European Parliamentary Research Service Blog
financial markets
Plenary round-up – Strasbourg, April II 2019
Highlights of the April II plenary session (the last of the current legislature) included debates on the conclusions of the April 2019 European Council meeting on the withdrawal of the UK from the European Union, and the final debate in the series on the future of Europe with the Prime Minister of Latvia, Kisjanis Karins. Important debates also took place on the rule of law in Romania; failure to adopt an EU digital services tax; protecting the European elections against international cybersecurity threats; and on the possible extradition of Julian Assange. Continue reading
Fintech (financial technology) and the European Union: State of play and outlook
The financial technology (fintech) sector encompasses firms that use technology-based systems either to provide financial services and products directly, or to make the financial system more efficient. Continue reading
Prudential requirements and supervision of investment firms [EU Legislation in Progress]
Investment firms play an important role in capital markets, facilitating savings and investment flows across the EU. However, the current EU rules are seen as fragmented, overly complex, inconsistently applied and often a poor fit for the actual risks taken by the various types of investment firms. Continue reading
Review of the European Market Infrastructure Regulation (EMIR): Updated rules on supervision of central counterparties (CCPs) [EU Legislation in Progress]
The increasing importance of central counterparties (CCPs) and challenges such as the United Kingdom’s withdrawal from the EU call for a more comprehensive supervision of CCPs in EU and non-EU countries to secure financial market infrastructure and build confidence. Continue reading
Plenary round-up – Strasbourg, June 2018
The June plenary session highlights were the continuation of the debate on the future of Europe with the Prime Minister of the Netherlands, Mark Rutte, and the preparation of the European Council meeting of 28 and 29 June 2018. Continue reading
Covered bonds – Issue and supervision, exposures [EU Legislation in Progress]
Covered bonds are debt securities issued by credit institutions and secured by a pool of mortgage loans or credit towards the public sector. They are characterised further by the double protection offered to bondholders, the segregation of assets in their cover pool, over-collateralisation, and their strict supervisory frameworks. Continue reading
Reviving risk capital: The proposal to amend EuVECA and EuSEF [EU Legislation in Progress]
In its 2016 review, the Commission noted that these funds remain small and concentrated in a few Member States and that, while the take-up of EuVECA could be considered successful, the EuSEF results have been disappointing. Continue reading
Regulation of OTC derivatives: Amending the European Market Infrastructure Regulation (EMIR) [EU Legislation in Progress]
The European Market Infrastructure Regulation (EMIR – Regulation (EU) No 648/2012), adopted in 2012, forms part of the European regulatory response to the financial crisis, and specifically addresses the problems observed in the functioning of the ‘over-the-counter’ (OTC) derivatives market during the 2007-2008 financial crisis. Continue reading
Amending the bank resolution framework – BRRD and SRMR [EU Legislation in Progress]
Written by Carla Stamegna (2nd edition, updated on 28.6.2019), In May 2019, the European Parliament and the Council adopted the proposals amending the EU legislative framework on bank resolution, consisting of the Banking Recovery and Resolution Directive, and the Single Resolution Mechanism Regulation. Resolution is the restructuring of a bank which is failing or likely … Continue reading
Amending capital requirements: The ‘CRD-V package’ [EU Legislation in Progress]
Despite significant progress since the financial crisis of 2007-2008, the overhaul of the financial regulatory framework remains a European Commission priority. Continue reading
Financial technology (FinTech): Prospects and challenges for the EU [Policy Podcast]
Written by Cemal Karakas, Carla Stamegna, FinTech, the abbreviation for financial technology, is a broad term. It is mainly used to refer to firms that use technology-based systems either to provide financial services and products directly, or to try to make the financial system more efficient. Examples include robotic trading, cashless payments, crowdfunding platforms, robo-advice, … Continue reading
Recovery and resolution of central counterparties (CCPs) [EU Legislation in Progress]
In recent years, the role and systemic importance of central counterparties (CCPs) has expanded with the gradual implementation of the obligation to centrally clear liquid and standardised over-the-counter (OTC) derivatives. Continue reading
Prospectuses for investors [EU Legislation in Progress]
Written by Angelos Delivorias (2nd edition), On 30 November 2015, the European Commission published a proposal for a regulation on prospectuses (legal documents that provide details about an investment offer in an easily analysable format) to replace Directive 2003/71/EC, as amended by Directives 2008/11/EC, 2010/73/EU and 2010/78/EU. The aims of the regulation are to contribute … Continue reading
Low and negative interest rates: Overview of policy aims and possible effects
Negative rates were introduced by Europe’s central banks for the first time in 2014. Two years later, they still regularly fill newspaper columns and fuel debates. Presented by the central banks as a solution to the current growth problems, they are vilified by the financial sector as being unsustainable and by some Member States as ‘expropriating’ savers and pensioners and stirring social tension. This overview introduces interest rates, discusses the possible causes behind their trends and presents the main arguments in the current debate. Continue reading
Understanding Securitisation: Background − benefits − risks
Written by Angelos Delivorias Securitisation is a financing technique by which homogeneous income-generating assets − which on their own may be difficult to trade − are pooled and sold to a specially created third party, which uses them as collateral to issue securities and sell them in financial markets. This presents advantages to issuers (e.g. … Continue reading
Criminal sanctions for financial market abuse
In order to deter insider dealing and market manipulation, and restore confidence in financial markets, the European Commission has proposed a framework that would require all Member States (MS) to impose criminal sanctions for market abuse. Continue reading
Toughening EU rules on market abuse
Responding to the economic crisis and recent scandals in financial institutions, the European Commission (EC) has proposed to strengthen the financial-market abuse framework. Undermining market integrity Banks have been struggling to recover from the 2008 financial crisis and trying to lose their negative image, but recent market abuse scandals (e.g. Libor manipulation and investment bankers’ … Continue reading
High Frequency Trading (HFT)
The recent financial crisis and fears of further financial destabilisation have animated the debate about the benefits and dangers of High-Frequency Trading (HFT). Supporters of High-Frequency Trading maintain that their activities add liquidity, lower costs for investors and raise volume. On the other hand critics of HFT argue that it holds back traditional traders, makes liquidity … Continue reading
CRD4: proposals for safer financial firms
6 language versions available in PDF formatCRD4: Vorschläge für sicherere Finanzinstitute DRC IV: propuestas para unas empresas financieras más seguras CRD4: propositions pour renforcer la sécurité des établissements financiers CRD4: proposte per imprese finanziarie più sicure Pakiet CRD4: wnioski w sprawie bezpieczniejszych przedsiębiorstw finansowych CRD4: proposals for safer financial firms The CRD4 package (a draft … Continue reading
Tackling financial market abuse in the EU
In response to the economic crisis and recent scandals involving financial institutions, the European Commission has proposed to update and strengthen the EU’s legislative framework against market abuse. The Commission’s proposals include the replacement of the 2003 Market Abuse Directive with a Regulation on Insider Dealing and Market Manipulation. This Regulation would broaden the scope, … Continue reading
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