ESMA published notices identifying exempted shares, thresholds for sovereign issuers, links to national supervisors' websites and an updated Q & A.
The Council moved ahead to adopt the financial transaction tax and the EC issued a draft Decision to this effect.
In the UK, the BoE published The PRA's Approach to Insurance Supervision and The PRA's Approach to Bank Supervision, along with the FSA's Journey to the FCA – all of which are summarised in this month's Feature. The Feature may be insightful to those outside the UK who are monitoring changes to their own national supervisors' approaches.
As we approach the year end, many EU legislative initiatives are not going to meet their deadlines, but are progressing. Regulatory uncertainty remains a challenge for firms that want to get on with operationalising changes, so they can return to tending their customers' needs and investors' demands for a return to profitability.
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