Financial Markets

Cost-effective and within seconds: The Commission plans to make real-time transfers, so-called instant payments, available for EU consumers by default. The Centrum für Europäische Politik (cep) welcomes the approach to minimise fraud risks but rejects the draft law in general as too massive and unrealistic.

In the fight against corruption and for higher social and environmental standards, the European Union wants to tighten the Directive on non-financial reporting. In the future, about 15,000 companies in Germany alone are to be obliged to also present an annual report on sustainability — thirty times more than before. The Centrum für Europäische Politik (cep) has analysed the Commission's plans.

The Commission of the European Union assesses commission bans for financial products and intends to submit a proposal on 3 May. Supporters of the ban hope for higher transparency, better quality and lower costs. The Centrum für Europäische Politik (cep) considers inducement bans, e.g. those already in force in the Netherlands and Great Britain, as a break of the established business models and pleads for other solutions.

Cyberattacks increasingly threaten financial institutions in the European Union. The EU Commission therefore wants to foster the stability and security of the European financial sector and its financial institutions such as banks, insurance undertakings or trading venues by means of a new Regulation. The Freiburg think tank Centrum für Europäische Politik has examined the Commission's plans in a cepPolicyBrief.

Central banks around the world are increasingly focusing on the introduction of digital currencies, so-called Central Bank Digital Currencies (CBDC), as innovative means of payment. These are intended to serve both retail payments and trade between financial market players. The Centre de Politique Européenne | Paris (cep) has investigated this development. According to the study, Europe is not ready yet for the digital euro.

The EU Commission wants to strengthen the internal market for investment funds with a package of measures. To this end, it plans to introduce regulations for loan-originating funds and to provide fund managers with uniform instruments for liquidity management. The Center for European Policy (cep) particularly welcomes the uniform requirements for loan-originating funds. However, it sees also enough room for improvement.

Crowdfunding platforms, 0%-financing, buy-now-pay-later offers: The variety of quickly available online credit has increased drastically. While these offers stimulate competition, they lead to new risks for consumers. To strengthen their rights and better protect them from private over-indebtedness, the Commission is working on a new Directive. The Centre for European Policy (cep) generally regards the reform as necessary, but views some of the proposals as too rigid and not yet fully developed.

Shortly before the deadline on 21 January, the German government commented on the European Commission's plan to declare nuclear power and natural gas sustainable. The think tank Centrum für Europäische Politik (cep) sees a lever to legally stop the taxonomy.

Bank failures, imbalances, financial crises: With improvements to the so-called Deposit Guarantee Directive, the EU Commission wants to better protect savers and strengthen confidence in the financial system. The Centre for European Policy (cep) attests that the planned reform has both good and negative approaches.

The European Commission wants to give small and medium-sized enterprises (SMEs) better access to the capital markets, in part by reducing bureaucracy. The Centre for European Policy (cep) has assessed the proposal on the so-called Listing Act as largely positive.

Sustainable investment with a clear conscience: With green bonds totalling 250 billion euros, the Commission wants to refinance about one third of the Corona recovery fund over the next five years. For these bond issuances, it is using a globally recognised market standard. However, it is not really convinced of the market standard.

Google, Apple, Meta: The US, Asia and the EU are seeing an increase in so-called multiple-vote shares. These are supposed to make it more appealing for small family businesses, start-ups and founders to go public, and to protect them from the dangers of hostile takeovers. The EU wants to permit multiple-vote shares on a uniform basis, subject to certain conditions. The Centrum für Europäische Politik (cep) sees more advantages than disadvantages in this plan.

As part of its Green Deal, the EU wants to oblige the financial sector to make its contribution to reducing greenhouse gas emissions. Therefore, the Commission presented an action plan this summer. The goal: the financial sector should become more sustainable.

Crises and ruptures are increasingly showing the European Union the limits of its own ability to act. The EU Commission is therefore striving for a more self-confident role for Europe in the world with "open strategic autonomy". The Centre for European Policy (cep) has critically analysed this plan.

