Finance Guides

New rules on credit rating agencies (CRAs) by EUbusiness — last modified 16 January 2013, 16:08 CET

New rules on when and how credit rating agencies may rate state debts and private firms' financial health were approved by the European Parliament on 16 January. They will allow agencies to issue unsolicited sovereign debt ratings only on set dates, and enable private investors to sue them for negligence. Agencies' shareholdings in rated firms will be capped, to reduce conflicts of interest.

Blueprint for a deep and genuine Economic and Monetary Union (EMU) by EUbusiness — last modified 29 November 2012, 00:15 CET

The European Commission adopted on 28 November a Blueprint for a deep and genuine Economic and Monetary Union, which provides a vision for a strong and stable architecture in the financial, fiscal, economic and political domains.

2013 Annual Growth Survey by EUbusiness — last modified 29 November 2012, 00:25 CET

The European Commission on 28 November adopted the 2013 Annual Growth Survey (AGS), setting out five priorities designed to guide Member States through the crisis to renewed growth. The AGS kick-starts the European Semester for economic policy coordination, which ensures Member States align their budgetary and economic plans with the Stability and Growth Pact and the Europe 2020 strategy.

European Financial Stabilisation Mechanism by EUbusiness — last modified 27 November 2012, 11:37 CET

The European Financial Stabilisation Mechanism (EFSM) provides financial assistance to EU Member States who find themselves in financial difficulties.

Improved access to EU funds for European businesses, towns, regions and scientists: rules of application for the New Financial Regulation by EUbusiness — last modified 30 October 2012, 17:53 CET

Following the recent entry into force of the new Financial Regulation the European Commission has adopted new detailed Rules of application. The delivery of EU funds to businesses, NGOs, researchers, students, municipalities and other recipients will be improved as of 1 January 2013 thanks to simplified procedures. The new legislation increases transparency and introduces higher accountability for anyone dealing with EU finances. It includes wider possibilities to use lump sums and flat rates for smaller amounts, eliminates the need to fill in the same details every time you apply for EU funds and introduces on-line applications as well as many other new features.

Enhanced Cooperation on Financial Transaction Tax by EUbusiness — last modified 23 October 2012, 17:38 CET

In September 2011, the European Commission tabled a proposal for a Directive on a financial transaction tax. The essence of this proposal was that a low-rate, wide-base tax would be applied on all financial transactions with any economic link to the EU. The estimated revenue yield was EUR 57 billion. Following intense discussions for 9 months on this proposal, EU Member States concluded that they would not be able to agree upon it unanimously within a reasonable period. Nonetheless, a significant number of Member States were still eager to have a common FTT. Therefore, 10 Member States formally requested to proceed through enhanced cooperation. They wrote to the Commission, asking for a Decision to be submitted to ECOFIN to enable them to move ahead as a smaller group. Today's Commission proposal for a Decision authorising enhanced cooperation for a financial transaction tax responds to this request.

Cyber Europe 2012 by EUbusiness — last modified 04 October 2012, 16:33 CET

Hundreds of cyber security experts from across the EU are testing their readiness to combat cyber-attacks in a day-long simulation across Europe today. In Cyber Europe 2012, 400 experts from major financial institutions, telecoms companies, internet service providers and local and national governments across Europe are facing more than 1200 separate cyber incidents (including more than 30 000 emails) during a simulated distributed denial of service (DDoS) campaign. The exercise is testing how they would respond and co-operate in the event of sustained attacks against the public websites and computer systems of major European banks. If real, such an attack would cause massive disruption for millions of citizens and businesses across Europe, and millions of euros of damage to the EU economy.

Libor scandal: Amendments to proposed Market Abuse legislation to fight rate-fixing by EUbusiness — last modified 25 July 2012, 13:17 CET

The European Commission has presented amendments to its October 2011 Proposals for a Regulation on Market Abuse and for a Directive on Criminal Sanctions for Market Abuse. In the recent LIBOR scandal, serious concerns have been raised about false submissions of banks' estimated interbank lending rates. Any actual or attempted manipulation of such key benchmarks can have a serious impact on market integrity, and could result in significant losses to consumers and investors, or distort the real economy.

