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Hong Kong Regulators Seek Industry Input on Derivatives

By Michelle Price
Published July 18, 2014 Reuters

Hong Kong moved one step closer to implementing the G20 post-crisis reform agenda on Friday with the publication of a long-awaited consultation on the treatment of derivatives trades.

The paper, jointly-issued by the Hong Kong Monetary Authority (HKMA), the city's de facto central bank, and the Securities and Futures Commission (SFC), will help establish detailed rules on how information relating to privately-negotiated derivatives trades are reported to the regulators.

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Don’t Outsource Risk, ASX Head Warns

By Andrew White
Published July 18, 2014 The Australian

Australian Securities Exchange chief executive Elmer Funke Kupper has called for regulators to take a conservative approach to one of the signature G20 reforms — moving the $600 trillion over-the-counter derivatives market to central clearing houses.

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LEI Body Names Chief Executive for Identifier Push

By Alexander Campbell
Published July 14, 2014 Operation Risk and Regulation

The Global Legal Entity Identifier Foundation (GLEIF) has named Stephan Wolf as its first chief executive, following an inaugural board meeting late last month. Based in Basel, GLEIF was set up following a 2011 call by the G-20 group of leading economies for a uniform system of identifiers for financial markets, and is working towards objectives laid out by the Financial Stability Board (also located in Basel) in 2012.

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Overseas CCPs Weather the Storm

By Mike Kentz
Published June 14, 2014 IFR

The G-20 commitment to implement mandatory OTC derivatives clearing was originally thought to present sure-fire business opportunities for clearing houses and futures commission merchant banks alike.

But repeated curve-balls from regulators and clients have hampered clearers’ ability to rake in profits, with central counterparties such as LCH.Clearnet and CME Group now facing the possibility that the launch of their overseas operations could ultimately be seen as a costly failure.

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Data Woes Move Front and Center

By Mike Kentz
Published May 27, 2014 IFR

Discrepancies in how the four main US swap trade repositories collect and store data is threatening to derail regulatory efforts to build a comprehensive view of the over-the-counter derivatives market – a key tenet of the 2009 G20 agreement on financial reforms.

CFTC Commissioner Scott O’Malia will outline a plan for reconciling the various forms of data being reported across the market at a Technology Advisory Committee meeting on June 3, but brokering a compromise is likely to be an uphill struggle.

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Plans to De-Risk 'Too-Big-To-Fail' Banks Face Hurdles in Europe, Asia

By Huw Jones
Published May 16, 2014 Reuters

Global plans to prevent taxpayers from having to pay for big bank failures are at risk because banking supervisors in Europe and Asia do not fully support some of the proposals aimed at drawing a line under the 2007-2008 financial crisis.

Governments have paid out billions of taxpayer dollars to bail out large banks in trouble because of fears that the fallout from a big collapse would be too damaging.

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G20 Pledge to Reduce Reliance on Credit Ratings is Proving a Hard Slog

By Huw Jones
Published May 12, 2014 Reuters

Weaning the financial world away from heavy use of credit ratings is proving harder than expected as workable alternatives are taking time to put in place, global regulators said on Monday.

Leaders of the G20 group of leading economies pledged to end heavy "mechanistic" reliance on ratings in the financial sector after bundled loans based on U.S. mortgages became untradable in 2007 despite being highly rated, triggering a global financial markets and banking meltdown.

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FSB to Publish Report on Sharing Derivative Data

By Stuart Clark
Published May 8, 2014 Finextra

The Chairman of the Financial Stability Board (FSB), Dr Mark Carney, has written to the G20 Finance Ministers and Central Bank Governors  providing an update on financial reforms. The letter summarises the progress so far in completing the programme of reform for the G20 Brisbane summit (which will take place in November), looks ahead to plans for implementation beyond Brisbane and summarises the initial findings of an FSB review of the representation of jurisdictions on the FSB. 

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Swaps Resolution Expected Ahead of G-20

By Helen Bartholomew
Published April 12, 2014 IFR

Regulatory efforts to tackle the “too big to fail” issue could be nearing a conclusion as legal impediments surrounding swap termination rights that have been hampering a cross-border resolution regime for financial institutions look set be resolved in the coming months, eradicating the threat of future taxpayer bailouts.

According to Elke Koenig, president of Germany’s Federal Financial Supervisory Authority, BaFin, the Financial Stability Board is on track to present proposals to global leaders for an international approach to a temporary stay on OTC derivatives contracts for a failed counterparty – a long-standing obstacle to a global resolution regime.

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IB Head Raises CCP Capital Fears

By Christopher Whittall
Published April 9, 2014 IFR

Regulators should review the business model of clearing houses that handle over-the-counter derivatives to ensure they can withstand future crises, a senior investment banker said today.

Speaking at the ISDA Annual General Meeting in Munich, Jean Pierre Mustier – head of corporate and investment banking at UniCredit – said the G20 goal of shifting OTC derivatives into central counterparties to reduce systemic risk made a lot of sense.

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