The ratio of non-performing loans (NPL) is increasing again in the member states of the European Union for the first time in five years. The Centre for European Policy (cep) has examined the problem of so-called bad loans in detail in a cepPolicyBrief with a view to proposals by the EU Commission.

In response to the economic shock caused by COVID-19, the EU Commission presented a "recovery package for the capital markets" in the summer, which is currently being discussed by the European Parliament. In three analyses the Centre for European Policy has evaluated the Markets in Financial Instruments Directive (MiFID II), the Prospectus Directive and the Securitisation and Capital Adequacy Directive.

Bitcoin is on the rise. The European Commission has therefore presented a proposal for a Regulation to regulate cryptocurrencies. Before the Commission's proposal is finally approved by the European Council and the European Parliament, the Centrum für Europäische Politik (cep) reports a need for change.

Bitcoin is on the rise. The European Commission has therefore presented a proposal for a Regulation to regulate cryptocurrencies. Before the Commission's proposal is finally approved by the European Council and the European Parliament, the Centrum für Europäische Politik (cep) reports a need for change.

Stable cryptocurrencies, so-called stablecoins, are on the rise. Tech giant Facebook is planning to launch the stablecoin Diem with more than 20 companies such as Spotify and Uber. The company's own crypto-based payment system is expected to emerge this year. The EU is working to create a legal framework.

Stable cryptocurrencies, so-called stablecoins, are on the rise. Tech giant Facebook is planning to launch the stablecoin Diem with more than 20 companies such as Spotify and Uber. The company's own crypto-based payment system is expected to emerge this year. The EU is working to create a legal framework.

There are still high hurdles to overcome on the way to a common deposit insurance scheme for the Eurozone (EDIS), which the EU Commission is striving for. This is the result of an input by the Centre for European Policy (cep) comparing the banking systems of Germany, France and Italy.

The European retail payments markets are still highly fragmented and at the same time faced with challenges triggered by innovations such as instant and mobile payments. The EU retail payments strategy suggests policy measures to avoid inconsistencies and further fragmentation of payment markets in Europe.

In response to the economic shock caused by COVID-19, the EU Commission presented a "recovery package for the capital markets" in the summer, which is currently being discussed by the European Parliament. In three analyses the Centre for European Policy has evaluated the Markets in Financial Instruments Directive (MiFID II), the Prospectus Directive and the Securitisation and Capital Adequacy Directive.

The EU Commission intends to present a new strategy for sustainable financing in the coming months. In spring 2020, it had already held a consultation on the subject. On the basis of the consultation document, the Center for European Policy is examining the ideas that are likely to feed into the new strategy.

In response to the economic shock caused by COVID-19, the EU Commission presented a "recovery package for the capital markets" in the summer, which is currently being discussed by the European Parliament. In three analyses Centre for European Policy has evaluated the Markets in Financial Instruments Directive (MiFID II), the Prospectus Directive and the Securitisation and Capital Adequacy Directive.

In response to the economic shock caused by COVID-19, the EU Commission presented a "recovery package for the capital markets" in the summer, which is currently being discussed by the European Parliament. In three analyses the Centre for European Policy has evaluated the Markets in Financial Instruments Directive (MiFID II), the Prospectus Directive and the Securitisation and Capital Adequacy Directive.

The role of central banks is a recurring theme in the debate on sustainable finance. The European Central Bank (ECB) also wants to address sustainability in its strategic review. This cepInput makes a proposal on how the ECB can take sustainability into account in its collateral policy. 

The EU Commission wants to clarify the legal framework for cryptocurrencies. A cepInput provides an overview of the current state of regulation and examines whether and under which conditions cryptocurrencies are covered by the main provisions regulating the EU financial markets.

On 10 June 2020, the European Parliament and the Council reached a compromise on amendments to the Capital Requirements Regulation (CRR quick-fix). The amendments shall allow banks to channel funds to businesses and households and to absorb the economic shock caused by the COVID-19 pandemic. cep has assessed the agreement in a cepPolicyBrief.

