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Bank exposures to non-bank financial intermediaries

01 December 2022

The NBFI sector continues to gain relevance and increasingly provides credit intermediation and funding services to the real economy. This results in both direct and indirect interconnections between banks and NBFIs through multiple channels. The Committee is concerned about the growth of these exposures, given the often opaque and quickly evolving nature of the attendant risks. Recent episodes of NBFI distress, including the collapse of Archegos Capital Management and events leading to stresses in government bond markets (eg liability-driven investment strategies), have highlighted vulnerabilities and deficiencies in banks’ risk management practices. The Committee recently conducted a risk horizon scanning exercise related to banks’ NBFI activities and discussed supervisory and policy implications resulting from the recent distress of specific NBFIs. Continue reading…

FSB Europe Group discusses financial stability outlook and policies to address risks from crypto-asset activities

29 November 2022

The Financial Stability Board (FSB) Regional Consultative Group for Europe met on 10 November in Lisbon to discuss global and regional economic and financial market developments, including recent work to address vulnerabilities in non-bank financial intermediation and to promote consistent and effective regulation of crypto-assets and markets as well as stablecoin arrangements. Members also received an update on planned FSB work for 2023, including proposed deliverables to the Indian G20 Presidency. Members discussed the increasingly challenging outlook for financial stability globally and in the region arising from volatile commodity prices, high inflationary pressures and vulnerabilities in the non-bank financial system amidst heightened geopolitical tensions and tightening global financial conditions. Members also discussed challenges arising from climate change related financial exposures, cyber threats and structural changes due to digital innovation. Continue reading…

Deaf Ears: UK Whistleblower Reports ‘Disappear into the Bureaucratic System’

17 November 2022
Knowledge Base

by Mark Worth

Revealing the inadequacy of the world’s second-oldest whistleblower system, a new report finds UK officials release “scant or no information at all” about what happens to disclosures after citizens submit them. Many UK public agencies that are legally required to investigate whistleblower reports provide “generic or vague” information about their responses to the disclosures, according to the London-based NGO Protect. In a “significant” number of cases, the agencies took “limited or no action” or did not provide enough information about what – if any – action they took when a citizen reported crime or corruption. Continue reading…

What types of whistleblower systems are there and how can they benefit your organisation?

14 November 2022
Knowledge Base

by Daniel Vaknine

When it comes to whistleblowing within an organisation, it is a good idea to use a whistleblower system. In short, this is a system that allows employees to report wrongdoings internally. In this article, I’ll go through the different types of whistleblower systems that are available so that you can gain an increased awareness of what methods are available. This in turn makes it easier to decide which methods your organisation can or should offer.

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FCA publishes Decision Notices for Barclays plc and Barclays Bank plc

03 November 2022
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Barclays have referred their Decision Notices to the Upper Tribunal. Any findings in the Notices are therefore provisional and reflect the FCA’s belief as to what occurred and how it considers the firms’ behaviour should be characterised. The Financial Conduct Authority (FCA) has decided to fine Barclays a total of £50 million in relation to its failure to disclose certain arrangements agreed with Qatari entities as part of its capital raisings announced on 25 June 2008 and 31 October 2008. Barclays’ conduct in the October capital raising was reckless and lacked integrity. Continue reading…

European Commission Slaps EU Countries for Delaying Whistleblower Rights

02 November 2022
Knowledge Base

by Mark Worth

Ten years ago the European Commission tersely said the idea of EU-wide whistleblower rules was out of the question. Today, the Commission is helping to lead the charge for stronger rights for people who report corruption. For evidence of this sharp turnaround, one need look no further than the Commission’s decision to escalate its infringement action against four EU countries that are tardy in passing whistleblower protection laws. On 29 September the Commission warned Austria, Belgium, Romania and Slovenia that they are “failing to fulfil their obligations” to comply with new rules. Continue reading…

SIBOS 2022: What is the comparison with 2008?

19 October 2022
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by Michel Klompmaker

Last week from October 10 to October 13, the RAI Congress Center was all about SIBOS. It started with the official opening by Queen Maxima, who appeared on stage just in time to dutifully read her story from the paper. She spoke in her capacity as “United Nations Secretary-General’s Advocate for Inclusive Finance for Development (UNSGSA)”. Her presentation was preceded by that of Swift chairman Yawar Shah, who was of course very content with the fact that SIBOS was able to be held live again after three years. During the plenary opening, CEO Javier Pérez-Tasso also spoke about the challenges of the sector. Mairead McGuiness, EU Commissioner for Financial Services, Financial Stability and Capital Markets spoke to us via video link. Those were strange days because somehow there was a kind of weird atmosphere and menace over the market. Not in the sense of a sudden fall in the stock markets, but rather the threat of a nuclear conflict on European soil after the attack on the Russian bridge towards Crimea. The same thoughts came back to me from September 2008, during SIBOS in Vienna, when it was announced that Lehman Brothers had fallen over…

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Klaas Knot: Policy Responses in a Pandemic- and Conflict-Impacted World

18 October 2022
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On 15 October, Klaas Knot delivered a speech at the 37th Annual G30 International Banking Seminar. Shocks are hitting the euro area economy. A mixture of global shocks has set-off high inflation. The pandemic first caused supply chain restrictions, pushing up inflation, which was subsequently reinforced by pent-up demand. This strong demand shock effect in the first half of this year has been an upside surprise for central banks. A similar pattern can be observed in the energy crisis as a result of the war in Ukraine. The disrupted energy supply is a classic negative supply shock leading to elevated energy prices. Governments have responded with extensive fiscal measures, which support demand. If the scope of the support measures is too broad, they will fuel inflation. Continue reading…

Shopify commits to new practices to make it safer for consumers buying from web stores on the platform

13 October 2022
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Following dialogues with the Commission and the network of national consumer protection (CPC) authorities, multinational e-commerce business Shopify has committed to making several improvements to make shopping safer for customers, bringing it in line with EU rules. The dialogue first originated following the receipt of numerous complaints, which peaked during the COVID-19 pandemic, through the European Consumer Centres. The complaints mainly related to web stores hosted by the platform, found to have engaged in illegal practices, such as making fake offers and fake scarcity claims, supplying counterfeit goods or not providing their contact details. The Commission, together with the CPC, and led by Belgium’s Directorate General for Economic Inspection, launched a dialogue with Shopify in July 2021, aimed at introducing changes to address the illegal practices of traders in its platform. Continue reading…

EU and US prosecutors stepping up cooperation in fight against environmental crime

11 October 2022

Specialised public prosecutors from the United States and EU Member States will step up their cooperation to tackle major cross-border and intercontinental environmental crime. During a dedicated liaison meeting, hosted by Eurojust, officials devised a process to set environmental crime priorities for operational action, criminal intelligence sharing, and developing cooperation tools and mechanisms to exchange information and best practices. Continue reading…