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EU recession over, but sharp contrasts in east
November 23, 2009--The European Union may have inched out of its sharpest recession since the global slump of the 1930s, but green shoots are not emerging uniformly across the 27-nation bloc's eastern member states.
Contrasts are sharp among the 10 ex-communist countries that have joined the EU since 2004.
The situation in Poland, the only EU nation to have enjoyed sustained growth this year, compares with the stark lot of countries such as Latvia or Hungary, where the economies have been in freefall. "In terms of growth, eastern Europe will trail behind the rest of the world," said Erik Bergloef, chief economist at the European Bank for Reconstruction and Development, which focuses on the ex-communist bloc.
Poland to sell Ireland EUR 15 million carbon credits
November 23, 2009--Poland is to sell 15 million euros' (22 million dollars) worth of carbon credits to Ireland, the Polish environment minister said Saturday.
Maciej Nowicki said he expected an agreement for selling unused carbon dioxide emission rights to Ireland to be signed in the next week or two.
On November 9 Poland signed a deal to sell carbon credits worth 25 million euros to Spain.
Polish Prime Minister Donald Tusk said the Spanish deal would help fund his country's drive to reduce greenhouse gas emissions and improve environmental protection.
The coal-rich east European country currently depends on fossil fuels for 94 percent of its electricity, based on infrastructure dating largely from the communist era.
ETF Securities platinum, palladium ETCs hit record
November 22, 2009--ETF Securities said on Monday the amount of metal it holds to back its platinum and palladium exchange-traded commodities rose to record highs in the week to November 20, though its gold holdings declined.
ETFS Physical Palladium (PHPD.L) held 598,293 ounces of bullion on Friday, against 590,759 ounces on the day before, while ETFS Physical Platinum (PHPT.L) held 422,762 ounces of metal on the same day against 421,949 ounces.
Government introduces Financial Services Bill
November 20, 2009--The Government has today introduced the Financial Services Bill to Parliament. The Bill delivers significant reforms that will provide greater rights and information for consumers, in addition to stronger financial regulation to make banks safer and more robust in the future.
Chancellor of the Exchequer Alistair Darling said:
“From the outset of the global financial crisis two years ago, the Government has taken decisive, innovative steps to protect the savings of British families and stabilise the economy.
“Along with governments around the world, we have learned important lessons about the weaknesses of global banking. In the past too many banks failed to fully understand the risks they took. When the crisis hit, far too many firms found themselves short of capital and without any plan for managing through turbulent times.
“The Bill we are introducing today is central to the Government’s reform agenda that seeks to empower consumers and make sure that, in the future, taxpayers will not be called on to protect banks from the consequences of their actions.”
The Bill includes:
New powers for consumers to collectively challenge banks in court in addition to a new consumer financial education body and a free nationwide money guidance service
A requirement for firms to develop ‘living wills’ to help them better understand the risks involved in their businesses and deal with periods of stress, and to ensure they can be wound down in future crises without excessive taxpayer support
Tougher rules on pay and bonuses that will ensure remuneration policies do not contribute to excessive risk taking
Strengthening of the regulatory framework, including the creation of the Council for Financial Stability and enhanced powers for the Financial Services Authority
EU businesses investing in R&D despite economic crisis
November 19. 2009--Corporate investment in research and development (R&D) increased by 8.1% in the EU in 2008 in spite of the economic crisis, according to new figures published this week in the 2009 EU Industrial R&D Investment Scoreboard. The figures reveal that European companies outperformed their counterparts in the US and Japan, who increased their R&D spending by 5.7% and 4.4% respectively. Corporate R&D investment worldwide increased by 6.9%.
Two EU companies feature in the top 10 in the Investment Scoreboard figures. German car manufacturer Volkswagen took third place with an R&D investment of EUR 5.93 billion, and Finnish communications company Nokia took eighth place. Overall top world performer was the Japanese company Toyota Motor with EUR 7.61 billion invested in R&D. Among the other top 10 investors worldwide are US companies Microsoft, General Motors, Pfizer, Ford and Johnson & Johnson.
The Investment Scoreboard figures also show promisingly strong R&D investments by companies in the renewable energy technology sector.