The COVID 19 crisis and its serious consequences for the economy have led to a debate on the need to protect EU companies from being taken over by foreign investors. Consequently, the EU Commission has published guidance on how to deal with investments from third countries. The cep has evaluated them.

The economic consequences of the Corona crisis have raised doubts about the creditworthiness of some euro countries. A cepInput comments on the latest ECB bond purchases and gives recommendations on how to deal with the crisis in the euro zone.

Cryptocurrencies, stablecoins and central bank digital currencies. What will the money of the future look like? A cepInput provides information about what money is, what it looks like today and what it might look like in the future.

After tough negotiations, the European Parliament and EU Member States have agreed on an EU taxonomy. They have thereby provided a binding definition for environmentally sustainable activities and investments. cep has assessed the agreement in an Adhoc.

The future of the eurozone depends crucially on whether the Italian government can reduce its debt ratio. In an input, the cep looks at way to boost Italian economic growth and debt reduction.

On 30 July 2019, the German Federal Constitutional Court has decided whether the single supervisory mechanism (SSM) of the euro zone complies with the German constitution. The question of whether the ECB's banking supervision is covered by the European Treaties is especially relevant. In an Adhoc, the cep assesses a recent ruling of the European Court of Justice (ECJ) on this issue.

In March 2019, the EU Regulation on sustainability-related disclosures in the financial services sector was politically agreed. This cepAdhoc gives an overview of its main elements and assesses them.

An expert group of the EU Commission plans to present recommendations on an EU standard for green bonds in mid-June. In a cepInput, the cep gives an overview of the market for green bonds in the EU and analyses the initial proposals of the expert group for the development of the standard.

In June 2019, the EU-Commission will publish final guidelines regarding the disclosure of climate related, non-financial information by large public interest companies. This cepAdhoc gives an overview of a draft version of the guidelines and analyses their legal value.

The Commission wants to foster cross-border investment by improving legal certainty in cross-border transactions of claims.

On 28 March 2019, the EU Parliament voted on the green EU taxonomy, while the Council has not taken a position yet. This cepAdhoc presents and evaluates the Parliament's position.

In February 2019, the European Parliament and the Council agreed on amendments to the rules on derivatives clearing. A cepAdhoc explains the changes and assess them.

With a regulation, the EU Commission wants to create the framework for sustainable investments. In order to attain this, the criteria that economic activities must comply with to qualify as “environmentally sustainable” are now set out.

The European Commission wants to create a more competitive and innovative European financial sector with initiatives on new financial technologies. Therefore it has submitted a FinTech action plan.

The EU Commission wants to achieve a reduction in the high stocks of non-performing loans. A Directive on credit servicers, credit purchasers and the recovery of collateral aims to prevent a future increase.

Following Brexit on 29 March 2019, the United Kingdom will become a "third country". Financial and other companies domiciled in the EU will then no longer be able to easily fulfil their obligation to clear derivatives with "central counterparties" (CCPs) in London. In a cepAdhoc, short and medium-term EU priorities for derivatives clearing are analysed.

On 4 December 2018, the Eurogroup agreed on a reform of the European Stability Mechanism (ESM). In the run-up to forthcoming changes to the ESM Treaty, cep analyses the Eurogroup’s political agreements.

The Commission wants to facilitate the scaling up of crowdfunding services in the European internal market. This will be based on a Regulation submitted by the Commission. It forms part of the Commission’s agenda to establish a Capital Markets Union.

The Commission proposes to force financial market participants and financial advisors to disclose to what extent they take environmental, social and governance (ESG) factors into account when making investment decisions or providing financial advice. We analyse the Commission‘s proposal and present the negotiating positions of the Council and the European Parliament.

The Commission is pressing for a more sustainable financial sector and has therefore submitted an Action Plan on the financing of sustainable growth. This provides inter alia for a classification system for sustainability (“EU taxonomy”) that will provide a basis for “sustainable” action by financial institutions, rating agencies, market analysts and investors.

