President Donald Trump has signed the bipartisan Economic Growth, Regulatory Relief, and Consumer Protection Act, which revises supervision of banks with less than $250 billion in assets and adjusts other rules in the Dodd-Frank Act.
Bankers and regulators must aggressively prepare for the end of the London Interbank Offered Rate in 2021, Bank of England Governor Mark Carney and Federal Reserve Bank of New York President William Dudley say. "Time is of the essence, and we must manage it well," Dudley says.
The Federal Reserve is expected to respond to legislation that revises aspects of the Dodd-Frank Act by adjusting requirements for regional banks, while keeping power to supervise them through stress tests. Chairman Jerome Powell says he wants to subject regional banks to "meaningful, strong, regular, periodic stress tests."
Two banks have asked EU policymakers to clarify whether they can continue to operate from London to serve EU clients after Brexit. Banks support mutual recognition, but European Parliament member Danuta Huebner says "mutual recognition is excluded on the EU side as a potential solution, so if I were you I would rather think in terms of how to improve equivalence."
The first phases of noncleared initial-margin rules have reduced the size of the noncleared derivatives market through incentives to centrally clear trades, rather than margining them bilaterally. The initial-margin experience in Phases 3 to 5 is likely to be different because smaller budgets might lead to "greater compliance and technology challenges," writes Mark Demo of AcadiaSoft.
There are still many unknowns around what Brexit will ultimately look like. However, this half-day symposium will consider how potential outcomes can impact US financial institutions and regulatory reforms. There will also be updates on the talks surrounding CCP supervision and what the EU (Withdrawal Bill) will mean for derivatives. REGISTER: ISDA Symposium -- Brexit on June 5 in New York
ISDA leads the industry working groups on the critical topic of trading book capital. In the coming weeks, we will be offering full-day conferences on FRTB, Counterparty Risk and CVA in New York and Toronto. Program topics include Trading/Banking Book Boundary, Sensitivity Based Approach, Standardized Approach for Counterparty Credit Risk (SA-CCR), Internal Models Approach and Non-Modelable Risk Factors. REGISTER: June 19 in New York and June 21 in Toronto
Only in growth, reform and change, paradoxically enough, is true security to be found.
Anne Morrow Lindbergh, writer and aviator
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