Collaboration with France's Risk & Compliance Institute is now a reality

27 September 2018

On September 20th, a collaboration was signed in Paris between the Institute of Risk & Compliance and Risk & Compliance Platform Europe. The two parties will continue to live completely independently of each other, but they will rely on good cooperation on the expertise and know-how of each in the appropriate areas. The Institute of Risk & Compliance is a foundation created in autumn 2017. Its president is Michaël Amado. The signing took place at The Westin Hotel, Paris Vendome, after the morning session on Compliance Management. The beautiful hotel is the permanent place of the Institute’s conferences.
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Volatility spikes underline fragilities and risks to EU securities markets and investors

26 September 2018

European Union (EU) securities markets, infrastructures and investors face new risks in the form of high volatility, the European Securities and Markets Authority (ESMA) said in its latest Trends, Risks, and Vulnerabilities (TRV) Report (No 2, 2018). ESMA also re-iterated its concerns about cyber risk and Brexit risks for business operations. The TRV, which covers the first half of 2018, finds that overall risk levels for the EU’s securities markets remained stable but at high levels for most risk categories. Equity and bond volatility spikes in February and May reflected the growing sensitivities. ESMA also sees a deterioration in outstanding corporate debt ratings, and in corporate and sovereign bond liquidity.
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OTP Bank and OTP Faktoring

25 September 2018

In February 2008 Ms Ilyés and Mr Kiss concluded with a Hungarian bank a credit contract for the provision of a loan denominated in Swiss francs (CHF). According to the contract, although the monthly repayment instalments were to be paid in Hungarian forints (HUF), the amount of those instalments was to be calculated on the basis of the current exchange rate between the HUF and the CHF. In addition, the contract refers to the foreign exchange risk in the event of possible fluctuations in the exchange rate between these two currencies.
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VAT: EU Member States still losing almost €150 billion in revenues

24 September 2018

The European Central Bank (ECB) published a guide to on-site inspections and internal model investigations. The publication follows the completion of the public consultation. Inspections are a critical tool for banking supervision worldwide. The objective of the guide, which was drafted in close cooperation with the national competent authorities (NCAs), is to explain how ECB Banking Supervision conducts inspections and to provide a useful document for banks subject to such inspections. Through the publication of the guide, the ECB is enhancing transparency towards the industry.
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EU banks funding plans indicate increased appetite for client deposits and market-based funding in the coming years

21 September 2018

 The European Banking Authority (EBA) published two reports on EU banks’ funding plans and asset encumbrance respectively. The reports aim to provide important information for EU supervisors to assess the sustainability of banks’ main sources of funding. The results of the assessment show that banks plan to match the asset side increase in the forecast years by a growth in client deposits as well as market based funding.
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The FCA announces outcome of investigation into 4 life insurance companies

20 September 2018

The Financial Conduct Authority (FCA) has announced that its remaining investigations into firms, following its thematic review into the fair treatment of longstanding customers in the life insurance sector, have each been closed. The FCA launched the investigation following a thematic review, published on 3 March 2016. This identified further work was required to determine whether 6 of the 11 firms that were involved in the thematic review had failed to meet our standards. These 6 firms were Abbey Life, Countrywide Assured, Old Mutual, Police Mutual, Prudential and Scottish Widows.
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Insufficient strategic steering may exacerbate banks’ profitability challenges

19 September 2018

European Central Bank (ECB) Banking Supervision has published the findings of the thematic review of banks’ profitability and business models conducted from 2016 to the end of the first quarter of 2018. The review shows that although the economic situation of banks in the euro area has generally improved, profitability and business models remain under pressure.
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Why you should use the Hodrick-Prescott filter – at least to generate credit gaps

18 September 2018

Authors: Mathias Drehmann and James Yetman
Excessive credit growth is part and parcel of any financial boom and bust. But what is “excessive”? There is no clear cut answer to this question, so researchers use proxies. Typically, credit is divided, or “normalised”, by some variable such as GDP so that it can be compared across time and between countries. The gap between the level of normalised credit and some “trend” level is then used as a proxy for excessive credit growth.
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The Financial Conduct Authority bans former Deutsche Bank trader, Christian Bittar

17 September 2018

The Financial Conduct Authority (FCA) has banned Christian Bittar from performing any function in relation to any regulated financial activity. Mr Bittar formerly worked at Deutsche Bank where he traded interest rate derivative products referenced to benchmarks including EURIBOR. The FCA has found that Mr Bittar lacks integrity and therefore fitness and propriety to carry out such a role. Mr Bittar made requests to EURIBOR submitters to make high or low EURIBOR submissions, both internally to Deutsche Bank submitters and externally to traders at other EURIBOR panel banks. He did so to benefit the profitability of the trading positions for which he was responsible and, on occasion, the profitability of the trading positions of other traders.
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