Latest news with #EuropeanFinancialsConference
Yahoo
26-03-2025
- Business
- Yahoo
ECB to decide by next week on wider use of favourable capital rule, source says
By Francesco Canepa and Valentina Za FRANKFURT (Reuters) - The European Central Bank will decide at the latest by next week whether favourable capital rules on banks' insurance holdings, known as the 'Danish Compromise', also apply when the insurance units buy an asset manager, a person close to the matter said. The decision, which follows requests from France's BNP Paribas and Italy's Banco BPM to use the Danish Compromise in purchases of asset managers carried out through their insurance businesses, potentially has far-reaching implications for consolidation across Europe's financial sector. The Danish Compromise reduces the burden for banks of owning an insurer by letting them hold capital against insurance holdings on a risk-weighted basis rather than deducting them in full from their capital. The idea is that, given the insurance sector's tight regulation, a full capital deduction is not necessary. Under a broad interpretation of the rules, the Danish Compromise could also sharply reduce the capital impact for a bank of buying an asset manager through its insurance arm. BNP Paribas' acquisition of AXA Investment Managers and Banco BPM's bid for Italian asset manager Anima Holding are both relying on the ECB continuing to grant Danish Compromise status to the expanded insurance businesses. The ECB's decision is communicated to the banks in question, which can then inform markets. The ECB is also planning to publish guidelines after the individual decisions. The European Parliament a year ago approved regulation that made permanent the Danish Compromise, which was a temporary arrangement agreed in 2012 when Denmark held the European Union's rotating presidency. A regulatory clarification has indicated that the favourable treatment could apply not only to insurance businesses held by banks, but also to assets those banks buy through their insurance units. A broad interpretation of the rule could stoke further deals in Europe's financial sector, bankers have said. However, the ECB's chief supervisor, Claudia Buch, has said each application is assessed individually. This week, Frank Elderson, vice chair of the ECB's supervisory board, reiterated requests by banks to apply the Danish Compromise were processed "strictly on a case-by-case basis" and that there was no set timeline for a decision. However, he said supervisors were aware of the need for clarity. "The ECB, and I myself am acutely that questions about the Danish Compromise are very much top of the minds of many people in this room and probably many people outside of this room," he told Morgan Stanley's European Financials Conference. "I cannot speak to any specific transactions or banks," he said, adding "we are very much aware that the market and many of you would like to see clarity sooner rather than later."
Yahoo
23-03-2025
- Business
- Yahoo
UBS CEO says better early warning will help make banking safer
ZURICH (Reuters) - UBS CEO Sergio Ermotti on Wednesday urged authorities to improve their ability to detect problems at banks as he sought to find common ground over efforts to overhaul the Swiss banking sector following the 2023 demise of Credit Suisse. UBS is at the heart of the debate on new regulations because of the significance it assumed when it acquired the stricken Credit Suisse, and the question of how much extra capital it should hold to be sufficiently robust is highly contentious. The bank says saddling UBS with excessive capital demands would put it and the Swiss financial centre at a disadvantage, and in a memo to staff he posted online, Ermotti urged authorities to act prudently when drawing up new rules. He backed key planks of reform proposals set out by the government and said it was important that authorities are able to detect potential weaknesses earlier. "Public stress tests like those used in the U.S. and other jurisdictions can better pinpoint the strengths and weaknesses of financial institutions," Ermotti said. He also backed steps that would address canceling and clawing back compensation from people who had been negligent. Speaking earlier on at the European Financials Conference organized by Morgan Stanley, Ermotti said he expected more clarity in May on the capital requirements question, but noted that UBS does not control the political process.
