EU Commission favors stability in shuffling financial unit heads

31 January 2017 9:54am

30 April 2015. By John Rega.

Senior European Commission officials are set to shuffle leadership posts in financial services, including María Teresa Fábregas Fernández and Patrick Pearson shifting responsibilities in key areas of markets and crisis management.

Fábregas will replace Pearson atop the unit for financial market infrastructure. She will be in charge of crisis-response rules for clearing and reporting of derivatives.

Pearson is set to take responsibility for rules in crisis management and the resolution of failing financial companies — a unit now led in an acting capacity by the deputy head, Sabino Fornies Martinez. Pearson has already done some work in that area, as his market-infrastructure unit helped prepare the ground for coming legislation on how to handle the failures of securities clearinghouses.

Implementing a similar law for banks will remain a focus for Pearson. The commission must put in place rules for banks’ emergency plans, plus the sharing of losses among creditors in the event of failure.

Plans seen by MLex show that the Brussels executive is opting for stability at this level of the administrative structure before a rotation in the higher ranks of civil servants around the middle of the year.

MLex also understands that Klaus Wiedner, now head of the insurance unit, will take over prudential banking regulation from Niall Bohan, who takes charge of the capital markets union — the signature policy area of EU financial-services commissioner Jonathan Hill.

Hill, who began a five-year term on Nov. 1, is due to choose a shortlist of candidates soon for the head of the Directorate-General for Financial Stability, Financial Services and Capital Markets Union.

Leaders of the policy units within DG Fisma have already begun to shift in the meantime.

Banking, audit, insurance

The EU’s public staff registry lists Bohan in his new post atop the unit planning the CMU. Several other heads, including Wiedner — whose next responsibilities will include legislation to set a minimum leverage ratio for banks — are due to move offices on May 16.

Didier Millerot, who has prepared a review of the EU’s accounting regulation in his current post, is understood to be one of those transfers. He’ll take over another unit on banks and financial conglomerates, with responsibilities including the
pending bill to ringfence lenders’ trading arms.

Alain Deckers, who drafted that proposal, will shift to auditing and credit rating agencies.

Nathalie Berger, leading of Decker’s future unit during debate over legislation on both industries, will fill Wiedner’s current post. She takes charge of insurance as companies and regulators prepare for the start of Solvency II capital requirements on Jan. 1.

Erik Nooteboom, who spearheaded legislation on bank accounts and payment services in his current job, will take over Millerot’s unit for accounting and financial reporting.

Securities markets

Tilman Lueder, now head of asset management, where he led proposals on money market funds and long-term investment funds, will take Fábregas’s seat at securities markets.

After Fábregas saw through legislation to overhaul the Markets in Financial Instruments Directive, Lueder faces years of further work in drafting implementing measures. Besides Mifid II, his new unit must lead the implementation of tightened laws against market abuse, and pending legislation on financial benchmarks.

Eric Ducoulombier, who is now deputy head of the unit on financial services policy and international relations, will be promoted to head of the DG’s office for relations with other EU institutions.

US relations

Pearson and Fábregas’s moves will likely wait until after the May 16 batch, given the sensitivity of ongoing work. The commission is due soon to issue contentious rules under Mifid as well as the derivatives-clearing law — the European Market
Infrastructure Regulation, or Emir.

The commission also is entering crunch time in talks with the US on mutual recognition of derivatives rules, for which Pearson has conducted negotiations with regulators in Washington.

Sven Gentner, another official with experience in the American capital, is due to return to Brussels. Now the EU’s liaison to the US on financial regulator matters, he’s in line to replace Lueder at the asset-management unit.

Maria Velentza, a DG Fisma adviser who worked on the commission’s task force for Greece, is likely to return to a unit head post. Her expected job would be head of macroprudential policy and relations with the European Systemic Risk Board. She preceded Fábregas at the securities unit, helping lay the
groundwork for Mifid II.

Fintech Regulation in 2018