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Tighter coordination and planning to avoid future banking crises
July 7, 2010--A special system should be set up to ensure that crises are resolved earlier and to avoid rushed, weekend bank bailouts costing the taxpayer hundreds of billions of euros, says the European Parliament in a resolution passed on Wednesday. The growing size, complexity and interconnectedness of banks means that such a system must be established at European level.
In the resolution, drafted by Elisa Ferreira (EPP, PT) and adopted by a show of hands, MEPs urge the European Commission to submit by the end of the year one or more draft laws relating to the management of cross-border crises in the banking sector. In particular they call for an EU crisis-management framework, an EU financial stability fund and a resolution unit within the European Banking Authority to deal with insolvencies of cross-border systemic banks.
"Risks cannot and should not be eliminated from the market but we do require regulation which will make risks more transparent and prevent the emergence of bubbles," said Ms Ferreira in a debate on Tuesday. "It is not our job to prevent banks going bankrupt but it is our job to ensure that the way in which they are liquidated or reorganised is done in an orderly fashion, and also to limit collateral effects elsewhere in the system to ensure that it is not the taxpayer who picks up the tab".
EU crisis management framework
The crisis management framework proposed in the resolution would, in the event of a crisis, preserve financial stability, minimise the cost to taxpayers, preserve basic banking services and protect depositors. It would also encourage banking sector players to act more responsibly.
The proposed framework would provide a common minimum set of rules, foster the convergence of national resolution and insolvency laws, and ultimately establish an EU resolution and insolvency regime. It would grant more crisis management powers to supervisory authorities, including the powers to wind up a bank or impose a total or partial sale. Considerable coordination powers would be vested in the nascent European Banking Authority (EBA).
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Source: European Parliment
CESR publishes EFRAG’s draft response on the IASB’s Exposure Draft Conceptual Framework for Financial Reporting: The Reporting Entity
July 7, 2010--The Committee of European Securities Regulators (CESR), through its standing committee on corporate reporting (CESR-Fin), has considered EFRAG’s draft comment letter on the IASB’s Exposure Draft (ED) Conceptual Framework for Financial Reporting: The Reporting Entity.
We thank you for this opportunity to comment on your draft letter and we are pleased to provide you with the following comments.
CESR is supportive of the IASB’s and FASB’s joint initiative to define in the Framework what constitutes a reporting entity as there is no further guidance in current accounting literature.
We particularly welcome the fact that the ED observes that combined financial statements might provide useful information about commonly controlled entities as a group. Current IFRSs do not provide an adequate solution for the practice in several European countries of having entities that are commonly controlled by two different listed entities. We believe that further guidance should be developed at standards level.
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Source: CESR
London Stock Exchange Group: 19.8 Million Electronic Equity Trades In June
July 7, 2010--London Stock Exchange Group PLC (LSE.LN), said Wednesday that in June, 19.8 million equity trades were carried out across the Group's electronic order books, with a combined value of GBP172.1 billion.
MAIN FACTS:
-On the Italian equity order book, increased trading activity led to 9% year on year growth in the average daily number of trades, while the average daily value traded was up 42%.
-In London, the total value traded on SETS - covering all equity based order book trading on the Exchange - increased 3% year on year, reaching GBP110.0 billion.
-A number of the Group's other markets recorded good performances in June. On the MTS cash market the total value traded reached GBP175.2 billion, a 23% increase on June 2009.
The average daily value traded on the U.K. equity order book was GBP4.3 billion, a decrease of 1% year on year, while the average daily number of trades was down 3% at 593,569.
The average daily number of trades in Italian equities was 246,665 in June, a 9% increase on the same month last year. The average daily value traded during the month was up 42% at EUR3.4 billion.
The total value traded in international equities increased 32% on June 2009 to GBP15.5 billion, while the total number of trades was 1,274,363, an 11% year on year increase.
Trading in ETFs and ETCs continued to grow, with the average daily number of trades up 45% year on year, reaching 16,420, while the average daily value traded was up 35% to GBP436 million.
A total of 9,588,491 contracts were traded across the Group's derivatives platforms in June 2010, up 24% on last year.
The average daily notional value traded was up 2% at GBP3.8 billion, while the average daily number of contracts traded rose by 16% to 444,031
The average daily value traded on the MTS Cash markets during the month was up 23% year on year at EUR9.6 billion (GBP8.0 billion).
Source: Online News
CEBS’S STATEMENT ON KEY FEATURES OF THE EXTENDED EU-WIDE STRESS TEST
July 7, 2010--Following its statement issued on 18 June 2010, CEBS provides further information on the EU-wide stress test exercise which is now being finalised by CEBS and the national supervisory authorities, in close cooperation with the ECB.
The objective of the extended stress test exercise is to assess the overall resilience of the EU banking sector and the banks’ ability to absorb further possible shocks on credit and market risks, including sovereign risks, and to assess the current dependence on public support measures.
The exercise is being conducted on a bank-by-bank basis using commonly agreed macro-economic scenarios (baseline and adverse) for 2010 and 2011, developed in close cooperation with the ECB and the European Commission.
The macro-economic scenarios include a set of key macro-economic variables (e.g. the evolution of GDP, of unemployment and of the consumer price index), differentiated for EU Member States, the rest of the EEA countries and the US. The exercise also envisages adverse conditions in financial markets and a shock on interest rates to capture an increase in risk premia linked to a deterioration in the EU government bond markets.
