Featured Product

    ESMA Publishes Report on Trends, Risks, and Vulnerabilities in EU

    September 06, 2018

    ESMA published its second report of the year on the trends, risks, and vulnerabilities in EU. This issue of the biannual report covers the period from January 01, 2018 to June 30, 2018. The report reveals that the securities markets, infrastructures, and investors in EU face new risks in the form of high volatility. In the report, ESMA also reiterated its concerns about cyber risk and Brexit risks for business operations.

    The report examines the performance of securities markets, assessing both trends and risks to develop a comprehensive picture of systemic and macro-prudential risks in EU, to assist both national and EU bodies in their risk assessments. It finds that the overall risk levels for the securities markets in EU remained stable but at high levels for most risk categories. Moreover, investor risks persist across a range of products. Under the Markets in Financial Instruments Regulation, or MiFIR, product intervention powers, ESMA restricted the provision of contracts for differences and prohibited the provision of binary options to retail investors. The new measures started to apply from August 01, 2018 and July 02, 2018, respectively.

    The report reveals that the financial markets in EU can be expected to become increasingly sensitive to mounting economic and political uncertainty from diverse sources, such as weakening economic fundamentals, transatlantic trade relations, emerging market capital flows, and Brexit negotiations. Assessing business exposures and ensuring adequate hedging against these risks will be a key concern for market participants in the coming months. The report identifies the following key risks in EU securities markets:

    • Market risk remains at a very high level accompanied by very high risk in securities markets and elevated risk for investors, infrastructures, and services. The outcome of the Brexit negotiations remains the most important political risk for the EU, at this stage.
    • Credit and liquidity risks remain high, with a deterioration in outstanding corporate debt ratings and deterioration in measures of corporate and sovereign bond liquidity
    • Operational risk continues to be elevated with negative outlook, as cyber threats and Brexit-related risks to business operations remain major concerns.  

     

    Related Links

    Keywords: Europe, EU, Securities, TRV Report, Cyber Risk, Brexit, Market Risk, ESMA

    Related Articles
    News

    APRA Revises Related Entities Standard for Banks

    APRA published a strengthened prudential standard APS 222 on associations with related entities, with the aim to mitigate contagion risk within banking groups.

    August 20, 2019 WebPage Regulatory News
    News

    FSB on Responses to Consultation on Wind-Down of Trading Portfolios

    FSB published responses received to the consultation on the solvent wind-down of the derivatives and trading book portfolio of a global systemically important bank (G-SIB).

    August 19, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Consultation on Resolvability Disclosures

    FSB published responses received to the consultation on disclosures for resolution planning and resolvability of banks.

    August 19, 2019 WebPage Regulatory News
    News

    HKMA Revises Implementation Schedule for Initial Margin Rules

    HKMA intends to adopt a revised implementation schedule for the margin requirements for non-centrally cleared derivatives.

    August 16, 2019 WebPage Regulatory News
    News

    HKMA Revises Guideline on Application of Banking Disclosure Rules

    HKMA issued a revised version of the Supervisory Policy Manual module CA-D-1 on guideline on the application of the Banking (Disclosure) Rules (BDR).

    August 16, 2019 WebPage Regulatory News
    News

    ECB Decision on Recognizing Reporting Member States Under AnaCredit

    ECB has finalized the Decision 2019/1348 (ECB/2019/20) that establishes procedure for recognizing non-euro area member states as reporting member states under the AnaCredit Regulation (EU 2016/867).

    August 16, 2019 WebPage Regulatory News
    News

    FASB Proposes to Extend CECL Standard Deadline for Certain Entities

    FASB proposed an Accounting Standards Update that would grant private companies, not-for-profit organizations, and certain small public companies additional time to implement FASB standards on current expected credit losses (CECL), leases, and hedging.

    August 15, 2019 WebPage Regulatory News
    News

    IASB Adds Phase Two of IBOR Reform to Its Work Plan

    IASB (or the Board) has added the second phase of its project focused on potential financial reporting implications linked to the interest rate benchmark reform—interbank offer rate (IBOR) reform—to its work plan.

    August 15, 2019 WebPage Regulatory News
    News

    FED Updates Draft Instructions for Proposed FR Y-14 Reporting Forms

    FED updated draft instructions for the monthly, quarterly, and annual capital assessments and stress testing reports, also known as forms FR Y-14M, FR Y-14Q, FR Y-14A, respectively.

    August 15, 2019 WebPage Regulatory News
    News

    FASB Proposes Taxonomy Changes Related to Topics 326, 815, and 842

    FASB is proposing taxonomy improvements for the proposed Accounting Standards Update on clarifying the interactions among topic 321 on investments in equity securities), topic 323 on investments under equity method and joint ventures), and topic 815 on derivatives and hedging.

    August 15, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3665