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Week Ahead (19 April)


Wednesday 21 April - European Commission to determine criteria for green investment labels under taxonomy regulation with decision on nuclear and natural gas likely deferred 

On Wednesday, the European Commission is scheduled to publish finalised delegated acts which specifies the activities it plans to allow funds and banks market to investors as environmentally sustainable under its taxonomy regulation.   

The Commission is reportedly split on whether to include natural gas at this stage, with some suggestions that publication of the delegated acts will be postponed in order to overcome the impasse. Following frenetic lobbying activity, it is understood that nuclear will now be subject to a separate proposal in Q4 2021 in order to facilitate firstly a three-month review by waste and radiation experts of the JRC report followed by an additional assessment by the European Commission’s Scientific Committee on Health, Environmental and Emerging Risks.  Natural gas may also be included at that stage if publication of the initial list of delegated acts goes ahead this week as scheduled.

Thursday, 22 April - EBA to hold Public Hearing on the revised draft Guidelines on the characteristics of a risk‐based approach to AML/CFT

On Thursday the European Banking Authority will hold a public hearing on the development of its draft guidelines on anti-money laundering/terrorism financing. A consultation on revised guidelines for a risk-based approach to AML supervision was launched on 17 March and runs until 17 June, and is seeking to address aspects of earlier guidelines which the EBA observed that member states found difficult to implement. The scope of the exercise is limited to amending and adding to the earlier guidelines.

The EBA, in announcing its consultation, said that it was proposing to address issues in a step-by-step manner, and that its revised guidelines would focus on helping competent authorities at member state level to identify risk more effectively. Specifically, it mentioned, "risks that may arise from de-risking practices in some sectors or Member States", and said that it would assist, "by providing greater detail on ML/TF risk assessments and by requiring [member states] to develop a robust supervisory strategy and plan that are based on those risk assessments".

Thursday, 22 April - Mairead McGuinness to address conference on future of Capital Markets Union

The European Federation of Investors and Financial Services Users is holding a conference on Thursday to discuss the future of the Capital Markets Union in the post-Brexit era. Among the attendees addressing the conference will be the European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, Mairead McGuinness, and Irene Tinagli MEP, chair of the Economic and Monetary Affairs committee of the European Parliament. McGuinness is likely to discuss the future relationship between the EU and the UK, highlighting the memorandum of understanding reached in late March on access to financial services. McGuinness may also outline the formal steps that must now be taken before the agreement can be signed. In a statement released announcing the agreement, the UK government said that it expected formalisation of the agreement could be completed "expeditiously", but to date the final steps have not been taken.

Thursday, 22 April - Governing Council of the ECB to meet

The governing council of the European Central Bank will meet this week to discuss monetary policy. Following on from last month's meeting, at which the governing council announced that it was stepping up the pace of purchases under the Pandemic Emergency Purchase Programme, PEPP, no major decisions are expected to be announced.

After the March meeting, the governing council said that it, "expects purchases under the PEPP (Pandemic Emergency Purchase Programme) over the next quarter to be conducted at a significantly higher pace than during the first months of this year". It pledged to spread purchases, "over time, across asset classes and among jurisdictions". No target for monthly purchases was provided, but since the meeting average daily purchases under PEPP have increased from €2.9 billon to €3.7 billion.

Friday, 23 April - Eurozone flash composite PMI to be released

The latest flash composite PMI for the eurozone will be released on Friday. The results are expected to build on the positive data recorded in March, where the final composite output index was 53.2, beating the earlier flash estimate and marking the highest level recorded in the data series since last July. In February the index was 48.8; March's results indicate the second fastest increase in output in two and a half years.

While services declined again, albeit at the slowest rate in seven months, overall growth was driven by the strongest monthly manufacturing production increases seen in the 24 years since the beginning of the PMI index. Germany, in particular, saw its best performance in three years, recording 57.3, while Ireland also enjoyed an eight-month high of 54.5.

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