Europe’s regulatory priorities | KPMG | BE

Europe’s regulatory priorities

Europe’s regulatory priorities

The European Commission has recently published its updated work programme for 2018, outlining the regulatory priorities for the year ahead.

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Lighthouse beneath blue sky

The European Commission has recently published its updated work programme for 2018, outlining the regulatory priorities for the year ahead. The priorities contain a mixture of the new and the old. With the European Parliament elections in 2019 this is the European Commission's last push to complete actions under its `jobs and growth' mandate started in 2014.

Many of the `new' elements build on existing programmes under Capital Markets Union (CMU) and Banking Union. However others reflect the European Commission laying the ground for the next phase of the EU27's development after Brexit, with ideas including extending the Euro area and a permanent European Finance Minister.

New areas of financial regulation include proposals covering sustainable finance, FinTech, secondary market for non-performing loans, EU sovereign bond-backed securities and a rethink of funds distribution.

Priority existing proposals for progress include all the bank capital measures (including leverage ratio, net stable funding ratio and loss-absorbency), CCP resolution, deposit insurance, insolvencies, pan-European personal pensions, clearing rules, and the packages of tax reforms including common consolidated corporate tax base and mandatory exchange of information.

Less common is the withdrawal of a major proposal, but the European Commission confirms that the bank ring-fencing rules based on the recommendations of the Liikanen report have been scrapped. Here the Commission cites that the rules are no longer needed as other measures have been taken to improve the financial stability of the sector.

The European Commission's plans are ambitious, and experience shows that getting agreements with the European Parliament and member states on new rules is taking longer than expected.

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