Proposal to protect financial interests of the EU by EUbusiness — last modified 11 July 2012, 23:24 CET

Misuse of EU funds for criminal purposes puts the EU's objectives of generating jobs and growth and improving living conditions at stake. With public finances under pressure throughout the EU, every euro counts. The European Commission, has therefore proposed new rules today to fight fraud against the EU budget by means of criminal law to better safeguard taxpayers' money. The Directive creates a more harmonised framework for prosecuting and punishing crimes involving the EU budget so that criminals no longer exploit differences between national legal systems. The Directive provides for common definitions of offences against the EU budget and for minimum sanctions, including imprisonment in serious cases, and for a common level playing field for periods within which it is possible to investigate and prosecute offences (ie. statutes of limitation). This, says the Commission, will help to deter fraudsters, provide for more effective legal action at national level and make it easier to recover lost funds.

Consumer protection in financial services - Undertakings for collective investment in transferable securities (UCITS) – improved requirements for depositaries and fund managers by EUbusiness — last modified 05 July 2012, 12:30 CET

The European Commission has presented a legislative package that raises standards in financial services and removes loopholes for the benefit of consumers. Specifically, the package proposes new, consumer-friendly standards for information about investments, raises standards for advice, and tightens certain rules on investment funds to ensure their safety. The original UCITS Directive created the internal market for investment funds in Europe. The current EU legislation for investment funds (the UCITS Directive) has been the basis for an integrated market facilitating the cross-border offer of collective investment funds. Managing almost €6 trillion in assets2, UCITS have proved successful and are widely used by European retail investors. UCITS are also regularly sold to investors outside the EU where they are valued due to their high level of investor protection. The Commission's proposed amendments to the current UCITS rules are based on the experience from the financial crisis, so as to continue to ensure the safety of investors and the integrity of the market. In particular, the proposal will ensure that the UCITS brand remains trustworthy by ensuring that the depositary's (the asset-keeping entity) duties and liability are clear and uniform across the EU3. Today's proposal addresses three areas: a precise definition of the tasks and liabilities of all depositaries acting on behalf of a UCITS fund; clear rules on the remuneration of UCITS managers: the way they are remunerated should not encourage excessive risk-taking. Remuneration policy will be better linked with the long-term interest of investors and the achievement of the investment objectives of the UCITS; and a common approach to how core breaches of the UCITS legal framework are sanctioned, introducing common standards on the levels of administrative fines so as to ensure they always exceed potential benefits derived from the violation of provisions.

Consumer protection in financial services - Insurance Mediation Directive (IMD) Revision by EUbusiness — last modified 05 July 2012, 12:27 CET

The European Commission has presented a legislative package that raises standards in financial services and removes loopholes for the benefit of consumers. Specifically, the package proposes new, consumer-friendly standards for information about investments, raises standards for advice, and tightens certain rules on investment funds to ensure their safety. The Commission is proposing a revision of the IMD, which currently regulates selling practices for all insurance products, from general insurance products such as motor and household insurance to those containing investment elements. Consumers are often not aware of the risks associated with the purchase of insurance cover. Whilst accurate professional advice is crucial for insurance sales, recent surveys1 show that more than 70% of insurance products are sold without appropriate advice. The current EU legislation does not deal in detail with the sale of insurance products, rules differ across Member States, and apply solely to intermediaries. The goal of the Commission's proposal is to upgrade consumer protection in the insurance sector by creating common standards across insurance sales and ensuring proper advice. It will do so by improving transparency and establishing a level playing field for insurance sales by intermediaries and sales by insurance undertakings. To achieve this, the following changes are proposed: The same level of consumer protection will apply, regardless of the channel through which consumers purchase an insurance product. Whether a consumer purchases a product directly from an insurance undertaking or indirectly from an intermediary (e.g. an agent or a broker), the consumer will receive the same level of protection. This does not exist today as the current IMD only covers sales provided by intermediaries. Consumers will be provided in advance with clear information about the professional status of the person selling the insurance product. Rules will be introduced to address more effectively the risks of conflict of interest, including disclosure of the remuneration received by sellers of insurance products. Insurance product sales will have to be accompanied by honest, professional advice. It will be easier for intermediaries to operate cross-border, thus promoting the emergence of a real internal market in insurance services.

