The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have on 12 September issued their Autumn 2022 joint risk report. The report highlights that the deteriorating economic outlook, high inflation and rising energy prices have increased vulnerabilities across the financial sectors. The ESAs advise national supervisors, financial institutions and market participants to prepare for challenges ahead. Continue reading…

by Michal Pleticha

The Czech Republic is at a crossroad in deciding how to regulate disinformation. In order to adopt the Strategy to Combat Disinformation (see Part I.), it’s necessary for the Government to draft and push a large number of amendments through both chambers of the Czech Parliament and the Presidential Office. Since disinformation is a sensitive political subject, capable of deepening the current split in politics and society, it could be the beginning of fierce political battle. Continue reading…

by Daniel Vaknine

Although whistleblowing is often represented as huge scandals in the media or on TV, it is often not quite as dramatic in reality. The majority of whistleblower cases are handled internally and concern the incorrect treatment of employees or negative working conditions. However, there have been huge scandals that have occurred at very large corporate companies. Scandals that could have been prevented with the help of whistleblowing. In this post, we therefore take a closer look at 3 occasions that whistleblowing could have made a difference. Continue reading…

by Michal Pleticha

A threatening phenomenon appeared in Czech society: another desperate family discovers that one of its members became a different person. Someone who literally detached himself from reality and became an angry and hostile person with an aggressive attitude to common topics of conversation. It is likely that such a person succumbed to the phenomenon of “disinformation”, which changed his perception of reality and his personality. He is obsessed with the delusion of the “hidden truth” which comes up on the surface only thanks to the uncensored free media (meaning specialised websites, social media groups and citizen journalists. Well-established and quality public media are allegedly censored and spread only lies and manipulation. Continue reading…

The Financial Conduct Authority (FCA) has fined Citigroup Global Markets Limited (Citigroup Global Markets) £12,553,800 for failing to properly implement the Market Abuse Regulation (MAR) trade surveillance requirements relating to the detection of market abuse. By failing to properly implement the MAR trade surveillance requirements, Citigroup Global Markets could not effectively monitor its trading activities for certain types of insider dealing and market manipulation. 

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On August 24, the Commission decided to register a European Citizens’ Initiative (ECI) entitled ‘Call to achieve a tobacco-free environment and the first European tobacco-free generation by 2030′. The organisers of the initiative call on the Commission to propose legislation to save new generations from falling into tobacco addiction, to act against related environmental dangers and against smoking. More specifically, they ask the Commission to propose legal acts to end the sale of tobacco and nicotine products to citizens born in 2010 onwards. The initiative also calls on specific measures to achieve tobacco-free and cigarette butt-free beaches and riverbanks, create a European network of tobacco and cigarette butt-free national parks, to extend outdoor vapour-free spaces, and to eliminate tobacco advertising and its presence in audiovisual productions and social media. Continue reading…

On 17 July 2022, Hyun Song Shin, Economic Adviser and Head of Research of the BIS, gave a speech at the G20 High-level Seminar “Monetary and financial sector policy to support stability and recovery”. For near-term macroeconomic stabilisation of the economy, we are accustomed to viewing the economy mainly through the demand side, with supply adjusting smoothly in the background. However, a more balanced approach between demand and supply is essential in addressing the current inflation challenge. Today, I use this perspective to assess the odds of a soft landing for the global economy by drawing on a BIS Bulletin released this week. Continue reading…

Financial firms are prioritising communications surveillance, but most are still failing to monitor Social Messaging i.e., text and WhatsApp communications, putting themselves at risk of regulatory scrutiny and fines like those levied against Bank of America this week, according to the latest data from RegTech leader SteelEye. SteelEye’s Compliance Health Check report surveyed 170 senior compliance professionals in financial services and found that just 15% of firms are monitoring WhatsApp at all, despite the continued levying of huge fines against those found to be failing to monitor the communications of regulated employees effectively. Even fewer are monitoring Slack (9%) and Signal (3%) – and even considering the more expected channels there remains significant work to be done, with just 40% capturing Microsoft Teams, 40% Bloomberg Chat and 25% Zoom. Continue reading…

by Michel Klompmaker

According to the chairman of the SOBI Foundation, Pieter Lakeman, De Nederlandsche Bank (DNB) is forcing pension funds to use incorrect actuarial interest rates. For their annual reports for 2021, the pension funds were obliged to use an actuarial interest rate of approximately 0.57%. If 4% had been used as the actuarial interest rate, which was done until 2007, the pension provisions would have been approximately 60% smaller at the end of 2021. It is clear that this is not a matter of several thousand euros. For example, the pension provision of PMT, the third largest pension fund, was over 95 billion euros on 31 December 2021. At an actuarial interest rate of 4%, this would be more than 55 billion euros less. In fact, this means that the equity capital is then understated by more than EUR 55 billion in the balance sheet. At an actuarial interest rate of 5%, the provision would even be approximately 70% smaller and PMT’s equity would amount to 65 billion euros. For the largest pension fund, the ABP, the equity is shown in the balance sheet as 54 billion euros via the actuarial interest rate prescribed by DNB, while in reality, with a somewhat more normal actuarial interest rate of 4%, it amounts to more than 370 billion.  Continue reading…

The European Central Bank (ECB) and the European Systemic Risk Board (ESRB) has on 26 July published a joint report on how climate shocks can affect the European financial system. The findings show that climate risks can quickly spread and harm companies and banks alike. The report adds further evidence on the systemic nature of climate risks and provides a foundation for a macroprudential policy response. The report identifies several amplifiers of climate risk across the financial system. Transition risks may be magnified because of economic and financial linkages between and across banks and companies. For example, a surge in carbon prices could increase the likelihood that the default of one company leads to the default of another. While this particularly applies to high-carbon companies, it could also affect their less carbon-intensive counterparties. Continue reading…