L-R: Mark Carney; Sheila Bair; Michel
Barnier; Mary Schapiro; Jamie Dimon; Charles Dallara
"I had a discussion with a very senior regulator recently
who told me: 'Look, I know we’ve gone too far too
fast on some of this and that we’ve made some
errors, but I’m afraid I don’t know
how to stop this process’.
Now that’s quite scary."
Volcker rule: special focus
Australia: Big four face capital question
Second tier set to cash in on APRA move; Suncorp already making
Winners and losers emerge from fragmented FX swap
Inertia around the mandating of FX activity on swap execution
facilities (SEFs) by the Commodity Futures Trading Commission
(CFTC) continues to favour Europe as a trading location.
European regulators battle with derivatives reporting
A review of EMIR reporting is under way as the industry lobbies
regulators to move to single-sided reporting for OTC
derivatives and remove the reporting requirement for
exchange-traded derivatives. What’s more,
cross-border harmonization of derivatives regulation is way
No appetite for more exchange trading in FICC markets
As the Bank of England (BoE) prepares to publish its final
report on fair and effective FICC markets on Wednesday, a
senior official acknowledges there is little support to extend
exchange trading beyond what is mandated by the G20.
Payments companies increase focus on AML following Ripple Labs'
Payments platform Ripple Labs' fine for neglect of
anti-money-laundering measures was a watershed moment for the
payments industry, as it was the first time a company in the
sector had been found to fall outside of compliance in the
FX survey 2015: Rebuilding foreign exchange
The $5.6 billion of fines handed out to six leading foreign
exchange banks will not be the end of the crisis afflicting FX,
but it might be the beginning of the end. The people at the top
of the industry are starting to think more deeply about what
will drive success in the FX markets of the future. How can
foreign exchange rebuild its zest, and its reputation?
BIS moves to end confusion over conflicting FX codes of
The Bank for International Settlements (BIS) has formed a new
FX working group to settle the problem of conflicting codes of
conduct for FX market practitioners, promising to draw the best
from all six existing codes to create a single document that
will be universally applicable.
G-Sib regulation: Sensible answer to the wrong
The Financial Stability Board’s proposals to
identify global systemically important banks (G-Sibs) and
demand they hold extra risk weighted capital at subsidiaries
deemed 'material' is going to be costly for the 30 G-Sibs that
have been picked out.
Regulation and new players in focus for BNP Paribas
Regulatory hurdles, globalization and digitization continue to
transform the transaction-services industry, according to Marc
Carlos, head of corporate trade and treasury solutions EMEA at
European finance: The pros and cons of bank
Europe remains chronically overbanked, and its banks are
resolutely underperforming. Surely the answer lies in M&A?
But with regulatory uncertainties still distracting boards and
chief executives, the low-hanging fruit of European finance is
likely to remain unpicked for now.
Regulation: The price of research in the wake of Mifid
Mifid II forbids the free provision by banks of any benefit to
asset managers that induces business, and that will have a big
impact on bond research.
'Game is up’ for bank DTAs in Europe
Vestager calls for clarity on use in bank capital; CRD IV
loophole may close for southern Europe.
Dubai: DFSA makes example of Deutsche
Regulator hands bank biggest fine yet; Dubai shakes off
Regulation: Banks brace for Basel interest-rate risk
Fears of Pillar 1 capital charge; Rules may hit earnings and
Don't kill off banks' internal risk models
In recent years, policymakers in Europe have promoted
alternative rating agencies, investigated the culture and
practices of the big three, and, in the US, removed references
to CRAs outright in the Dodd-Frank Act. What’s
more, the Basel committee is reviewing the role of sovereign
credit ratings in shaping banks’
Financial institutions: GE sheds assets to sidestep G-Sifi
A big motivation behind GE’s move is the potential
to shed its G-Sifi status, something that institutional buyers
of such assets are acutely concerned by too.
NDF growth challenged by buy-side concerns, product
Non-deliverable forwards (NDFs) have experienced impressive
growth in recent years, providing a solution to the problem of
trading spot FX in many emerging markets (EMs) where currencies
are not deliverable. Regulatory and liquidity concerns,
combined with competing FX products, have moderated buy-side
Basel attacks on credit ratings misfire
The Basel Committee on Banking Supervision’s
(BCBS) proposals to reduce lenders' reliance on external credit
ratings and boost the risk sensitivity of exposures through new
metrics could trigger a slew of unintended consequences,
according to a Fitch report.
TLAC: what you should know
All about the proposed total loss-absorbing capacity
Regulatory and cost concerns crimping BPO adoption
Bank payment obligations (BPOs) could transform the
transaction-services industry, but there is still caution in
the market over associated costs and regulation.
Circuit breakers: Does FX need a kill switch?
Foreign-exchange broker FXCM’s CEO calls
for wider adoption of circuit breakers on FX platforms to
prevent another Swiss franc shocker as seen on Black Thursday,
but critics question whether it is the right solution and even
suitable for an over-the-counter (OTC) market such as FX.
FEMR consultation highlights scale of regulatory challenge in
In its fair and effective markets review, the Bank of England
has acknowledged end-users are largely ill-suited to the task
of combating market misconduct in FICC markets. But opinion
remains deeply divided over how best to strengthen oversight in
wholesale markets, and which regulatory body should lead the
Capital Markets Union: Make do and mend
Jonathan Hill has eschewed grand ambition for practical reality
in his CMU green paper.
Regulation: Philippines remains a tough nut to crack
The country’s banking industry is growing fast.
New laws designed to encourage foreign investment make it
easier for offshore firms to wholly purchase local lenders. But
there are plenty of barriers to entry aside from
Does Europe need its own private placement market?
Private placements have usurped securitization as
Europe’s great SME financing hope. The financial
markets support EU commissioner Jonathan Hill’s
Capital Markets Union initiative to promote it. But the
thriving US market will be hard to compete with, let alone
replicate. Which leaves two questions: Can the EU build it?
And, even if it can, will issuers and investors come?
Brazil's education still smart despite regulatory
Tarpon takes control of Abril for R$1.3 billion; new regulation
might limit numbers of higher students.