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Source: Committee of European Banking Supervisors (CEBS)
FESE Statement On Equity Market Data
July 7, 2010--Introductory Remarks:
FESE members operate Regulated Markets (RMs) that offer a transparent and neutral trading infrastructure to trade equities, bonds and derivatives. Exchanges fulfil a valuable function with significant positive externalities. The whole market benefits from the price discovery function offered by
exchanges, including the competitors of exchanges and a full spectrum of users and investors investing
in the EU Market.
The Markets in Financial Instruments Directive (MiFID) has enabled inter?market competition which has
yielded significant benefits for European markets but also resulted in fragmentation of liquidity, making
it difficult to source liquidity and assess execution quality. These challenges can be seen as a natural byproduct of competition, but more attention is needed to resolve the challenges created in the area of
data. High?quality data is provided by RMs, which is made available through many channels and is being
consolidated along with other available data by commercial providers. The underlying problem with
data in Europe is the lack of availability of pre?trade OTC data, and the lack of consistency, granularity
and poor quality of post?trade OTC data. These gaps can be addressed with a combination of MiFID
amendments (to require data reporting where it is not currently required, and to require more granular
and more timely data in other cases) and better mechanisms for monitoring the data reporting. Some of
these improvements are already being considered by European policymakers.
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Source: FESE
Results of European bank 'stress tests' July 23: Merkel
July 7, 2010-- The results of "stress tests" to determine the financial health of the European banking sector will be published on July 23, German Chancellor Angela Merkel said Wednesday.
Speaking on rolling news channel N24, Merkel said the tests were "an important signal so that we can have more transparency in the system.
"The results will be published on July 23," she added.
French Finance Minister Christine Lagarde had previously spoken of publication "around July 23."
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Source: EUbusiness
AMUNDI IS has listed 2 new ETF on NYSE Euronext’s Paris market today
July 6, 2010--NYSE Euronext is pleased to announce that AMUNDI IS has listed 2 new ETF on NYSE Euronext’s Paris market today:
Listing date:06/07/2010
ETF name:AMUNDI ETF EURO STOXX SMALL CAP
ETF ISIN:FR0010900076
ETF Symbol:ESM
Listing date:06/07/2010
ETF name:AMUNDI ETF DOW JONES EURO STOXX 50 (D)
ETF ISIN:FR0010908251
ETF Symbol:CD5
NYSE Euronext now has 542 listings of 494 ETFs based on more than 300 indices. So far this year, 46 ETFs have been listed on NYSE Euronext’s European markets.
Source: NYSE Euronext
European ETF activity highlights for June 2010: NYSE Euronext
July 6, 2010--At the end of June, NYSE Euronext had 541 listings of 493 ETFs from 17 issuers. These ETFs cover more than 300 indices exposed to an extended range of assets and strategies (Equity, Fixed Income, Commodities, Short, Leverage, etc…).
In June 2010, the number of ETFs increased by 18.5% compared to end of June 2009. So far this year, 46 new ETFs have been listed.
Both the daily average number of trades and daily average turnover figures again showed solid YOY growth in June 2010. On average, there were 9 208 trades on a daily basis, representing an increase of more than 36.7% versus June 2009. Daily average turnover increased from €294 million in June 2009 to €399.7 million in June 2010, or 35.9%
At the end of June, the combined Assets Under Management of all ETFs listed on the NYSE Euronext European markets totaled €116.7 billion, an increase of 39.3% from the €83.7 billion at the end of June 2009.
The combination of the flow of 19 first-class Liquidity Providers, competitive market makers, client orders and our high capacity, low latency technology contributed to a median spread of 30.94 bps of all listed ETFs, down from 45.51 bps in June 2009.
At the end of May 2010, NYSE Euronext’s Liquidity Providers program featured 19 Liquidity Providers that have a total of 1 005 liquidity provision agreements, providing firm bid/ask quotes with minimum size and maximum spread requirements for the entire trading session on all ETFs.
On Monday June 7, NYSE LIFFE launched five new options on ETFs based on 4 European sectors and China. Since then, liquidity has been provided on a regular basis on all strikes and maturities.
Visit www.euronext.com/etf for more info.
Source: NYSE Euronext
22nd meeting of the Market Participants Consultative Panel
July 6, 2010--Summary
a risk of a double-dip, the return of sovereign risk, possibly serious refinancing problems in the
commercial real estate sector, the amount of outstanding corporate debt and possibly rising
default rates, the need for analyzing the corporate bonds market structure and the need for more
investor education in light of vanishing boundaries between wholesale and retail markets.
Some financial disintermediation was seen as a positive development – though possible risks in terms
of financing in Central and Eastern European States and of SMEs were stressed. CESR’s report
on trends, risks and vulnerabilities in financial markets was received in a positive way and
suggestions were made on how to develop it further. Its publication was encouraged.
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Source: CESR
EPEX Spot / EEX Power Derivatives: Power Trading Results in June
July 6, 2010--In the framework of their cooperation, the European Energy Exchange AG (EEX) and the French Powernext SA integrated their Power Spot
and Derivatives Markets in 2009.
In June 2010, a total volume of 136.4 TWh was traded on the joint subsidiaries EPEX Spot SE and EEX Power Derivatives.
Power trading on the day-ahead auctions on EPEX Spot accounted for a total of
21,355,184 MWh and can be broken down as follows:
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Source: European Energy Exchange AG (EEX)
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