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Regulatory agenda

Regulatory agenda

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

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

These priorities are a mixture of the new and the old. The European Commission has been operating under its jobs and growth' mandate since 2014 and this is the final push before European Parliamentary elections in 2019.

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 groundwork 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.

Existing proposals, which have been prioritized, 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.

In another development the European Commission has confirmed that the bank ring-fencing rules based on the recommendations of the Liikanen report have been scrapped, on the basis 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. 

In Ireland, the Central Bank has given some insight into its supervisory agenda for 2018. In recent speeches Mr Michael Hodson, Director of Asset Management Supervision at the Central Bank has set out the Central Bank’s supervisory priorities for the sector for 2018. Again it is a mixture of the new and old. The key themes include a continuation of the focus on outsourcing, MiFID II implementation, Brexit resilience, investor money regulation and fund governance.

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