Regulatory capital: Banks spread the search for tier-2
Rabo and BPCE pioneer samurai deals; Japanese investors see big
risks at euro banks.
Bank regulation: 'Basel IV’ sparks banker
Basel wants end to use of credit ratings; further regulatory
Treasurers voice fears over EU MMF regulation
Yield-hungry treasurers are keeping a close eye on the progress
of the European Commission’s proposed changes to
money market funds rules, and fear changes to net asset
valuations and the role of credit agencies.
Banking clubs extend global reach
International banking alliances offer a number of benefits to
treasurers – from FX hedging to cash pooling
– while Sepa and the rise of non-bank payment
providers have yet to diminish their allure.
Fragmented payments landscape undermines Asean
While corporates are gearing up for southeast Asian trade
integration, a balkanized regime for processing cross-border
payments is undermining the intra-regional push.
New FX trading standard sees slow adoption
Despite its extension to FX last
year, market participants acknowledge it is likely to be some
time before they feel the full impact of the
liquidity-enhancing trading enablement standardization
Turkey: New rules prompt Vakifbank tier-2 move
Basel III law opens up funding; investors bring $1 billion
Australia: More questions than answers in the Murray
Everyone was a little nervous at the contents of the first
inquiry into the nation’s financial services
industry in over 25 years. It isn’t as traumatic
as most feared, but it leaves some important issues
Banks urged to improve compliance-burden cooperation
Onerous KYC regulations are imperilling trade financing and the
flow of credit to emerging markets. It is high time banks boost
cooperation, aided by technology, to address the challenge, as
industry efforts are found wanting, say treasurers.
Thomas Hoenig interview: Battle against too-big-to-fail
Haunted by the global crisis, policymakers from the US to the
UK are erecting national barriers and waging a war against
too-big-to-fail banking. Vice-chairman of the Federal Deposit
Insurance Corp Thomas Hoenig defends the drive toward
Regulation: Banking's next big hits
Regulation now utterly dominates the banking industry and will
have an even bigger impact in 2015, not just on bank capital
and returns but on the entire legal structure of the
Banks struggle to find the right business model
Banks need new sources of revenue or will remain chained to the
wheel of endless cost cutting as they face continuing
uncertainty about how to best allocate their capital.
Regulators still calling the shots
If systemic risk in the banking system really has been reduced
as much as chief executives say, why are regulators set to have
an even greater impact in 2015?
Litigation: From exceptional items to a cost of doing
The uncertainty for investors over bank litigation extends
beyond hits to bank profits and so, potentially, their ability
to pay dividends and service coupons on capital instruments and
Regulation: EU-US tensions remain over leverage ratio
US officials are waging a war to promote the leverage ratio as
a binding constraint on banks’ capital frameworks,
further imperilling strategic planning for cross-border
Clearing: European banks weigh up US dollar clearing
US fines provoke re-assessment; dollar clearing in Europe
The next regulatory battle: bank structures
From the Volcker Rule to the EU’s proposed
ring-fencing, inconsistent rules on bank structures, both
within the EU and between the US and Europe, are the latest
threat to the global banking model.
Macaskill on markets: Sunset approaches for the Sun
JPMorgan CEO Jamie Dimon made a crucial intervention in a move
to roll back part of the US Dodd-Frank legal reforms to tighten
regulation of banks.
2014: a year in data – SEPA
For years, discussion in the transaction services industry has
tended to default to the impending introduction of the Single
Euro Payments Area, or Sepa. This year, it finally came into
TLAC: Fears for tiers
As 2015 dawns, senior bankers are still poring over the
implications of the Financial Stability Board’s
proposals to boost their total loss absorbing capacity (TLAC)
to ensure that beyond common equity, Additional Tier 1 capital
and Tier 2 subordinated debt, banks still have enough
liabilities on which losses can be imposed in the event of a
failure so that taxpayers never again have to bail them
Sepa provides force for change in transaction banking
The single euro payments area (Sepa) initiative was something
so burdensome it took longer than planned to implement, but
after delays transaction banks and their corporate clients
stand to benefit from this payments regulation.
TLAC and bank M&A: Europe needs consolidation, not
Debt service costs will hit profits; regulators see M&A as
TLAC: what you should know
All about the proposed total loss-absorbing capacity
EC green paper poised to kick-start debate over Capital Markets
Capital Markets Union should be about what investors want to
buy, not just about what investment banks want to sell.
FX regulations doing more harm than good, reveals
New market regulations governing the FX industry have done more
harm than good for FX trading desks, according to an October
survey by TradeTech FX.
Regulation puts global banking in peril
Don’t believe the G20 hype. In interviews with
Euromoney, the world’s top financial policymakers
admit regulatory tensions are tight. What’s more,
the collateral damage of the focus on too-big-to-fail, capital
rules and bankruptcy resolution risk rolling back financial
globalization. Is it time to change the terms of the
Bank relationships: The risk of de-risking
Global banks may feel that purging their correspondent banking
relationships will help them de-risk, but they should beware
the unintended consequences.
Banking: AQR aftermath throws up more questions for
Investors greeted the European Central Bank’s
asset quality review with little more than a shrug. They view
it as merely the first step on a journey to enhanced and
uniform bank supervision that might take a decade to complete.
They are much more worried about the sustainability of
banks’ business models and whether or not they can
even earn enough to service their growing capital stack.
Bank M&A: Europe needs consolidation, not
Debt service costs will hit profits; regulators see M&A as
Banks search for certainty on liquidity rules
The deadline is approaching for the Basel intraday liquidity
rules. But without a defined set of procedures, and concerns
around costs, banks are moving forward reluctantly.
'Super-systemic' CCPs need a TLAC of their own
If forthcoming regulation fails to guarantee robust
loss-absorbing capacity at central clearing counterparties
(CCPs), their increasing systemic importance could usher in a
new generation of organizations that are too big to fail.
Setting the foundations of
There is much discussion around moving towards a standardized
form of banking, but who is setting the standard?