The EU Commission wants to contribute to the promotion of the cross-border sale of investment funds. The corresponding proposals for a regulation and a directive provide, among other things, that so-called undertakings for collective investments in transferable securities (UCITS) and alternative investment funds (AIF) may not be obliged to be "physically present" in the host Member States.

The responsibilities and powers of the European Securities and Markets Authority (ESMA) are to be significantly widened. For this purpose, the EU Commission has proposed a Regulation. In addition to ESMA, this will principally affect investment funds, investment firms, trading venues, data reporting services, benchmark administrators and contributors, issuers and of course investors.

The supervision of investment firms in the EU should be more adapted to their respective business models and risks. With this aim, the EU Commission has developed a proposal for a Directive which, by dividing investment firms into three classes, counteracts the consolidation of the sector brought about by regulation.

The supervision of investment firms in the EU will become more adapted to their business models and risks. For this purpose, the EU Commission has proposed inter alia a Regulation on prudential requirements for investment firms.

The European Stability Mechanism (ESM) will be transformed into the “European Monetary Fund” (EMF) and incorporated into EU law. In addition, the EU Commission wants to establish a financial backstop for the European Single Resolution Board (SRB) by way of the EMF.

The European supervisory authority EIOPA will take on more responsibility for the supervision of insurance companies. In this regard, the establishment of an independent Executive Board may reduce Member States’ ability to interpret EU regulations improperly, to their own advantage. The establishment of an Executive Board will also facilitate the punishment of infringements of EU law committed by national supervisory authorities (NSAs) and allow for more effective resolution of conflicts between NSAs.

With the creation of an EU Finance Minister, the European Commission wants to improve coordination of economic policy in the EU. With this aim, he will combine three offices into one - EU Commissioner for Economic and Monetary Union, Chair of the Eurogroup and Chair of the Board of Governors of the European Monetary Fund.

The European Commission wants to give the European Banking Authority (EBA) more responsibility for financial supervision. In cep’s view, however, the EBA’s new tasks, to allow for “ecological and social factors” and to promote consumer protection, may lead to a conflict of interest with its actual task - safeguarding financial stability.

Against the backdrop of increased Chinese foreign direct investments in the EU, the Commission wants to create a legal "framework" for screening foreign direct investments (FDI). The Regulation does provide clarity about the screening procedure to be used by Member States. Vague terms however carry a protectionist risk.

The EU Commission wants to create a framework for a pan-European Personal Pension Product (PEPP). An internal market for personal pensions will promote competition, channel savings towards the capital markets and away from traditional savings deposits in banks and increase the distribution of personal pension products in the EU.

The Commission wants to improve the rules in the EMIR Regulation, particularly those relating to over-the-counter derivatives. In the PolicyBrief on the proposal from the EU Commission for a corresponding Regulation, the easing of the clearing obligation for counterparties that only undertake limited derivative transactions is seen as appropriate because these do not represent a serious threat to the stability of the financial markets.

The EU Commission wants to strengthen the internal market for consumer financial services. In its analysis of the Commission’s Communication, cep regards as appropriate the Commission’s reluctance to bring in new rules on territorial restrictions because such restrictions are not per se limitations on the internal market.

The European Parliament discusses the EU Commission's proposal to introduce an EU deposit guarantee scheme. The cepAdhoc assesses the European Parliament's draft report.

This cepStudy examines the regulatory role of the European Supervisory Authorities (ESAs) and the EU Commission. cep makes ten recommendations for improving control and scrutiny of the ESAs' and the Commission’s activities at Level 2 and Level 3. These include calling on the Council to strengthen its monitoring structures. The ESAs should only be able to develop guidelines where Parliament and the Council do not object.

The Commission wants to reduce red tape with regard to the preparation of prospectuses which have to be published when securities are offered to the public or admitted to trading. This will give companies easier access to the capital markets. In cep's view, however, the proposal will result in distortions of competition and legal uncertainty.

The European Commission wants to remove barriers to cross-border retail financial services and has submitted a Green Paper on the subject. The portability plans set out therein, particularly for life insurance and private health insurance, are, however, in cep's view, unrealistic.

