EU: Banks have fewer bad loans but still need capital | Macron: UK can keep EU market access, with conditions | European court might get role in bilateral disputes
19 January 2018
GFMA SmartBrief
News on the global financial markets
SIGN UP ⋅   FORWARD
Morning Bell
EU: Banks have fewer bad loans but still need capital
A European Commission report says that the value of nonperforming loans on banks' balance sheets is declining but that the total is still excessive. The commission plans to introduce "statutory prudential backstops" to ensure banks set aside enough capital to absorb losses from loans that go bad.
Reuters (18 Jan.),  Politico Pro (subscription required) (18 Jan.) 
LinkedIn Twitter Facebook Google+ Email
Industry News
Macron: UK can keep EU market access, with conditions
Macron: UK can keep EU market access, with conditions
Macron and UK Prime Minister Theresa May (WPA Pool/Getty Images)
French President Emmanuel Macron said that if the UK wants its banks to retain free access to the European single market, Britain must contribute financially to the EU budget and submit to the authority of EU courts. The approach is commonly called the "Norway model" because that's Norway's relationship with the EU.
Bloomberg (free registration) (18 Jan.),  The Guardian (London) (19 Jan.),  Politico Pro (subscription required) (18 Jan.) 
LinkedIn Twitter Facebook Google+ Email
 
European court might get role in bilateral disputes
The European Commission is proposing that the European Court of Justice play a role in settling trade disputes between the EU and Switzerland, making it a possible model for Brexit.
Financial Times (tiered subscription model) (18 Jan.) 
LinkedIn Twitter Facebook Google+ Email
Weidmann at odds with Lagarde over German surpluses
Weidmann at odds with Lagarde over German surpluses
Lagarde and Weidmann (Sean Gallup/Getty Images)
Bundesbank President Jens Weidmann has dismissed criticism from Christine Lagarde, managing director of the International Monetary Fund, that Germany's current-account and budget surpluses are excessive and that some cash reserves should be diverted to public spending. Lagarde contends lowering the surpluses would reduce global imbalance and curb protectionism, but Weidmann has countered an increase in public spending "would likely be a futile undertaking".
Bloomberg (free registration) (18 Jan.),  Reuters (18 Jan.) 
LinkedIn Twitter Facebook Google+ Email
 
Regulatory Roundup
ESMA guidance expected to update derivatives reporting rules
The European Securities and Markets Authority is expected to publish updated guidance concerning post-trade reporting requirements for over-the-counter derivatives under the revised Markets in Financial Instruments Directive after reviewing industry comments, sources say.
Risk (subscription required) (19 Jan.) 
LinkedIn Twitter Facebook Google+ Email
ESMA considers crackdown on CFDs, binary options
The European Securities and Markets Authority has invited public comments on proposed restrictions to the sale of contracts for difference and binary options by spread-betting firms. The restrictions include limits on leverage and retail customer losses, as well as a standardised risk warning, for CFDs and a ban on selling binary options to retail customers.
Reuters (18 Jan.),  Financial Times (tiered subscription model) (18 Jan.),  Financial Times (tiered subscription model) (18 Jan.) 
LinkedIn Twitter Facebook Google+ Email
UK regulator: EU should honour derivatives contracts
Sam Woods, CEO of the Bank of England's Prudential Regulatory Authority, has told lawmakers that an agreement concerning post-Brexit passporting rules is "both desirable and it is entirely technically feasible" and that EU countries should honour existing cross-border derivatives contracts. "Common sense suggests to me that a solution will be found -- if we get a transition period, it doesn't solve the problem, but it does give more time to fix it and firms' self-serving activity," he said.
Futures & Options World (subscription required) (17 Jan.) 
LinkedIn Twitter Facebook Google+ Email
South Korean cryptocurrency exchanges could be shut down
Policymakers in South Korea are concerned about cryptocurrency exchanges. The government "is considering both shutting down all local virtual-currency exchanges or just the ones who have been violating the law", the head of the Financial Services Commission said.
Reuters (18 Jan.) 
LinkedIn Twitter Facebook Google+ Email
Spotlight on China
China's Q4 GDP growth outstrips expectations
The Chinese economy expanded 6.8% in the fourth quarter compared with Q4 of 2016, faster than expected. The development is expected to help policymakers, who are trying to reduce debt and pollution without reining in growth.
Reuters (18 Jan.),  BBC (18 Jan.) 
LinkedIn Twitter Facebook Google+ Email
Tech Trends
Fintech with research tools gets bank investment
Financial-technology startup Visible Alpha has received a $38 million investment from Goldman Sachs, Wells Fargo, Banco Santander, Macquarie Group and others. Research-fee rules under Europe's revised Markets in Financial Instruments Directive have been a boon to Visible Alpha tools that gauge research quality, according to the firm.
Reuters (18 Jan.) 
LinkedIn Twitter Facebook Google+ Email
GFMA News
AFME's 9th Annual Spanish Funding Conference
AFME's 9th Annual Spanish Funding Conference is the essential industry gathering for recent developments in securitisation and covered bonds markets in Europe. This full-day conference features presentations and panel debates on the challenges facing Spanish markets and what the future may hold. 8 February 2018, Gran Melia Fenix Hotel, Madrid
LinkedIn Twitter Facebook Google+ Email
AFME's 13th Annual European Trading & Market Structure Conference
This award-winning conference focuses on the new frontier for fixed-income trading, venues and technology and offers an opportunity for market participants, policymakers and regulators to discuss issues affecting European financial markets. Topics include:
  • Fixed-income trading under MiFID II
  • QE tapering impact on liquidity
  • Investor forecasts in FI markets
  • Green and sustainable bonds
  • Future of trading technology
  • Impact of MiFID II on trading venues
22 March, etc venues St Paul's, London
LinkedIn Twitter Facebook Google+ Email
Learn more about GFMA:
GFMA | AFME | ASIFMA | SIFMA
  
  
The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don't want it badly enough.
Randy Pausch,
professor
LinkedIn Twitter Facebook Google+ Email
  
  
Sign Up
SmartBrief offers 200+ newsletters
Advertise
Learn more about the SmartBrief audience
Subscriber Tools:
Contact Us:
Advertising  -  Abiy Bekele
P: 919.931.5915
Editor  -  Bridget Lux
Mailing Address:
SmartBrief, Inc.®, 555 11th ST NW, Suite 600, Washington, DC 20004
© 1999-2018 SmartBrief, Inc.®
Privacy policy |  Legal Information