The Vice President of the European Commission, Valdis Dombrovskis, has given a keynote speech at the Guildhall in London covering, amongst other things, the EU’s proposals for the development of the European sustainable finance framework and a proposed extension to the temporary equivalence regime for U.K. central counterparties.
On the subject of sustainable finance, Mr. Dombrovskis notes that Europe would require trillions of euros over the next decades to fund the intended transition to a climate-neutral economy. He outlined plans to fund this transition, including: (i) the production by the European Commission of a Sustainable Europe Investment Plan which would supposedly unlock €1 trillion of sustainable investment over the next decade; (ii) the use of regulatory incentives to stimulate private investment; (iii) the use of at least 25% of the EU budget to contribute to sustainability goals and (iv) the dedication of at least half of the European Investment Bank’s funds to climate action projects. Regulatory reforms will include disclosure rules for financial market operators, an EU taxonomy of sustainable economic activities and EU green bond standards.
Mr. Dombrovskis also addressed concerns about central clearing in the case of a no-deal Brexit. The EU’s current temporary equivalence regime for the U.K.’s regulation of CCPs is due to expire on March 30, 2020. Mr. Dombrovskis confirmed in his speech that the equivalence regime will be extended beyond that date to prepare for any Brexit eventuality. The EU also has a temporary equivalence regime for the U.K.’s regulation of central securities depositories, which expires on March 30, 2021. Mr. Dombrovskis made no mention of any extension to the CSD equivalence regime in his speech.