Antitrust: Commission confirms sending of Statement of Objections to Standard & Poor's
November 19, 2009--The European Commission can confirm that on 16 November 2009 it sent a Statement of Objections (SO) to Standard & Poor's (S&P), a division of McGraw-Hill Companies, Inc. of the United States. The SO outlines the Commission’s preliminary view that S&P is abusing its dominant position by requiring, as the sole-appointed National Numbering Agency (NNA) for US securities, financial institutions and information service providers (ISPs) to pay licensing fees for the use of International Securities Identification Numbers (ISINs) in their own databases.
The Commission takes the preliminary view that this behaviour amounts to unfair pricing and constitutes an infringement of Article 82 EC Treaty.
ISINs are the global identifiers for securities and are governed by International Standardisation Organisation (ISO) standard 6166. They are indispensable for a number of operations that financial institutions carry out (for instance, reporting to authorities or clearing and settlement) and cannot be substituted by other identifiers for securities.
S&P is the sole-appointed NNA for US securities and therefore the only issuer and first-hand disseminator of US ISIN numbers. The Commission’s preliminary conclusion is that S&P is abusing this monopoly position by enforcing the payment of licence fees for the use of US ISINs by (a) banks and other financial services providers in the EEA and (b) information service providers in the EEA.
This preliminary finding is based on, inter alia, a comparison with the charging policy of other NNAs that either do not charge any fees at all or, if they do, do so only on the basis of the distribution cost as opposed to usage, according to ISO principles. According to the Commission's preliminary findings, S&P does not incur any costs for the distribution of US ISINs to financial service providers because the latter do not receive the ISINs from S&P but from information service providers such as Thomson Reuters or Bloomberg.
S&P has 8 weeks to reply to the SO, and will then have the right to be heard in an Oral Hearing. If the preliminary views expressed in the SO are confirmed, the Commission may require S&P to cease the abuse and may impose a fine.
Background
The Commission opened a formal investigation into S&P in January 2009 (see MEMO/09/6 ).
A Statement of Objections is a formal step in EC antitrust investigations in which the Commission informs the parties concerned of the objections raised against them. The parties can reply to the Statement of Objections, setting out all facts relevant to their defence against the objections raised by the Commission. They may also request an oral hearing to present its comments on the case.
The Commission may then take a decision on whether the conduct addressed in the Statement of Objections is compatible or not with the EC Treaty’s antitrust rules. Sending a Statement of Objections does not prejudge the final outcome of the procedure.
ECB amends rating requirements for asset-backed securities in Eurosystem credit operations
November 20, 2009--The Governing Council of the European Central Bank (ECB) has decided to amend the rating requirements for asset-backed securities (ABSs) to be eligible for use in Eurosystem credit operations.
The Eurosystem will require at least two ratings from an accepted external credit assessment institution for all ABSs issued as of 1 March 2010. In determining the eligibility of these ABSs, the Eurosystem will apply the “second-best” rule, meaning that not only the best, but also the second-best available rating must comply with the minimum threshold applicable to ABSs (see the press release of 20 January 2009).
As of 1 March 2011, the second-best rule and the requirement to have at least two ratings will be applied to all ABSs, regardless of their date of issue.
The Governing Council has deemed it necessary to introduce the above amendments to ensure that the Eurosystem’s requirement of high credit standards for all eligible collateral is met. In addition, the changes, which reflect recent market developments, aim to make a further contribution to restoring the proper functioning of the ABS market.
The list of external credit assessment institutions accepted by the Eurosystem is available on the ECB’s website.
CESR publishes responses to consultation on trade repositories
November 20, 2009--CESR today published the responses received to its consultation on trade repositories in the European Union.