The EU Commission's proposed Regulation on the creation of a European deposit insurance scheme has sparked heated debate. Although the European Deposit Insurance Scheme (EDIS) is initially only intended to apply to the eurozone, in the future it will also apply to Member States who will join the common banking supervision by the ECB. The main component is the creation of a joint Deposit Insurance Fund to provide payouts to depositors and contributions to resolution.

The EU Commission's proposed Regulation on the creation of a European deposit insurance scheme has sparked heated debate. Although the European Deposit Insurance Scheme (EDIS) is initially only intended to apply to the eurozone, in the future it will also apply to Member States who will join the common banking supervision by the ECB. The main component is the creation of a joint Deposit Insurance Fund to provide payouts to depositors and contributions to resolution.

The EU Commission wants to revive the securitisation markets which collapsed during the financial crisis. The stakeholders involved in these markets will be subject inter alia to transparency and due diligence obligations. In addition, the EU Commission wants to create a label for simple, transparent and standardised securitisation (STS securitisation).

The Commission wants to strengthen the internal EU market for capital by 2019. It therefore presents a detailed Action Plan to achieve this aim. It is planning to establish criteria for lending by certain investment funds and to reduce the capital requirements for infrastructure investment. It also wants to revive the European securitisation market and streamline prospectus obligations.

The EU wants to strengthen "economic policy coordination, convergence and solidarity" in the eurozone. It therefore proposes the creation of four Unions: an Economic Union, a Financial Union, a Fiscal Union and a Political Union. This cepPolicyBrief deals with the Economic Union. Economic Union involves the creation of independent National Competitiveness Boards as well as stronger focus on employment and social policy.

The EU wants to strengthen "economic policy coordination, convergence and solidarity" in the eurozone. It therefore proposes the creation of four Unions: an Economic Union, a Financial Union, a Fiscal Union and a Political Union. This cepPolicyBrief deals with the Fiscal Union which involves the establishment of a European Fiscal Board and the creation of a "macroeconomic stabilisation function".

The EU wants to strengthen "economic policy coordination, convergence and solidarity" in the eurozone. It therefore proposes the creation of four Unions: an Economic Union, a Financial Union, a Fiscal Union and a Political Union. This cepPolicyBrief deals with the Financial Union which comprises a Capital Markets Union and a Banking Union supplemented by a common deposit guarantee scheme.

The EU wants to strengthen "economic policy coordination, convergence and solidarity" in the eurozone. It therefore proposes the creation of four Unions: an Economic Union, a Financial Union, a Fiscal Union and a Political Union. This cepPolicyBrief deals with the Political Union which covers strengthening parliamentary control in the European Semester, the unified external representation of the eurozone in the IMF and the establishment of a "Treasury".

The European Commission will put forward proposals for a Deposit Guarantee Scheme (DGS) for the Eurozone on 24 November 2015. The cep sets out six prerequisites such Eurozone DGS should meet.

The European requirements for economic reform and consolidation are being ignored in many capitals. The eurozone countries openly disagree on what role the market should play as a mechanism for ensuring discipline and coordination. To overcome this dilemma, the eurozone should agree on a sovereign default regime for its member states.

The EU Commission presents its plans on the establishment of a Capital Markets Union. With this, it wants improve access to financing for, in particular, small and medium-sized enterprises (SMEs), increase and diversify the sources of funding for businesses and make capital markets more effective and efficient. The cep has taken a closer look at the Commission’s plans for a Capital Markets Union.

From October 2015, banks must meet additional liquidity requirements in the EU. The cep introduces the new rules and highlights their impact.

The Commission assumes an investment gap in the EU, as investments have fallen in the EU by 15% since 2007. Consequently, it wants to mobilise investments in the EU amounting to € 315 billion by creating a European Fund for Strategic Investments (EFSI).

