Regulatory radar - issue 38 (September 2011)
In September, the ESRB provided an overview of current activities and priorities. With respect to the sovereign debt crisis, the ESRB indicated that over the last months, sovereign stress has moved from smaller economies to some of the larger EU countries. Signs of stress are evident in many European government bond markets, while the high volatility in equity markets indicates that tensions have spread across capital markets around the world. The situation has been aggravated by the progressive drying-up of bank term funding markets, and availability of US dollar funding to EU banks had also decreased significantly. In this respect, the Board stressed that decisive and swift action is required from all authorities.
In addition, the ESRB indicated that work is continuing on other risks which may either individually or collectively threaten the resilience of the financial system, in particular on FX lending and “Retailisation” (i.e. the marketing of complex products to retail investors by financial institutions as a potential source of macro-prudential concern).
With regard to governance, the EBA published new Guidelines on Internal Governance. These guidelines are the result of a review of the former CEBS guidelines and include new chapters on transparency of the corporate structure, the role task and responsibilities of the supervisory structure and on IT-systems and business continuity management.
For this month's important FSI tax news, we refer to our Regulatory Radar Newsflash of 30 September 2011 on the Financial Transaction Tax (FTT) legislative proposal.
We hope you enjoy the reading.