Collaboration could ease KYC burden
Meeting KYC requirements is an irksome and expensive task for
banks to contend with. But there are a slew of offerings from
financial-services companies to ease the compliance
Industry divided as regulators mull NDF clearing
European proposals for mandatory clearing of non-deliverable
forwards (NDFs) published in October seemed to be a decisive
step toward a new framework for FX derivatives trading.
However, responses to the consultation reveal deep divisions
among FX market participants over the way forward.
Bundesbank’s Dombret says trust restored in
European banking system
In an interview with Euromoney, Bundesbank board member Andreas
Dombret sounds an upbeat note on the rigour of the
ECB’s asset-quality review (AQR) and the
eurozone’s resolution arrangements, but issues a
sharp warning over banks’ risk-free treatment of
Banking: Asia-Pacific’s regulation
Pity the regional Asian bank chiefs dealing with myriad local
regulators as well as extra-territorial oversight.
Deutsche's GTB hit by rising regulatory costs
Deutsche Bank’s explicit admission in its
third-quarter results that higher regulatory costs are hitting
the profitability of its global transaction banking business
will come as blow to the bank and a warning to
Social trading grows amid calls for regulatory
The full-scale disruptive potential of social trading is
beginning to become clear, according to proponents. But there
are fears that it is encouraging inexperienced traders to load
up with risk in the pursuit of large returns and there have
been calls for tougher regulation.
Gloves come off in the fight for leveraged finance
Fed gets tough with Credit Suisse; cov-lite loans on the rise
in US and Europe.
Regulation: Sweden’s unfinished finish
The country’s financial regulators are playing
hardball on minimum regulatory capital requirements, mostly
because of mortgage risk weights. Analysts argue that the
Riksbank is using the wrong tool for the job and might even be
damaging the economy as a result.
FX swaps: Market players grapple with fragmentation
Market participants are relatively relaxed about the impact of
last year’s change to the US trading model,
relative to the dire warnings from the global trade association
for OTC derivatives, but global market fragmentation remains a
Banks join forces to confront due-diligence challenge
With various regulatory initiatives demanding that financial
institutions gather and disclose information relating to
customers, a number of firms have responded to what they see as
a market opportunity to develop customer-identity screening
services, with a single, industry-wide utility seen, by some,
as the end-goal.
OTC derivatives reform challenges regulators from South Africa
to Hong Kong
Over-the-counter (OTC) derivatives market reform outside the US
and Europe will be closely monitored by companies who use these
derivatives to manage foreign-currency earnings exchange-rate
Market braces for FSB’s 'scary’ TLAC
The November G20 meeting could see the capital requirements of
systemically important banks doubled.
Corporates look to make regulation pay
It is not common to hear about the positive side of financial
market regulation. But corporate treasurers are finding ways to
turn the new rules to their advantage.
Regulators seek to restore FX’s broken trust
The debate around how to strengthen the regulation of FX
markets continues to rage. Advocates highlight examples of
regulations that have benefited the markets in the long run,
while detractors warn of unintended consequences and cite their
own examples of risk-mitigating measures evolving naturally
within the industry.
Asia DCM bankers ready for Basel III bond rush
Basel III will trigger a wave of bond deals in Asia; China and
India to lead the way.
SEF report: The state of the global market
Euromoney Research Group presents a detailed report into the
swap execution facilities (SEFs) sector. The bespoke content
offers insight into the confusion over the adoption of these
rules and looks at the future opportunities for all market
Corporate treasurers find opportunity amid regulation
Squeezed budgets, tangled systems and regulations are still
holding back corporate treasurers as they search for ways to
make their operations easier and cost effective.
Banco Espírito Santo: Zero risk, zero sense
The Banco Espírito Santo saga is a sharp reminder, as
the ECB’s asset quality review moves towards its
conclusion, of how closely the fortunes of European banks and
sovereigns remain bound together.
Hungary: Banks count cost of FX loan legislation
Forced conversion planned for autumn; bill could top €4
billion, say analysts.
Departing O’Malia stresses SEF data
CFTC commissioner admits data collection 'poor’;
calls for better cross-border cooperation.
Rising compliance costs rupturing banks' trade finance
Collaboration between transaction banks and Swift is helping to
spread the burden and rocketing cost of compliance, but for
some banks' trade finance businesses, client relationships have
already been hit hard by the expense.
Gear up for Sepa 2.0
The extended deadline for Sepa is fast approaching and, despite
initial fears, corporates are set to meet it – but
this is the first step in creating an efficient single European
payments framework. Debate about Sepa 2.0 is now in full
Litigation costs for European banks to double
Credit Suisse estimates $104 billion exposure; exposed
banks’ share prices sell off.
reveal favoured regulatory fix
As the FX regulatory landscape gets revamped, data from the
Euromoney FX Survey 2014 shed light on what the market wants
when it comes to benchmark reform, including its views on
sticking with the current WM Company and Thomson Reuters
US and European regulators clash over cross-border
A CFTC official frustrates
European regulators at the IDX conference by suggesting futures
clearing should migrate to the US to avoid a conflict between
Dodd-Frank and EMIR.
Fall of self-regulated spot FX
Government plans to crack down on the UK’s
foreign-exchange market amid reports of mass manipulation could
see the demise of the London FX fix. Suggested reforms range
from a transparent auction-based pricing system to banning the
practice of last look.
Asia’s financial regulators: Asleep at the
Asia’s financial regulators need to wake up to the
need for rules that suit the region’s
More questions than answers in EU margin draft
Draft rules permit internal modelling; two sides to contract
unlikely to agree.
The ins and outs of eurozone regulation
Lithuania and its fellow Baltic republics are in an unusual
position when it comes to euro adoption. Whereas in the rest of
emerging Europe the majority of banks are outside the eurozone,
but owned by lenders within, in the Baltic states the situation
FX probe digs the dirt to clean up market structure
A high-profile investigation into market manipulation has
heralded increased scrutiny of FX trading practices and could
see major changes to the way the industry operates. But scratch
below the surface and the tide may be turning towards a
healthier market structure.
Banks' FX cash cow runs out of milk
Market rigging lawsuits, trader suspensions and a move to swap
execution facility trading are hurting banks’
ability to make money in foreign exchange, warn analysts.