Consultation on Trade Repositories in the European Union
Closing date : 06 Nov. 2009 Consultation on Trade Repositories in the European Union
29 Sep. 2009 - The financial crisis, especially the default of Lehman Brothers, underlined the importance of a robust and adequately functioning post-trading infrastructure, highlighted the need for more transparency on exposures generated by the over-the counter (OTC) market, in particular for derivatives, notably credit default swaps (CDS), and demonstrated the need to safeguard the OTC market from abusive behavior. The CESR/ESCB Recommendations for Securities Settlement Systems and Central Counterparties in the European Union, upon request of the ECOFIN, have been reviewed in order to encompass the OTC derivatives dimension. On 31 July 2009 the European Commission announced a major step towards financial stability for the European CDS market in (defined as the market in CDS that reference European entities and indices), related to European entities and indices will be cleared through central counterparties as of that date. The fact that various providers of clearing services have now expanded (or are in the process of doing so) their scope of services to central clearing of CDS is an important reason to consider what further improvements can be made in order to enhance risk mitigation and to improve the transparency and efficiency of the post-trading process as a whole. On 3 July 2009 the European Commission published a Communication on ensuring efficient, safe and sound derivatives markets. In the Communication the Commission referred to the forthcoming report of CESR on trade repositories, on the basis of which the Commission will take appropriate actions. It also raised several other issues that it considers to be important in the context of derivatives markets.
NASDAQ OMX Launches New Fixed Income Index - OMRX All Index Added To Expanded OMRX Index Family
November 20, 2009--NASDAQ OMX Stockholm announces that it has launched a new fixed income index named OMRX All Index, which will act as a benchmark for the Swedish bond and money markets. The index includes treasury bills, nominal treasury bonds as well as nominal bonds from major mortgage institutions. The OMRX All Index will be added to NASDAQ OMX' new expanded OMRX fixed income index family.
Effective November 19, NASDAQ OMX existing index series (ALLA, OTHER, STAT and SSV) will be incorporated into the OMRX index family and rulebook. The new name standard is introduced to simplify and facilitate the comparability of NASDAQ OMX fixed income indexes. Significant indexes included in the OMRX series are OMRX Bond All Index and OMRX Mortgage Bond All, which together with the new OMRX All Index will form a sub-index family suitable for investors looking to utilize broad mortgage issuer diversification.
Magdalena Hartman, Vice President NASDAQ OMX Global Index Group said, “The launch of OMRX All Index together with the new OMRX Bond All Index and OMRX Mortgage Bond All Index is a direct response to customer demand for broader benchmark indexes that covers multiple mortgage issuers. Moreover, by harmonizing the name standard and rulebook for our fixed income index family we make them more accessible and visible to our customers.”
Jonas Pripp, Head of fixed income at Swedbank Robur commented, “It is very positive that NASDAQ OMX now takes the step to expand its OMRX index family. These types of indexes are in demand among our large institutional clients and we also intend to change benchmark to the new indexes for our fixed income funds. The new indexes reflect actual market conditions for Swedish covered mortgage bonds, which implies an increased diversification, leading to better products for our customers. For us, a reliable and dynamic supplier is just as important as transparency, diversification and index replicability.”
WSE Introduces the RESPECT Index
November 20, 2009--On 19 November 2009, the Warsaw Stock Exchange announced the Respect Rating – a ranking of socially responsible WSE-listed companies – and started publishing the Respect Index.
“It is an important day from the perspective of the development of the Warsaw Stock Exchange during the past couple of years. Today, we initiate the project of promoting responsible management in WSE-listed companies and measuring it through a special-purpose index. The activities of a modern enterprise take into account relations with shareholders, business partners, stake holders as well as the community.” – said Mr Ludwik Sobolewski, WSE President & CEO, during a seminar that inaugurated the Respect Rating and Index.
“Securities exchanges have a very important role to play – that of leaders in establishing responsible business standards. Today’s launch of the Respect Index marks the beginning of a great adventure and a great challenge for us.” – Ms Eliza Durka, WSE Marketing Communications Office Director, said.
The Respect Index measures the performance of companies that were classified as socially responsible in the survey. It is an income index, taking into account corporate actions such as dividends and rights issues. Sixteen companies that received the highest rating in the survey were included in the composition of the Index:
APATOR SA
BANK PBH
Barlinek SA
Ciech SA
Citi Handlowy
ELEKTROBUDOWA SA
Grupa LOTOS SA
GRUPA ZYWIEC SA
ING Bank Slaski SA
KGHM Polska Miedz
Mondi Swiecie SA
PGNiG SA
PKN ORLEN SA
Telekomunikacja Polska SA
Zaklady Azotowe w Tarnowie – Moscicach SA
Zaklady Magnezytowe „ROPCZYCE” SA
For more information, please visit www.wse.com.pl