In January 2011, the European Union established three European Supervisory Authorities (ESAs) for the financial sector: The European Banking Authority (EBA, in London), the European Insurance and Occupational Pensions Authority (EIOPA, in Frankfurt) and the European Securities and Markets Authority (ESMA, in Paris). Currently, the Commission is reviewing the regulations governing the three ESAs and will bring forward its proposals for amendments in early 2015.

The Commission wants decisions by stock companies to be based to a greater extent on long-term performance and less on short-term share price fluctuations. It therefore proposes measures aiming to ensure that decisions by stock companies take more account of shareholders' interests.

The EU Commission makes proposals for strengthening the internal market for occupational pensions. It wants to facilitate cross-border IORPs business, ensure effective supervision of IORPs and enhance governance. In addition it extends the obligations for providing information to members and beneficiaries and amends the investment rules.

The Commission wants to increase the stability and transparency of money market funds.

The EU Commission wants to promote financing by way of crowdfunding.

The EU Commission wants to increase the supply of possibilities for long-term financing, particularly for small and medium-sized enterprises (SMEs) and infrastructure projects.

cep analyses the plans enabling the ESM to directly recapitalise ailing banks in the Eurozone. Also, the further development of the ESM serving as backstop for the banking union in being analysed.

The Regulation prohibits "proprietary trading" by larger banks and permits the banking regulators to prohibit "trading activities" so that the trading concerned is only carried out by companies which are separate from the bank.

The Commission wants to introduce a EU-wide reporting obligation for securities financing transactions, tighten rules on the rehypothecation of securities and extend the information requirements for investment funds.

The Commission wants to restrict the level of interchange fees for card payments and eliminate anti-competitive business rules and practices.

With the proposal for a Directive on a 2nd Payment Services Directive, the Commission wants to promote the European payments market and encourage transparency, security and innovation in relation to payments.

The Communication sets out the up-dated EU crisis rules for state aid to banks during the crisis from 1st August 2013. It replaces the 2008 Banking Communication and supplements the remaining crisis rules. Together, they define the common EU conditions under which Member States can support banks with funding guarantees, recapitalisations or asset relief and the requirements for a restructuring plan.

With the creation of a new type of European investment fund (ELTIF), the Commission wants to channel "patient" capital from both professional and retail investors into infrastructure projects, property and non-listed companies.

The Commission wants to increase the distribution of building insurance for elemental damage and ensure that industrial companies can afford to remedy environmental damage.

The Commission proposes that, in future, it will decide, together with a new Resolution Board, on the resolution of banks in SSM States. In addition, a Single Resolution Fund will be set up to finance the resolution costs.

The Commission wants to grant all EU citizens the right to have a payment account with basic features (basic account), make it easier to switch banks, particularly across borders, and improve the transparency and comparability of fees.

The Commission initiates a discussion on a range of possible measures which could help to promote the long-term financing of investment. These include government-backed savings models, greater focus on the capital markets in relation to financing, more voting rights for long-term shareholders and investment funds aimed at long-term investors.

In 2011, the Commission proposed a Directive for an FTT for the whole of the EU but the required unanimous agreement of the Council could not be achieved. The Commission is now proposing to introduce the FTT by way of enhanced cooperation between eleven Member States. The FTT is intended to generate more tax revenue and increase stability in the financial markets.

The Regulation is to ensure complete traceability of transfers of funds in order to facilitate the "prevention, detection and investigation" of money laundering and terrorist financing. The Commission wants the Regulation to implement the recommendations of the Financial Action Transaction Force (FATF) of 2012. The FATF is an international body which develops measures to combat money laundering and terrorist financing.

The Commission is seeking to prevent banking crises, strengthen financial stability and ensure that taxpayers do not shoulder the burden of future banking crises by establishing a recovery and resolution regime for banks and investment firms. Part 1 of the CEP Policy Brief deals with recovery and resolution plans and with further crisis prevention measures.

The Commission is seeking to prevent banking crises, strengthen financial stability and ensure that taxpayers do not shoulder the burden of future banking crises by establishing a recovery and resolution regime for banks and investment firms.