Reuters
21-03-2025
- Business
- Reuters
ECB to decide by next week on wider use of favourable capital rule, source says
FRANKFURT, March 21 (Reuters) - The European Central Bank will decide at the latest by next week whether favourable capital rules on banks' insurance holdings, known as the 'Danish Compromise', also apply when the insurance units buy an asset manager, a person close to the matter said. The decision, which follows requests from France's BNP Paribas ( opens new tab and Italy's Banco BPM ( opens new tab to use the Danish Compromise in purchases of asset managers carried out through their insurance businesses, potentially has far-reaching implications for consolidation across Europe's financial sector. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. The Danish Compromise reduces the burden for banks of owning an insurer by letting them hold capital against insurance holdings on a risk-weighted basis rather than deducting them in full from their capital. The idea is that, given the insurance sector's tight regulation, a full capital deduction is not necessary. Under a broad interpretation of the rules, the Danish Compromise could also sharply reduce the capital impact for a bank of buying an asset manager through its insurance arm. BNP Paribas' acquisition of AXA Investment Managers and Banco BPM's bid for Italian asset manager Anima Holding ( opens new tab are both relying on the ECB continuing to grant Danish Compromise status to the expanded insurance businesses. The ECB's decision is communicated to the banks in question, which can then inform markets. The ECB is also planning to publish guidelines after the individual decisions. The European Parliament a year ago approved regulation that made permanent the Danish Compromise, which was a temporary arrangement agreed in 2012 when Denmark held the European Union's rotating presidency. A regulatory clarification has indicated that the favourable treatment could apply not only to insurance businesses held by banks, but also to assets those banks buy through their insurance units. A broad interpretation of the rule could stoke further deals in Europe's financial sector, bankers have said. However, the ECB's chief supervisor, Claudia Buch, has said each application is assessed individually. This week, Frank Elderson, vice chair of the ECB's supervisory board, reiterated requests by banks to apply the Danish Compromise were processed "strictly on a case-by-case basis" and that there was no set timeline for a decision. However, he said supervisors were aware of the need for clarity. "The ECB, and I myself am acutely that questions about the Danish Compromise are very much top of the minds of many people in this room and probably many people outside of this room," he told Morgan Stanley's European Financials Conference. "I cannot speak to any specific transactions or banks," he said, adding "we are very much aware that the market and many of you would like to see clarity sooner rather than later."
Reuters
20-03-2025
- Business
- Reuters
Monte dei Paschi expects necessary approvals for Mediobanca bid by end-June, CEO says
MILAN, March 20 (Reuters) - Monte dei Paschi ( opens new tab expects to receive all the relevant approvals to launch its takeover offer for Mediobanca ( opens new tab by the end of June, Chief Executive Luigi Lovaglio said on Thursday. Speaking at Morgan Stanley's European Financials Conference in London, Lovaglio also said the stake in Generali ( opens new tab which makes Mediobanca the biggest investor in the insurer was "nice to have" but not essential to the project the deal is based upon.
Reuters
19-03-2025
- Business
- Reuters
UBS CEO says better early warning will help make banking safer
ZURICH, March 19 (Reuters) - UBS (UBSG.S), opens new tab CEO Sergio Ermotti on Wednesday urged authorities to improve their ability to detect problems at banks as he sought to find common ground over efforts to overhaul the Swiss banking sector following the 2023 demise of Credit Suisse. UBS is at the heart of the debate on new regulations because of the significance it assumed when it acquired the stricken Credit Suisse, and the question of how much extra capital it should hold to be sufficiently robust is highly contentious. here. The bank says saddling UBS with excessive capital demands would put it and the Swiss financial centre at a disadvantage, and in a memo to staff he posted online, Ermotti urged authorities to act prudently when drawing up new rules. He backed key planks of reform proposals set out by the government and said it was important that authorities are able to detect potential weaknesses earlier. "Public stress tests like those used in the U.S. and other jurisdictions can better pinpoint the strengths and weaknesses of financial institutions," Ermotti said. He also backed steps that would address canceling and clawing back compensation from people who had been negligent. Speaking earlier on at the European Financials Conference organized by Morgan Stanley, Ermotti said he expected more clarity in May on the capital requirements question, but noted that UBS does not control the political process.
