EU banking watchdog sets out ‘roadmap’ to regulate fintech

European Commission Vice Presidents Valdis Dombrovskis (L) and Jyrki Katainen address a press conference on new initiatives under the Capital Markets Union to promote sustainable finance, FinTech, and crowdfunding. (AFP)
Updated 09 March 2018
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EU banking watchdog sets out ‘roadmap’ to regulate fintech

LONDON: The EU’s banking watchdog set out a “roadmap” on Friday to help plug gaps in how the rapidly evolving financial technology sector is regulated, but urged caution in tackling cryptocurrencies.
New EU rules from January make it easier for startups to offer traditional banking services such as payments.
Andrea Enria, head of the European Banking Authority, said the watchdog will analyze the nature of services provided by fintech firms “with a view to ensuring that similar services, entailing comparable risks, are regulated in a consistent way across the EU.”
The watchdog, which helps the bloc flesh out C rules, will report on its assessment by the end of the year.
Regulators have held back for several years from introducing comprehensive rules for fintech, saying the sector is still tiny compared with mainstream banking. Politicians are also keen not to stifle innovation as London, Paris and Berlin jostle to lure fintech firms.
Enria said the EBA will review regulatory “sandboxes” or controlled environments set up by some national regulators to allow fintech firms to try out new apps on customers.
“We need to ensure that firms can enter and participate in the internal market for financial services on an equal footing and that a high standard of consumer protection is mantained,” Enria said in a speech at Copenhagen Business School.
Brussels made its first foray into fintech regulation this week by proposing an “optional” licensing system for crowdfunding.
Enria said that bringing fintech firms under the same supervisory umbrella as banks just because they compete in some of the same sectors is not the right answer.
But “heightened monitoring” was needed on the links between banks and fintech firms, which often develop new services jointly.
Enria said EBA may recommend changes to existing EU financial rules to make them “technologically neutral” and proportionate for fintech startups.
The EU has said it “stands ready” to regulate cryptocurrencies if no action is taken at the global level after the Group of 20 economies (G-20) meets later this month to discuss possible rules.
Despite some central bankers calling for regulation, there is no strong consensus for new global rules given the different approaches being taken by countries, ranging from bans to no action at all.
Enria said he was “yet to be convinced” that cryptocurrencies should come under the full gamut of regulation, a move that would enter “uncharted territory” and require many years to develop.
Instead, a more “nuanced” short-term strategy could focus on applying anti-money laundering and terrorist financing rules, warnings to consumers — a step already taken by EBA — and preventing banks from holding cryptocurrencies.
“This strategy would avoid granting any official recognition to a sector that is still very heterogenous, changing fast and, as such, difficult to regulate and supervise,” Enria said.


Oil prices climb as Saudi capacity cushions impact

Updated 20 September 2019

Oil prices climb as Saudi capacity cushions impact

  • Kingdom pledges return to capacity by end of November as Kuwait strengthens security for oil sector

LONDON: Oil prices gained on Thursday, supported by supply risks as the market assesses the fallout from last weekend’s drone attacks on Saudi oil
infrastructure.

Brent crude futures gained $1.78 to $63.80 a barrel, while US West Texas Intermediate crude was up $1.28 at $58.40 a barrel.

The attacks knocked out around half of Saudi Arabia’s crude production and severely limited the country’s spare capacity, a cushion for oil markets in any unplanned outage.

“Global available spare capacity is extremely low at present following the weekend attacks, leaving little room for additional outages, which tends to be price supportive,” UBS oil analyst Giovanni Staunovo said.

Earlier this week Saudi Arabia set out a timeline for a resumption of full operations, saying it had restored supplies to customers at levels prior to the attacks by drawing from its oil inventories.

HIGHLIGHTS

• US to impose more sanctions on Iran.

• Cushing stocks at lowest since October, 2018.

• Global excess capacity at low level.

The Kingdom said it would restore its lost production by the end of this month, and bring its output capacity back to 12 million barrels per day by the end of November.

“These plans suggest Saudi Arabia will have no spare capacity for at least the next two and a half months,” consultancy Energy Aspects said.

Saudi Arabia, the world’s leading oil exporter, has said the crippling attack on its oil sites was “unquestionably sponsored” by Iran.

US President Donald Trump said there were many options short of war with Iran and added that he had ordered the US Treasury to “substantially increase sanctions” on Tehran. Iran has denied involvement in the strikes.

Iran warned President Trump against being dragged into all-out war in the Middle East.

US Secretary of State Mike Pompeo has described the weekend strike as an act of war and has been discussing possible retaliation with Saudi Arabia and other Gulf allies.

Kuwait’s oil sector has raised its security to the highest level as a precaution, a Kuwaiti official said.

Separately, weekly data from the Energy Information Administration on US oil inventories provided a mixed snapshot.

Stockpiles of crude in the US the world’s largest oil producer, rose by 1.1 million barrels last week against analysts’ expectations for a drop of 2.5 million barrels.

However, stocks at Cushing, Oklahoma, the delivery point for benchmark futures, fell to their lowest since October 2018.