BPFI to highlight concerns on EBA consultation paper

BPFI members recently met to discuss our response to the EBA Consultation Paper on the specification of an economic downturn on which it has a number of concerns. The EBA recently launched a public consultation on its draft Regulatory Technical Standards (RTS) specifying the nature, severity and duration of an economic downturn according to which institutions estimate the downturn loss given default (LGD) and conversion factor (CF). These draft RTS are part of the EBA’s broader work on the review of the IRB aimed at reducing the unjustified variability in the outcomes of internal models, while preserving the risk sensitivity of capital requirements. In particular, these draft RTS specify the three conditions – nature, severity and duration – of an economic downturn and propose a methodological approach to identify them. This approach assumes that downturn economic conditions are driven by macroeconomic and credit factors and should be analysed at the level of model components. The consultation runs until 29 May 2017 and BPFI will be providing a response.

Engagement with the ECB on AnaCredit

BPFI contributed to two letters sent in March 2017 to the European Central Bank (ECB) seeking a postponement to the start of AnaCredit, the ECB’s project to collect loan-level data in Europe. Letters from the European Mortgage Federation (EMF) and the European Banking Industry Committee (EBIC) – to which BPFI contributed through the European Banking Federation (EBF) – both called for AnaCredit’s commencement to be pushed back six months to March 2019. They also asked for the ECB to refrain from imposing sanctions on reporting agents under Article 18 of the AnaCredit Regulation for a transitional period. The EBIC letter reiterated concerns expressed in a separate letter from the EBF that the ECB should put in place a framework for AnaCredit reporting to home/host national central banks to avoid potential double reporting.

Domestically, BPFI continues to engage actively with members on implementation by the Central Bank. In April we will launch a separate group to support banks affected by the AnaCredit Phase 3 National Templates in their engagement with the Central Bank.

Markets in Financial Instruments Directive

The Central Bank attended a recent meeting of the BPFI Markets in Financial Instruments Directive (MiFID) Implementation Working Group where representatives from the Securities and Markets Directorate, the Banking Supervision team and the Consumer Protection Division responded to questions raised by the BPFI. Many outstanding issues could not be clarified until the European Securities and Markets Authority (ESMA) issues outstanding Regulatory Technical Standards (RTS) and Delegated Acts. ESMA did issue a large number of RTS in March but there are still further issues to be resolved at European level.

Stakeholder Engagement

At BPFI’s invitation, representatives from the Dept. of Education, the National Council for Curriculum Assessment, the Teaching Council, teacher bodies including the ASTI, TUI, INTO, the Competition & Consumer Protection Commission, MABS, Consumers’ Association, the Irish League of Credit Unions, Insurance Ireland and Chartered Accountants Ireland came together in Nassau House to discuss policy and practice in the field of financial education.  Those responsible for financial education in the main retail banks joined in a wide-ranging discussion which was preceded by a thought-provoking presentation by Deputy Michael McGrath, Fianna Fáil Spokesman on Finance, as well as an update on work by BPFI and various member banks in the field.  All attendees acknowledged the benefit of a Stakeholder Forum of this kind in informing as to the complete range of existing activities and in facilitating a constructive exchange of ideas on possible future activities.

We were pleased to host the latest FIBI INED Forum which was attended by independent, non-executive directors from across the range of FIBI member banks.  Guest speaker, Hugh Callaghan from EY, provided a very engaging briefing on the current state of cyber risk, why it is a business rather than an IT challenge, how regulators are thinking about cyber threats and the questions on which INEDs need to focus.  The Forum is proving very popular in providing a means by which attendees can be informed on pertinent issues and have the opportunity to discuss and consider these; as well as to engage with each other on relevant matters of interest.

BPFI’s Director of Public Affairs and Head of Capital Markets participated in the most recent Government-sponsored Brexit Dialogue – on this occasion one focused specifically on the financial services sector.  Ministers Noonan and Murphy contributed to the event which comprised a series of thematic presentations followed by a roundtable discussion between industry stakeholders, senior civil servants and public sector officials.

BPFI Brexit Forum meets British Banking Association

The Federation of International Banks in Ireland (FIBI) Brexit Working Group and BPFI Brexit Forum held a roundtable meeting in March with the key representatives of the British Banking Association (BBA). Their presentation focused on the potential impact of Brexit on EU customers. They placed a strong emphasis on the need for comprehensive, non-disruptive and temporary transitional arrangements. This was followed by a Q&A session with an open discussion that served as a useful opportunity for BPFI member banks to detail their questions and key focus areas to the BBA as we enter the negotiations phase of Brexit.

BPFI hosts series of events to mark European Money Week

BPFI hosted a number of very successful events in March to mark European Money Week 2017, an annual financial education initiative which takes places in over 30 countries across Europe. As part of the week BPFI held an Economist Master Class event bringing together the chief economists from AIB, Bank of Ireland, KBC Bank Ireland and Ulster Bank with over 160 leaving cert business and economic students to discuss the economic issues of the day.

We also held a Financial Education Stakeholder Forum which saw key stakeholders working in the financial education space come together to share their observations on existing activities in the field of financial education and to consider scope for further activity. Guest speaker on the day was Michael McGrath TD, Fianna Fáil Spokesperson on Finance, whose opening remarks provided the basis for a very lively and engaging debate amongst those present.

BPFI also launched a series of content on www.businesseducation.ie, our online resource for teachers and students of leaving cert business, economics and accounting. This included a series of curriculum linked Case Studies developed with BPFI member banks AIB, Bank of Ireland, KBC Bank Ireland and Ulster Bank.  These provide students with relevant and up-to-date business material, bringing real Irish business stories into the classroom for the benefit of both students and their teachers. Established in 2015, European Money Week aims to raise public awareness on financial literacy and improve financial education for students at primary and secondary level.