AT1: Par call pitfalls
Lloyds LME highlights potential risks to investors of early
regulatory calls in the booming AT1 market.
US fires global subsidiarization starting gun
Foreign banks are facing up to the implications of new rules in
the US requiring them to hold capital onshore. But
subsidiarization is set to become a global phenomenon. Bankers
argue they will be hamstrung by trapped liquidity and capital.
Customers might lose out as well. What are the true costs of
ensuring national safety in a global banking system?
FX players lobby Brussels for spot FX
Key players in the global
foreign-exchange community are lobbying the European Commission
to widen the definition of spot FX and free up companies from
onerous reporting requirements, before a vital consultation on
the subject closes for comments in a fortnight.
Traders’ fury at frontloading fiasco
Swap traders are furious at what they describe as a "royal
regulatory cock up" as frontloading comes to the fore and they
struggle to price swaps, while Europe’s financial
regulator has yet to announce a solution despite crisis talks
earlier this month.
OTC derivative costs and compliance burden rockets
More than 200 of the world’s largest companies and
financial institutions have warned that regulation impacting
the multi-trillion dollar over-the-counter (OTC) derivatives
market has multiplied their administrative burden and pushed
hedging costs up to new highs.
ECB and Bank of England poised to call for Basel II capital
treatment for high-quality ABS
High-quality definition to be based on ECB eligibility, EIOPA
criteria, and might be set at "PCS-minus".
US regulators might surprise banks on supplementary leverage
While banks now expect US regulators to follow
Basel’s lead in relaxing the denominator of total
assets, the Fed still worries about dealer dependence on
short-term funding from SFTs and might demand a capital
US regulators tout new capital charges for big banks
The New York Fed published a call for self-insurance on the
capital account while Tarullo repeats the warning of further
risk-weighted charges aligned to dependence on unreliable
AT1: Investors fill banks’ capital begging
Overwhelming demand for a string of bank AT1 deals shows the
extent of investors’ desperation for yield as much
as their faith in the restored health of the banking sector. As
more new investors accept these deals, hopes grow that a
€150 billion AT1 market might emerge quickly now. But
terms have tightened far and fast and AT1 can be
Risk of regulatory par calls rises as AT1 market
Lloyds’ liability management exercise (LME)
highlights the potential risks to investors of early
More favourable capital treatment alone will not fix
Europe’s ABS problem
New origination to provide private-sector assets for QE will
only result from further regulatory clarity.
SEF teething problems frustrate FX market amid liquidity
The CFTC is close to finalizing long-awaited rules for FX
derivatives that will herald a seismic shift to trading these
instruments on SEFs – but those already trading on
SEFs are frustrated with teething problems and unintended
consequences, including illiquidity and extraterritoriality
Nigeria’s regulatory environment hostile to mobile
money – Safaricom CEO
Nigeria seems to be ripe for mobile money, but the concept has
yet to take off compared with Kenya, in part because of bank
lobbying. Bob Collymore, Safaricom’s CEO, tells
Euromoney why Nigeria is lagging behind.
India worse than Iran for repelling foreign company investment:
Trapped cash pulse survey
companies are less likely to invest in India than Iran due to
the seemingly more onerous regulatory and tax regime of the
world’s largest democracy, according to a pulse
survey conducted by Euromoney.
Regulatory firestorm rocks leveraged finance
In attempting to curb the excesses of the leveraged lending
market, regulators might end up pushing it into the arms of the
very private equity sponsors they are trying to rein in.
CLOs: Regulatory triple-whammy derails CLO market
damage contained; lending guidelines could lead to shortage of
LatAm’s best corporate treasurers talk treasury,
regulation and banking
As part of Euromoney’s annual best-managed
companies in Latin America 2014 survey, the treasurers of four
of the region’s largest companies share their
views on managing treasury operations, regulation and banking
ESMA official responds to liquidity fears
has had frequent discussions over the definition of liquidity
during the past three years and is mindful of the need to
monitor the impact regulations such as Mifid II could have on
liquidity on the FX markets, its executive-director tells the
Association for Financial Markets in Europe.
Sepa threatens to induce SME cash-flow squeeze
companies, and particularly small and medium-sized enterprises
(SMEs), could yet suffer a cash-flow squeeze from direct debits
under the Single Euro Payments Area (Sepa) regulation, despite
the European Commission handing companies an extra six months
ESMA calls for clarity on EMIR derivative definition
securities market regulator is seeking clarification from the
European Commission on what constitutes a derivative under the
European Market Infrastructure Regulation (EMIR), in an effort
to address inconsistencies in the definition, particularly
around FX forwards.
Companies use Sepa as opportunity to refine payment
have to be Sepa-compliant this year, and many have used this as
an opportunity to tidy up payment processes to give better
visibility over liquidity and cash flow.
FX benchmark probe highlights flaws in voluntary best
Bank of England conducts a review into what its officials knew
of FX benchmark manipulation, observers call for more robust
adherence to trading best practices.
Private banking: The cost of transparency
With regulation increasing the cost and complexity of
being a global player, private banks have had to rethink their
Why KYB should be at the forefront of corporate
treasurers are reassessing bank counterparty risk and
re-engaging with the mantra of know your bank (KYB) as a direct
result of the onslaught of new financial regulation impacting
the banking sector.
Banks make belated compliance push to combat market
As more financial
scandals continue to emerge, regulators and banks are hoping
technology and new internal controls will allow them to get to
grips with the rogues. Trading floors might never be the same
Offshore private banking: Switzerland may benefit from new
Increased regulation, particularly around knowing the
client and tax transparency, has lessened the appeal of
cross-border banking. The cost of complying with domestic
regulation and international regulation of offshore money has
driven several banks out of certain countries and, in the case
of Switzerland, has forced some private banks to close accounts
to foreign clients.