Consumer protection in financial services - Packaged retail investment products (PRIPS) by EUbusiness — last modified 05 July 2012, 12:23 CET

The European Commission has presented a legislative package that raises standards in financial services and removes loopholes for the benefit of consumers. Specifically, the package proposes new, consumer-friendly standards for information about investments, raises standards for advice, and tightens certain rules on investment funds to ensure their safety. The Commission's PRIPS proposal improves the quality of information that is provided to consumers when considering investments. Investment products are complex and it can be difficult to compare them or fully grasp the risks involved. The consequences of taking unexpected risks and facing consequent losses can be devastating for consumers, given that investments often form the backbone of a consumer's life savings. Given an EU retail investment market of up to 10 trillion euro, buying wrong or unsuitable products can quickly become a major problem. The Commission proposal aims to inform consumers in a format easy to understand by introducing a new, innovative standard for product information, one that is short and plain-speaking, and thus far more consumer-friendly. This document is called the 'Key Information Document' (KID). The proposal foresees that every manufacturer of investment products (e.g. investment fund managers, insurers, banks) will have to produce such a document for each investment product. Each KID will provide information on the product's main features, as well as the risks and costs associated with the investment in that product. Information on risks will be as straight-forward and comparable as possible, without over-simplifying often complex products. The KID will make clear to every consumer whether or not they could lose money with a certain product and how complex the product is. The KIDs will follow a common standard as regards structure, content, and presentation. In this way, consumers will be able to use the document to compare different investment products and ultimately choose the product that best suits their needs. The products for which a KID will be required include all types of investment funds, insurance-based investments and retail structured products, in addition to private pensions.

Tackling tax fraud and evasion in the EU - guide by EUbusiness — last modified 27 June 2012, 20:22 CET

Minimum sanctions for tax crimes, a cross-border tax identification number, an EU tax-payer's charter and stronger common measures against tax havens. These are some of the concrete ideas that the European Commission has put forward today to improve the fight against tax fraud and evasion in the EU. Taking a holistic approach, the EC Communication looks at ways to strengthen current measures and sets out possible new initiatives for eliminating fraud and evasion in Europe.

Better governance for the Single Market - guide by EUbusiness — last modified 14 June 2012, 16:44 CET

The European Commission is proposing to focus efforts on sectors with the largest growth potential. In 2012-2013, the sectors identified are services and network industries. In these areas, the Commission calls on EU Member States to commit to zero tolerance for late and incorrect transposition of Directives. The Commission, for its part, says it will provide enhanced transposition assistance in order to smooth out potential problems. In case of infringements, procedures should take no more than 18 months on average (currently 25.5 months) and Member States should comply with Court rulings within 12 months. To make the Single Market work more effectively, the Commission recommends making better use of IT tools to empower citizens and businesses. It calls on Member States to strengthen problem-solving tools and set up Single Market Centres to better monitor how Single Market rules work.

Excessive Deficit Procedure recommendations on Bulgaria, Germany and Hungary - guide by EUbusiness — last modified 30 May 2012, 16:24 CET

Along with the country-specific recommendations and the conclusions of the in-depth reviews, the European Commission is today also making three proposals to the Council related to the Excessive Deficit Procedure (EDP). Firstly, the Commission is recommending that the Council abrogate the EDP for Bulgaria and Germany, as foreseen in Article 126(12) of the Treaty. In March, Bulgaria and Germany notified that their 2011 general government deficit was below 3% of GDP. Following the validation of these figures by Eurostat on 23 April 2012, and also taking into account that the Commission's 2012 spring forecast shows that these deficits will remain durably below 3% of GDP, the Commission has concluded that the correction of their excessive deficits is ensured. Secondly, the Commission has adopted a proposal for a Council decision to lift the suspension of commitments from the Cohesion Fund for Hungary, after concluding that the country has taken the necessary action to correct its excessive deficit, in line with the Council Recommendation of 13 March 2012. More specifically, the Commission has concluded in its assessment that the 2012 budget deficit target of 2.5% of GDP is expected to be reached and the 2013 budget deficit is expected to be well below the 3% of GDP reference value, despite the slight weakening of the macroeconomic environment, as indicated by the Commission in its 2012 spring forecast. The Commission will continue to closely monitor budgetary developments in Hungary, in accordance with the Stability and Growth Pact.

