UK Prime Minister Theresa May has signed a letter that officially notifies the EU of Britain's withdrawal. The letter will be hand-delivered to European Council President Donald Tusk today and signal the start of negotiations on the terms of Brexit.
Online research services are encroaching on major investment banks' dominance of the securities research industry, with online portals' share of the global market predicted to rise to 15% by 2020, from 1% at the end of last year. These changes have been prompted by Europe's revised Markets in Financial Instruments Directive, which will require banks to charge specific fees for research when it takes effect in January and will replace the current practice of bundling them into commission charges.
Bloomberg maintained its 33.4% market share in financial-market data in 2016; however, demand for its terminals dropped nearly 1% from 2015. The financial industry spent a record $27.5 billion on market data last year, a 3% increase from 2015, according to research by Burton-Taylor International Consulting.
Banca Popolare di Vicenza's 2016 figures show a €1.9 billion loss, sparking concerns that its application for a state bailout may be deemed unviable by European Central Bank regulators because the lender's core capital has fallen below the minimum threshold of 10.25%. Rival banks Monte dei Paschi di Siena and Veneto Banca are also requesting bailout aid from the Italian government.
The European Central Bank wants legislation enacted that would give it oversight of foreign banks and nonbank lenders doing business in the eurozone. The ECB currently directly regulates 126 of the biggest banking companies in the eurozone but not branches or nonbanks that provide financial services.
The UK's Prudential Regulation Authority introduced proposed revised guidance on what it expects from banks that seek to rely on internal-ratings-based models to determine capital requirements. In the consultation paper, the authority suggested that when establishing the probability of residential mortgage defaults, financial firms can supplement internal models with data from prior experience.
Stress testing to determine how well EU corporate pension plans would stand up under "adverse market scenarios" will be held in mid-May, said Gabriel Bernardino, chairman of the European Insurance and Occupational Pension Authority. The review will also look at the extent to which pension plans' responses to market stress spread to the broader economy, he said.
The European Central Bank reportedly has annulled the appointments of five executives, including Stephane Rottier as head of its Brussels office, over staff allegations of favouritism and questions about the ECB's hiring and promotion rules. Complainants say Rottier was handpicked and given a raise, which would be a violation of ECB rules that a position moved to a higher "salary band" must be advertised and open to other candidates.
Tighter monetary policy aimed at addressing China's leverage issues is boosting profit at its largest banks, which benefit from higher borrowing costs. Chinese markets became over-leveraged after the financial crisis.
The European Commission has proposed a pilot study to improve knowledge of blockchain's capabilities and capacities, with an aim of deepening understanding among national regulators. This is the commission's latest move toward awareness of distributed-ledger technology.
The event will hear from renowned industry expert, Ugo Bassi, director of financial markets in the European Commission's DG FISMA, on the European financial regulatory landscape. In a series of keynote presentations and panel debates, leaders on post-trade will share their views on regulatory changes and reporting requirements, the influence on post-trade of Brexit and the rise of digitalisation in post-trade.