• Service: Advisory, Regulatory Advisory Services
  • Industry: Financial Services
  • Type: Business and industry issue, KPMG information, Regulatory update
  • Date: 13/01/2014

6 November 2013 Regulatory Update 

Getting to grips with regulatory reform

6 November 2013


This month we've seen considerable activity -


  • the European Council has finally agreed the ECB's supervisory powers, and subsequently the ECB published guidance on the key features of the comprehensive assessment to come,
  • the EBA published a paper on non-performing loans and forbearance,
  • the moves made by the European Commission to bring the Solvency II saga to a close, and finally
  • the continued efforts to reach an agreement on the MiFID 2 text.


Alongside this, the ESAs' Joint Committee also published their work programme, which highlights key cross-sectoral regulatory priorities for the year ahead.


Perhaps the most interesting development is the Asset Quality Review, which is likely to have considerable knock-on effects on the financial sector – and the economy as a whole. I've heard this described as the biggest ever buy-side due diligence contemplated – this sentiment captures the fundamental nature of the ECB's exercise.


I hope you find these articles interesting. If you would like further information on any topic or have any questions, please do not hesitate to contact me or your usual KPMG contact.




Darina Barrett
Head of FS Markets
KPMG Ireland

This month's insights…

The ECB Comprehensive Assessment


On Wednesday 23 October, the European Central Bank (ECB) announced its guidance on the comprehensive assessment that aims to provide transparency on Eurozone bank operations; repair undercapitalised banks; and build confidence in all stakeholders of the banking community.




Financial Stability – National Progress


For those that are interested, there have been two key announcements in the UK around financial stability. The Bank of England has published a discussion paper on a three pronged stress testing approach alongside HM Treasury introducing a series of amendments that will add the 'bail-in tool' to the UK's Special Resolution Regime.


The rest of the EMA region should monitor progress, as quite often these initiatives are re-branded and adopted in due course elsewhere in the region. Follow the links below to read more.



MiFID 2 Edges Closer


A key element of the EU's commitments to the G20 agenda appears to be edging closer to a conclusion, but some major issues remain unresolved, which may yet derail negotiations. The final stage of discussions over the EU's revised market and investor protection rules began in September 2013, however, the long delay since the European Parliament agreed its position last year is hampering progress.




The New Era of Insurance Regulation is Approaching


On Wednesday 2 October, the Commission put forward a draft directive delaying the implementation date for Solvency II – only after receiving assurances from the Council and Parliament that they would not further change this new application date. KPMG believes that, despite some big challenges in the months to come, 1 January 2016 will finally see Solvency II in force.




2014 Work Programme of the Joint Committee of the ESAs


As the role of the ESAs continues to mature, the industry needs to be aware of the joint work programme and their regulatory priorities. The joint committees planned initiatives will cut across all three sectors, banking, insurance and asset management.




On the radar…

  • EBA conference on how to regulate and resolve SIFIs - London 14-15 November 
  • EIOPA Annual Conference - Frankfurt am Main 20 November
  • MiFID 'grand trialogue' on market structure issues - 21 November
  • ECON vote on amendments to the Single Supervisory Mechanism - 25 November
  • European Commission Liikanen proposals expected November


Other news...

KPMG's Global IFRS Banking Newsletter


KPMG's IFRS banking newsletter 'The Bank Statement' is now available. This quarterly newsletter provides updates on IFRS developments which are directly affecting banks. It also considers accounting issues affecting the sector, and discusses potential accounting implications of regulatory developments.


AIFMD: Transposition status


The Alternative Investment Fund Managers Directive (AIFMD) will have a significant re-shaping effect on the alternative investment fund industry in Europe and beyond. In this publication we provide an overview of the AIFMD (Level I and Level II) legal and regulatory framework that governs the alternative investment fund industry in the EU that has, since July 2013, reshaped the operations of managers and the alternative funds they manage.


Access the report.


Financial Transaction Tax


There has been much media speculation in recent times around the proposed EU FTT. The UK's legal action before the EU Court of Justice earlier this year and the more recent negative opinion from the EU Council's own legal service have added fuel to the debate. 


Our EU Tax Centre has set up a dedicated website to share updates.


European Banks: What do Current Valuations Tell Us?


With the German parliamentary elections out of the way and a third term now assured for Chancellor Merkel, the European Banking Union agenda is set to return to the fore in the coming weeks.


We already know that, as a prelude to commencing its role as the overriding supervisor of all European banks by September 2014, the European Central Bank (ECB) will conduct a balance sheet review of eurozone banks to ensure a credible and consistent change of regime towards a common and uniform banking supervision. This exercise, known as the Asset Quality Review (AQR), is due to run concurrent with the European Banking Authority (EBA) stress testing of systematically important banks aimed at assessing future robustness of these banks.






darina barrett, partner

Darina Barrett

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Head of Financial Services Markets

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Financial Services

Senior decision makers in Financial Services continue to face significant challenges. Despite signs of recovery from the crisis there is a pressing need to strengthen risk management practices and the focus remains on issues such as capital & liquidity management, the changing regulatory landscape and cost reduction.


So how do you build and retain a competitive advantage?  At KPMG we have unrivalled experience and expertise across all aspects of the FS sector. We offer audit, tax and advisory services across our four sectors: aviation finance & leasing, banking, insurance and investment management.