Conclusion of 12 in-depth reviews - correcting macroeconomic imbalances by EUbusiness — last modified 30 May 2012, 16:13 CET

The in-depth reviews are part of the Macroeconomic Imbalance Procedure, which was introduced to prevent and correct macroeconomic imbalances and which is being implemented for the first time this year. They cover twelve EU Member States, which were identified in the Alert Mechanism Report of 14 February 2012 as warranting further economic analysis in order to determine whether macroeconomic imbalances exist or risk emerging. These Member States are Belgium, Bulgaria, Cyprus, Denmark, Finland, France, Italy, Hungary, Slovenia, Spain, Sweden and the United Kingdom. Each of the twelve in-depth reviews examines the origin, nature and severity of possible macroeconomic imbalances. They assess whether the country is affected by an imbalance or not, and if it is, what the nature of the imbalance is. The reviews confirm that the twelve Member States concerned face macroeconomic imbalances which need to be corrected and closely monitored. They also conclude that the adjustment of economic imbalances is broadly proceeding, as reflected in reductions in current account deficits, convergence in unit labour costs, retrenchment in credit flows or corrections in housing prices. However, in some cases it is not clear to what extent the adjustment is complete and durable, or whether the speed of adjustment is adequate. In many cases, the accumulated internal and external imbalances continue to pose a formidable challenge, for example with regard to private and public sector indebtedness.

2012 country-specific recommendations in the context of the European Semester - guide by EUbusiness — last modified 30 May 2012, 15:55 CET

The country-specific recommendations put forward by the European Commission today give operational guidance for EU Member States while preparing their budgetary policies and for economic reforms that should be enacted over the coming twelve months to boost competitiveness and facilitate job creation. The adoption of the recommendations marks the concluding phase of the European Semester of economic policy coordination, launched with the Commission’s Annual Growth Survey on 23 November 2011. They should be endorsed by the European Council on 28-29 June and formally adopted by the Council in July. The basis for these recommendations is a thorough assessment of the implementation of those adopted last year, combined with a detailed analysis of the national reform programmes and stability or convergence programmes1 that Member States submitted by 30 April 2012. The analysis underpinning the recommendations is presented in 28 staff working documents (again, one for each Member State and one for the euro area). For the first time this year, the recommendations also reflect the findings of the twelve in-depth reviews carried out in the context of the Macroeconomic Imbalances Procedure. The recommendations cover a wide range of issues including public finances and structural reforms in areas such as taxation, pensions, public administration, services, and labour market issues, especially youth unemployment. The programme countries (Greece, Portugal, Ireland and Romania) receive only one recommendation: to implement the measures agreed under their programme.

Fiscal Compact - The EU's new budgetary 'golden rules' by EUbusiness — last modified 29 May 2012, 11:45 CET

The EU fiscal pact -- a German demand as the price of financial solidarity with debt-laden, recession-hit eurozone partners -- introduces "golden rules" making balanced budgets mandatory. Here are the main points:

EU-EIB Project Bonds Initiative - guide by EUbusiness — last modified 23 May 2012, 17:56 CET

The European Commission, Parliament and Council have agreed on a proposal for a pilot phase of Project Bonds. The Project Bond Initiative by the EU and the European Investment Bank will support the financing of commercially viable infrastructure projects in the area of transport, energy and communications infrastructure. The main objective is to attract debt capital market financing at a time when these projects are heavily dependent on bank lending, which is hardly available with long-term maturities.

European Commission report on the application of the Third Anti-Money Laundering Directive - guide by EUbusiness — last modified 16 April 2012, 17:53 CET

In light of the recent adoption of revised international standards and of the European Commission's own review process, a report on the application of the Third Anti-Money Laundering Directive was adopted by the Commission on 11 April. The Report analyses how the different elements of the existing framework have been applied and considers how the framework may need to be changed. It contains an examination of the provisions of the Directive, and in general concludes that although the existing framework appears to work well and that no fundamental shortcomings have been identified which would require substantial changes, some modifications are necessary to adapt to the evolving threats posed. The Commission plans to bring forward a proposal for a fourth anti-money laundering Directive in autumn 2012.