Regulation: Risk-weighting makes nonsense of leverage
revisions dilute a key safeguard; bankers are
European companies struggle with derivatives reporting
are in danger of failing to comply with the new derivative
reporting standards required under European Market
Infrastructure Regulation (EMIR), one of the most challenging
pieces of regulation companies are facing crunch time
FX industry reels from regulatory earthquake
market tremors are likely to reverberate for years to come as
the global probe deepens, triggering fears of regulatory
Bank Services Billing: European companies seek greater
transparency on bank charges
Europe’s biggest companies are pushing to increase
the amount of transparency on the fees banks charge across the
services they provide, in an effort to bring Europe more in
line with the level of disclosure in the US.
Basel loosens banks’ leverage ratio proposals but
new FX trading world is still uncertain
loosening of rules regarding leverage ratios and collateral by
the Basel Committee on Banking Supervision might boost
banks’ available trading resources, but FX is not
out of the regulatory woods.
Bankers’ lobby weighs Bitcoin
have woken up to the currency’s potentially huge
impact on the global payments system, given the decentralized,
virtual and anonymous nature of the peer-to-peer network.
EC intervenes to forestall Sepa-induced crisis
Commission has moved to thwart the rising threat of another
liquidity crisis in the eurozone by offering European companies
more time to migrate to the Single Euro Payments Area (Sepa)
Private banking: A wave of consolidation
mean private banking is less and less lucrative; the bigger
players will benefit.
Regulation: Bowles targets unfinished business
chair presses on with regulatory proposals; Seeks
parliament’s oversight of ECB.
China IPO market set to open in 2014 following regulatory
mainland Chinese IPO market is set for a comeback this year as
China’s Securities Regulatory Commission lifts a
ban on new stock market listings as early as January and
regulatory overhauls ease risk, analysts say.
How will Sepa impact banks’ $108 billion payments
facing up to the challenges posed by the upcoming Single Euro
Payments Area (Sepa), which threatens to undermine a lucrative
- and historically stable - source of revenue for financial
institutions, with the interchange-fee legislation adding
insult to injury.
Big global corporates stick with cash managers for
companies continue to consolidate their cash management
providers, fewer companies looked to change their banking
relationships over the past year, according to Euromoney survey
Not enough trade for Volcker
Paul Volcker, author of the rule that has banned banks from
proprietary trading, now stand up, perhaps beside Gary Gensler,
recently departed head of the Commodity Futures Trading
Commission, and lambast banks for not trading enough?
Foreign exchange market enters new dawn post-footnote
A new Isda
report reveals how the fight for currency liquidity is on as
foreign exchange trading venues struggle to adapt to the new
Still-fragile buy side uneasy as threat to repo from regulation
in repo markets has yet to recover from lows plumbed following
the financial crisis, despite increasing disintermediation of
banks resulting from regulatory pressures and the search for
The Volcker rule: a modest proposal
The final version of the Volcker rule is unlikely to give
posterity phrases that echo through the ages in the style of
the King James Bible, but the details of its wording are
important to financial market participants, which helps to
explain the extended bickering.
For sovereign rating analysts, hell hath no fury like an EU
investigation by the European Securities and Markets Authority
(ESMA), uncovering alleged flaws in the sovereign-ratings
process, could presage a more intrusive supervisory regime,
rekindling the debate about their role in global financial
ECB battles Basel rules in war for SME finance
investigates whether the need to stimulate European SME
financing will finally soften the regulatory treatment of ABS,
which has now been deemed by the European Commission the
vehicle through which the growth of bank lending can best be
The SME funding challenge
reviving the moribund securitization market is the best way to
channel funding to small and medium size enterprises, the ECB
is now championing the financial technique at the centre of the
systemic collapse five years ago. Convinced any U-turn is
justified to support the small companies that might drive
Europe's economic recovery, the ECB now finds itself at war
with regulators still determined to clamp down hard on
Chain reaction: Can the need for SME finance set
Europe’s securitization market free?
leaders are desperate to kick-start lending to the small and
medium-sized businesses that are crucial to the
continent’s economic recovery and see asset-backed
securities as the key. But the entire sector is constrained by
post-financial crisis rules. In an era that will be remembered
for the unintended consequences of bank regulation, will the
need for SME finance finally unleash Europe’s
Collateral transformation will entrench too big to
regulators have placed the risk-absorbing capacity of
government bonds at the centre of their brave new financial
world, ostensibly opening up revenue opportunities for banks in
collateral-transformation for OTC purposes.
Securitization: Bankers question merits of EIB’s
policymakers hope a new programme to facilitate securitization
will help set free lending to small and medium-sized
enterprises. But ABS specialists doubt the initiative will work
– and if it is needed at all.
Corporate treasurers seek alternatives to money-market
are diversifying away from using money-market funds (MMFs) to
manage short-term liquidity in response to low rates and
proposed regulatory changes that are threatening to impair the
Hopes grow for revival of European securitization market in
Damascene conversion in some regulatory circles in favour of
securitization, as a means of boosting the real economy, has
heartened market participants, but regulatory hurdles remain,
including the liquidity coverage ratio. While continental
European issuance has demonstrated growth, there are grounds
for cautious optimism that 2014 will see the securitization
market, from CLOs to RMBS, spring back to life.
Why the ECB asset-quality review will be no
Everything you thought you knew about the ECB’s
comprehensive assessment was wrong – it
won’t reveal large holes in banks’
Weber sees ECB stress test as a big uncertainty
Banks still dependent on ECB funding; recent run-up in shares
might have gone too far.
Eurozone banks’ NPL crisis threatens to derail
The IMF warns that corporate loan losses for banks in Spain,
Italy and Portugal could hit €282 billion over next two
years, highlighting the scale of the challenge for the
ECB’s asset-quality review amid continued
Leverage ratios: method in the madness
rationale for a higher benchmark is clear but regulators must
clarify its role, alongside a risk-based capital regime, to
reduce distortions and save the securities-financing market
from a liquidity crisis.
Cometh the UK leverage ratio, cometh the deleveraging
– in pictures
Why the UK - and
European - bank-deleveraging cycle has much further to go,
following George Osborne's call for the Bank of England to
review leverage ratios.
