While much of Europe is celebrating Halloween, All Saints and possibly “Not Brexit Day” on October 31st, change is well underway in the European Union. Firstly, Brexit’s Exit Date has been pushed back to January 31, 2020, in what the EU has offered as a “final” extension to allow the UK to head to its first December General Election since 1924. There is no certainty that what is expected to be an impassioned election could break the parliamentary impasse and there is concern, on both sides of the Channel and the Irish Sea, that putting contingency planning on hold, could have adverse impacts. Secondly, the Von der Leyen (VDL) Commission is likely to take office later than planned after a number of last minute new Commissioner nominations following the European Parliament’s rejections of certain confirmation hearings. 

Change is also underway at the ECB both in terms of incoming President Lagarde replacing outgoing Mario Draghi’s stewardship, who again at his last monetary policy press conference reiterated calls for fiscal policy action on a coordinated but intensified level. He did so again, in addition to calling for increased action to deliver a reinvigorated Capital Markets Union, during his farewell event, at which outgoing President Draghi was equally thanked by national leaders for “doing whatever it takes” during his tenure. Draghi’s departure is not the only change, notably as the ECB looks to fill the board seat that is open following Sabine Lautenschläger’s resignation following her reservations on renewed monetary policy stimulus that the ECB recommenced in September. It certainly has been a busy October for institutional, regulatory, monetary policy and equally financial markets change – not least in the start of the move to replacement risk free rates and first publication of €STR as part of the EU Benchmarks Regulation starting to have operational impact – please see our dedicated coverage and materials on our support in this area.

Other changes ahead follow-on from the EU’s announced Action Plan and Finance Ministers now expected in December to call on the European Commission to contemplate the feasibility of creating a new independent enforcement body with direct powers to police and enforce breaches of compliance with EU and national anti-money laundering and prevention of financial crime laws. This move would be a bold move forward beyond the concentration of coordination powers with the European Banking Authority and equally the ECB’s AML Office. The ECB has itself also been busy in expanding its scope of where it directs scrutiny, including, as of most recently, interest in strength of netting opinions and what this means for prudential capital. 

We hope you enjoy this month’s edition. Please stay tuned to our Eurozone Hub for further periodic updates, including thematic deep dives on developments from European and national authorities that are likely to have considerable “change the business” but also “change the compliance” impacts.