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Brussels, Friday 23 August 2013
Top News from the European Commission
Background notes from the Spokesperson’s service for journalists
Wednesday 4 September: The European Commission adopts communication on shadow banking and proposes draft regulation on money market funds 2
Thursday 5 September– Friday 6 September: The EU at the G20 summit: Improving global confidence and supporting the global recovery 4
Wednesday, 18 September: European Commission to propose draft legislation on benchmarks 6
Wednesday 4 September: The European Commission adopts communication on shadow banking and proposes draft regulation on money market funds
On Wednesday 4 September, the Commission will adopt a communication on shadow banking. On the same day, the Commission will also present its proposal for a Regulation on Money Market Funds (MFF) – one of the areas for action outlined in the communication.
Shadow banking is the system of credit intermediation that involves entities and activities that are outside the regular banking system. Shadow banks are not regulated like banks; they operate outside the regular banking system and yet engage in bank-like activities. The Financial Stability Board (FSB) has roughly estimated the size of the global shadow banking system at around €51 trillion in 2011, up from €21 trillion in 2002. This represents 25-30% of the total financial system and half the size of bank assets. Shadow banking is therefore of systemic importance for Europe's financial system.
Learning all the lessons from the financial crisis, the EU has been implementing regulatory reforms in the financial sector in general and in the banking sector in particular. However, the entire shadow bank sector is not yet properly regulated. We must ensure that risks are not accumulating in the unregulated shadow banking sector, in part because new banking rules could be pushing certain banking activities towards this non-regulated shadow banking sector. The Commission's communication is a follow-up to last year's Green Paper on Shadow Banking (see IP/12/253 and MEMO/12/191). It summarises the work undertaken so far and sets out possible further actions in this important area.
Money Market Funds (MMFs) are an important source of short-term financing for financial institutions, businesses and government. In Europe, around 22% of short-term debt securities issued by governments or by the corporate sector are held by MMFs. MMFs hold 38% of short-term debt issued by the banking sector. Because of the systemic interconnectedness of MMFs with the banking sector, and with corporate and government finance, the operation of MMFs has been at the core of the international work on shadow banking. The Financial Stability Board (FSB) and other institutions such as the International Organisation of Securities Commissions (IOSCO) and the European Systemic Risk Board (ESRB) have analysed the financial sector and concluded that MMFs, while of systemic importance, had not been addressed to a sufficient degree. The draft regulation will respond to the various recommendations that have been made.
Press conference by Commissioner Michel Barnier preceded by a technical briefing (details to be announced).
IP and MEMO will be available on the day.
Commissioner Michel Barnier's website:
Chantal Hughes +32 2 296 44 50
Carmel Dunne +32 2 299 88 94
Audrey Augier +32 2 297 16 07
Thursday 5 September– Friday 6 September: The EU at the G20 summit: Improving global confidence and supporting the global recovery
The G20 summit will take place from 5 to 6 September in Saint Petersburg under the Russian Presidency. The European Union will be represented by the President of the European Commission, José Manuel Barroso, and the President of the European Council, Herman Van Rompuy.
On 23 July, in a joint letter to the 28 EU Heads of State and Government, Presidents Barroso and Van Rompuy set out the key issues that will be up for discussion at the G20 summit.
They call on fellow G20 leaders to improve global confidence and remain vigilant and proactive to support the global recovery and find the way to strong, balanced, sustainable and inclusive growth. On the main priorities of the summit they stress that: 1) growth and employment need to be at the top of the G20 agenda; 2) financial reform needs to be completed; 3) the work on tax avoidance and evasion need to be pushed forward and 4) the reform of the international financial architecture needs to be completed and progress made on development, anti-corruption and energy.
This 8th edition of the G20 leaders' meeting will be held in Russia. Last year's G20 Summit took place in Los Cabos (Mexico). The 2014 edition will take place in Brisbane under the Australian presidency, from 15 to 16 November 2014.
The G20 brings together the world’s major advanced and emerging economies. It has 19 member countries (Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom and United States) and the European Union. Together, they represent around 90% of global GDP, 80% of global trade and two-thirds of the world’s population.
The G20 is considered as the world's premier forum for global economic cooperation. The G20 leaders' process was established in 2008 after a joint EU-US initiative
Participation of the President of the European Commission, José Manuel Barroso, and the President of the European Council, Herman Van Rompuy, in the G20 summit in Saint Petersburg (Russia) on 5-6 September 2013.
Friday 30 August 2013, 11:00 a.m.: Pre-summit briefing (off the record) by the EU's G20 Sherpa in the Berlaymont press room.
Thursday 5 September, 14:30 (Saint Petersburg time): Joint pre-summit press conference by Presidents Barroso and Van Rompuy in Saint Petersburg.
Joint letter of Presidents Barroso and Van Rompuy of 23 July 2013
Update of the brochure "The EU and the G20 – Did you know…?" (27 August)
Further press material on the 2013 G20 summit (30 August)
G20/G8 section on President Barroso's website
President Barroso on Twitter @BarrosoEU
Website of the Russian presidency of the G20 2013
Media accreditation has been extended until 1 August
Dirk Volckaerts +32 2 299 39 44 +32 460 793 944
Wednesday, 18 September: European Commission to propose draft legislation on benchmarks
On 18 September, the European Commission will adopt a draft regulation on benchmarks. The Commission’s aim is to address the issues raised by the alleged manipulation of LIBOR and EURIBOR, and of other benchmarks for commodities and exchange rates. The proposal will set out new rules for the production and use of benchmarks referenced in financial instruments and financial contracts, in order to ensure their integrity by guaranteeing that they are not subject to conflicts of interest, reflect the economic reality that they are intended to measure and are used appropriately.
Benchmarks affect the value of trillions of euro worth of financial instruments globally, and millions of residential mortgages use benchmarks for reference. They determine the amounts of money to be paid out under financial contracts, affect the value of assets held by investors, and are used to assess the performance of investment managers. Doubts about the accuracy and integrity of benchmarks can undermine market confidence, cause significant losses to consumers and investors, and distort the real economy.
The new Market Abuse Regulation (see MEMO/13/595) will ensure that those who manipulate or try to manipulate benchmarks can be punished. This will have a deterrent effect, but deterrence is not enough. Benchmarks need to be calculated and supervised in an appropriate way.
Press conference by Commissioner Barnier preceded by a technical briefing (details to be announced).
Press release and MEMOs will be available on the day.
Commissioner Michel Barnier's website:
Chantal Hughes +32 2 296 44 50 Chantal.Hughes@ec.europa.eu
Carmel Dunne +32 2 299 88 94 Carmel.Dunne@ec.europa.eu
Audrey Augier + 32 2 297 16 07 Audrey.Augier@ec.europa.eu