Carney’s delusions of regulatory
Given the tax bias
towards leverage, and regulatory equity thresholds for UK banks
that remain a source of systemic risk from the Bank of
England's own analysis, the governor is gambling that new,
untested regulatory standards will temper systemic risk - even
while gunning for the expansion of the financial
The Volcker rule: Five things you need to know
exclusive interview, a former drafter of the Volcker rule
explains why, in its current trajectory, the flagship
regulation will fail to distinguish legitimate market-making
and proprietary risk-taking while banks sound the alarm on
compliance costs, hit to earnings and extraterritoriality
How the regulatory avalanche has triggered an existential
crisis in banking – in one chart
how the regulatory noose is tightening around banks and why no
business stream has been left untouched.
Basel capital rules for banks’ trading books will
shift business models
approach to the regulation of banks’ trading books
– focusing on capturing deep losses during systemic
crises and a tougher approach to internal-risk modeling
– will limit lucrative arbitrage and trading
Forex probe: how to fix the fix
investigation into the alleged manipulation of FX widens, the
jury is out on whether the practice is tantamount to
front-running clients or simply a case of hedging. Suggested
reforms to the benchmark include handing it over to a public
body, or banks’ abandoning fixing-related orders
altogether and treating the flow as normal business, while
others think regulators’ efforts would be better
spent reforming the fix in options contracts.
Carney liquidity rules are an ingenious revolution
flexible liquidity rules will prove key to realizing Bank of
England governor Mark Carney’s bold ambition to
further entrench London’s status as a global
financial hub while addressing the challenge of rising interest
rates and a collateral shortage.
Regulation: Shadow banks slip through the net
regulators are pumping out new rules to address potential
systemic risk within the shadow banking system, with
money-market funds and repo in the firing line. While
governments and central banks continue to offer underhand
guarantees to non-bank credit intermediation, however, the
moral hazard associated with the shadow sector is unlikely to
Regulation: SEF rules hit non-US cross-border trading
seek out non-US counterparties; rules trigger move away from
Bank of England might be open for business, but it's heading
for a fall
England governor Mark Carney is correct that the City of London
should be open to global finance. But he dismisses moral hazard
and market distortions – the inevitable consequence of
easy money and a reflationary UK housing policy – at
Shadow banking: Repo CCPs, anyone?
Recommendation 10 of the Financial Stability
Board’s Policy Framework for Addressing Shadow
Banking Risks in Securities Lending and Repos.
UK Treasury China-bank charm offensive exposes regulatory
Treasury’s courtship of Chinese banks highlights,
in part, London’s relatively flexible regulatory
regime for foreign banks – in contrast to the Fed. It
also opens up a broader debate about subsidiarization and
global banking models, more generally, amid regulatory turf
ECB asset quality review is moment of truth
Europe’s Tarp moment could be looming as ECB
president Mario Draghi issues a sharp warning that the
year-long review of the region’s banking system
will be credible and might require public backstops. Many
long-neglected issues are coming to a head, from accounting and
bank-reporting norms to national regulatory conventions.
However, there is no clarity yet on the hot-button
EMIR reform: The time to act is now
market players are still largely unprepared for the European
Market Infrastructure Regulation, which aims to transform the
derivatives market, writes Rule Financial’s David
Transparency poor amid FX SEF launch
of consistency in how new swap execution facilities (SEFs)
report transaction volume data is making it hard for foreign
exchange participants to conduct aggregate level analysis with
respect to pricing and traded volumes, traders
Transaction banks buckle down to Basle III
more exacting capital requirements of Basle III are prompting
cash management banks to fine-tune their
Adams sets out his stall for IIF
head of the world's largest international lobbying group for
financial firms issues a sharp warning on global regulatory
fragmentation, risk-weighting of sovereign debt and
China’s reform agenda.
German companies trailing in Sepa migration race
Europe’s largest economy are some of the worst
offenders in their lack of readiness to migrate to a new
eurozone payments system, 100 days before it is due to be
introduced across the European Union.
Five reasons why US treasuries will not lose their safe-haven
status any time soon
believe the doom-mongers – US political risk is not
the same as US credit risk, thanks to a plethora of positive
market technicals and the international monetary
Hangover from banks’ use of short-term funding
refuses to go away
global economy recovers, banks’ dependence on
short-term wholesale funding, and repo in particular, could
rise to levels that pose a danger to the financial system,
especially if asset bubbles begin to build again.
Federal shutdown compounds footnote 88 confusion
When the Commodity
Futures Trading Commission (CFTC) created footnote 88 in the
final US rules governing swap execution facilities (SEFs)
– requiring all multi-lateral trading facilities to
register as SEFs whether they trade regulated swaps or not
– the prospect it would be closed on the day of the
registration deadline was probably not on the
Basel’s counterparty-risk proposals under
The chronic overcapacity built up by the leading banks in the
FX market is likely to persist as the cost of building bespoke
electronic trading portals continues to rise.
Banks dodge Libor-benchmark reform bullet in proposed
The European Commission’s latest draft legislation
proposal governing financial market benchmarks, released on
September 18, reveals that lawmakers have dropped some of the
more onerous regulatory requirements that were causing market
participants concern over the summer.
Asian derivatives rebound but EMIR and Dodd-Frank cast long
Derivatives traded on Asia’s exchanges are
staging a recovery, with equity index futures leading the way
– despite a looming threat from global regulation
aimed at taming a sector widely blamed for the financial
ISDA timetables benchmark reform as FCA confirms ISDAfix
A response to the European Commission’s
statement of objections is due in October.
European banking: Investors doubt banking union plan
Survey says banking union will not reduce default risk;
SSM set-up could be pushed into 2014.
Bank capital: Additional tier 1 takes off at
Leads the way with low-trigger temporary write-down
deal; Regulators will push banks to issue.
European Commission schizophrenic on shadow banking
As the European Commission (EC) moves forward with its
first regulatory engagement with the shadow banking sector,
policy experts argue that more work needs to be done to
understand the relationship between banks and non-banks, and
the ways in which shadow lenders – previously beyond
the regulatory perimeter – contribute to the financial
infrastructure as a whole.
European Commission wades into shadow banking with money-market
European regulators are beginning to get to grips with
previously hidden quarters of the shadow banking system with a
series of proposals to regulate money market funds
Buy-side frets as block exemption proves
While foreign exchange swaps and forwards escaped the trading
and clearing requirements of the Commodity Exchange Act, many
FX instruments did not – and one area that has
received less attention than most is the requirement for trades
in those securities to be reported in real time.
Industry poised for FX margin decision
Final rules on margin requirements for non-centrally
cleared derivatives are expected in the coming days and are
likely to include an exemption for foreign exchange swaps and
forwards, analysts say. However, lobbying efforts are likely to
swiftly move on to whether FX derivatives should be mandated
Banks look to turn out the lights on commodities
US regulators are dedicating increasing levels of scrutiny to
the physical commodities interests of investment banks just as
a law allowing Wall Street banks to maintain a presence in the
product area comes up for review.
Bid to redraw European payments landscape faces
While the contentious proposed EU cap on banks’
card fees has drawn much attention, the Payment Services
Directive is also courting controversy, with respect to the
ability of third-party providers to offer payment initiation
services and refund obligations for Sepa direct
Benchmarks: NYSE lands Libor amid regulatory turf war
No conflict of interest with derivatives business, says
CEO; rate must be anchored to market data.
Asset encumbrance debate ignores elephant in the room
Encumbrance of assets on banks’ balance
sheets has shot up in the eurozone periphery especially,
sparking a push for greater disclosure in the market amid fears
over increased risk sensitivity among unsecured
Europe poised for showdown with New York over Libor
European regulators are apparently preparing for a regulatory
turf war over the reformed Libor benchmark. A draft EU
legislative proposal leaked in early June indicates that
Brussels feels that Libor falls within its jurisdiction to
regulate important market benchmarks, their contributors and
Market fears grow as fettering of high-frequency trading draws
Five years on from the financial crisis, high-frequency
trading remains under an intense spotlight, with regulators on
both sides of the Atlantic determined to crack down on alleged
manipulation of markets, triggering an inevitable backlash from
market players that claim illiquidity, price distortions and
regulatory arbitrage will come to the fore if regulators make
good on draconian threats.
Many a slip expected as Europe repo plan moves
A regulatory-driven initiative to boost interoperability in the
European trilateral repo market should boost the efficiency of
collateral. However, before the new system can be put in place,
there is the sizeable task of bringing settlement systems
Concerns remain as US Fatca delay gives banks breathing
The US Treasury’s move to delay the
controversial implementation of the Foreign Account Tax
Compliance Act (Fatca) gives financial institutions more time
to beef up their compliance procedures, but the familiar gripes
about the onerous regulatory burden remain.
US: Fed sows havoc for risk managers
A string of Fed announcements and decisions has baffled
US markets and bank decision makers.
Banking: The herd mentality prevails
Banks are talking a good game about playing to their
strengths. But a real differentiation of business models at the
top of the industry has not happened yet.
Corporates way behind schedule as Sepa deadline looms
Most corporates are still wholly unprepared for
mandatory compliance with the Single Euro Payments Area, the
EU’s flagship cross-border payments system, with a
lack of understanding of its scope and impact.
Taming of China shadow banks crimped by archaic regulatory
The rapid, seemingly uncontrolled, expansion of
China’s shadow banking sector is under intense
scrutiny because of the risks it poses to the banking system,
and the economy itself, but also because the sector is largely
unregulated. Urgent steps are needed to beef up regulatory
vigilance as China seeks to engineer a contraction of credit to
ECB's Cœuré: Cross-border risk sharing needed to
address SME credit crunch
In an exclusive interview with Euromoney, Benoît
Cœuré, member of the executive board of the
European Central Bank, discusses the challenges that the region
faces in stimulating financing to small and medium-sized
enterprises and says non-bank investors are a useful spare
European banks could face €400 billion capital shortfall
in EBA/ECB stress tests
Signs of a U-turn in thinking at the top could see bank balance
sheets finally cleaned up in 'Europe’s Takenaka
moment’, according to analysts at Berenberg Bank,
warning a more punitive leverage ratio could take markets by
New OTC derivatives reporting standard comes to life
In a bid to boost automation and lower costs, a new standard is
being developed for cleared OTC derivatives reporting as
comprehensive regulation comes to the global swaps
Request for proposal: a quiet revolution
The growth of e-auctions, consultants and Sepa, as well as
rising corporate demand for innovative services, means the
request for proposal (RFP) – the bidding process for
corporates when tapping a bank for cash-management services
– is evolving to meet new demands.
Foreign banks fight on in US DCM
Competition in US debt capital markets remains fierce despite
pressure on European banks to retrench from capital-intensive
business lines. Faced with regulatory and funding headwinds,
European banks insist they are staying put, and other non-US
banks are joining them in the world’s biggest debt
Financial transaction tax: Banks might learn the cost of crying
Having lobbied hard against most new financial
regulation for the past five years, the banking
industry’s valid objections to the proposed
financial transaction (Tobin) tax risk falling on deaf
European pension funding: A small victory in a bigger
More common sense, along the lines of the EC reversal of
proposed pension-funding rules, needs to prevail in financial
Inside investment: Stupid is as stupid does
Banks need to be better regulated. But a financial
transactions tax is more than wrongheaded. As currently
formulated, it would be hugely damaging.
Transaction banks: The chicken or the reg?
What comes first for transaction banks? Their financial
institutions clients want them to help meet new challenges
– especially around regulation and depressed earnings
– through innovating new products. But the big cash
managers find most of their technology budgets focused on
dealing with regulatory burdens.
Sovereign debt restructuring: the row rumbles
The IMF’s ambitious plan to flesh out new
sovereign debt restructuring plans is laudable, but it faces
strong opposition from EU policymakers, adding more uncertainty
to the asset class, as fears grow of official sector
restructuring in Greece.
Barrage of regulations undermines clarity on cross-border bank
For all the rhetoric about the importance of international
cooperation in banking oversight, a lack of trust, regulatory
fragmentation and a complex pipeline of divergent policy
measures, particularly at the national level, are preventing
the creation of a workable cross-border bank resolution system,
European banks warn of regulatory
HSBC’s Flint sees tension rise between home and
host regulators; Deutsche says balkanization threatens
Clarification of SEF rules signals lift-off for FX options
The final clarification of the long-awaited rules on swap
execution facilities (SEFs) could prompt more trading venues to
enter the FX options market.
Global repo market reform going nowhere fast
Regulation of the global repo market is inching closer
– particularly in the US – but is hindered by
a lack of consensus on how to proceed internationally, as well
as the oft-touted concerns about the impact on credit flows to
the real economy.
CRD IV trade finance amendments offer little comfort to
European and Basel forbearance on trade finance regulations
will reduce, at the margin, borrowing costs for the larger
corporates but for SMEs the challenge of accessing capital will
remain undiminished until the banking sector is re-capitalized.
Meanwhile, creative financing solutions are afoot.
Companies tapping bond market as first choice for
With regulation constricting banks’ capacity to
carry longer-term loans, corporates are being forced to look
for other sources of capital to fund their strategic growth
Basel III casts shadow over notional pooling
Banks wake up to gravity of know-your-customer
Regulatory noose tightens around banks’
FX survey 2013: Regulation might curb FX options
Schizophrenic regulators killing
American banks lobby for diluted Basel III amid US-Europe
Ring-fencing proliferation raises fears of rule
Basel Committee raises flag over new interest rate capital
Special focus: Sepa
Times are a-changin’ for corporate
The long and winding road to Sepa
Confusion clouds derivatives industry amid Dodd-Frank
Sanctions battle creates compliance challenge for
International cash management banks adapt to a tough new
Transaction banking: a year of fundamental
Solvency II: Mission impossible
BoE King throws another grenade into bank-regulation debate in
bid to shape legacy
US-Europe tensions blight global bank-reform
Alarm over G-Sifi debt buffers
Regulators belatedly tackle potential abuse with the broadening
of Libor investigations
Banks win margin concession but OTC future unclear
Financial Transaction Tax fires move to
Resolution requirements set to boost G-Sifi holdco debt
New liquidity rules prompt mutual back scratching between
banks and corporates
Trichet-led G30 inches towards then limps away from fight with
Basle committee: Regulators climb down over liquidity
Special focus: LCR
Transaction banking won’t be spared the
impact of new UK banking reform bill
Derivatives market braced for regulatory
No time to lose on Sepa compliance
Critics see regulatory capture in new LCR
EU financial transaction tax triggers ire of financial
Mixed messages from Basel on ABS in Europe
Rabo's Moerland warns of rush to banking union
BoE accuses UK banks of improper reporting
Carney under pressure as battle for Basel III rages
Investment banking: The upside of downsizing
Investors demand enhanced disclosures
SocGen moves from lending to markets
Basle III on the brink?
Why Volcker, Vickers and Liikanen are all wrong
Bank of England accuses UK banks of improper reporting
Arguments rage over banking union
Regulation: Enhanced disclosures are a big step
National regulators hamper EU banking union
CFTC misses the point with commingling
Australian CPDO court ruling unlikely to inflict wider damage
on rating industry
EU’s short-selling ban hits markets
Why Kay, Volcker are wrong about ringfencing
Danish central bank talks tough on Basle III and European
Credit default swap ban leaves EUR vulnerable
FSB reveals shadow banking policy options
BlackRock’s Fink calls for sharper global
Canada's Carney: Finance’s new statesman
EU policy deluge hinders banking reform drive
Regulation: The lobby for leverage
Liikanen-led EU review tells Barnier: do what you were going to
The next regulatory battle: the leverage ratio
IMF emboldens financial reformers with damning report
Is your treasury ready for the new global rules?
Regulators move in on hardwiring
SEC infighting nobbles money market reform
JPMorgan challenges regulators
Scandals: Banks' operational risk rockets to new high
Romney and Obama fumble bank reform
Global banks' regulatory hate-list, emerging markets
Basel III? We don't need no Basel III
Fatca deadline looms for international banks
IIF: "Regulate risk, not shadow banking"
Alarm sounded on banks' risk-management
JPMorgan's trading loss proves Volcker rule won't
Banks step up fight against 'mad' financial rules
Bundesbank director sets out challenges facing bank regulators
in Germany and beyond
Regulation: US dealer bond inventory at nine-year
Time to row back on bank regulation?
Former Fed governor on lessons from the crisis
Toxic atmosphere surrounding banks and regulators
US corporate bond market slumps under weight of impending
Volcker rule requirements
Are regulators starting to backtrack?
EMIR finalisation does not close door on FX derivatives
Top banker breaches FSA rules in £2 million share
How private banking firms are dealing with increased
costs from regulation
Einhorn judgement could lead to greater scrutiny of CDS
Inside investment: Out of the shadows
OTC regulation: Collateral management blocks derivatives
Hopes for reduction in liquidity risk might be flawed
Trade Finance survey 2012: Trade not getting the credit
Regulators in denial over legalities of EU treaty
FSA exonerates RBS executives and itself
Lawyers claim "too many regulations coming out"
EBA's latest capital requirements hit
Tempers fray over regulations as ISDA and Sifma sue
Derivatives reform might stumble on collateral-management
Regulation: Supervisors still can’t get it
EuroCCP CEO: "Regulatory capital requirements will hurt, not
kill the CCP"
Nominees try to be Wall Street smart
Downgraded banks face hits from additional collateral
Banks and regulators have bold ideas to address
Regulation: Banks under the cosh from corruption
Vickers capital requirement 'tip of the iceberg'
Volcker rule to cull bank profits, jobs and increase bank
Vickers report to blame for Moody's slew of
Basle III needs a rethink but fast
SEC's ABS shorting ban will have no effect
Inside Investment: The rise of Faginomics
Banks 'will fail' if Vickers report recommendations implemented
Vickers’ UK bank ring-fencing will create more
Europe engages in excessive self-regulation
Financial reform will hold back economic growth until
Banking isn’t working
New rules promote a shadow banking system
CFTC’s Gary Gensler: Banking's enemy #1
Can bankers be their own cops?
Banking sector reform: a definitive guide to the latest
International Financial Law Review
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