The Group of 20 leading economies has stressed its commitment to the Basel III capital framework despite the US administration's known preference for a loosening of regulations. The announcement has eased concerns that the US might be more forceful in opposing Basel III, thus provoking a possible conflict with European regulators.
Angel Oak Capital Advisors has unveiled its first rated securitization of nonagency residential mortgages, which Fitch Ratings and DBRS have rated AAA. The release represents a fresh breed of mortgage-backed securities, which differ significantly from predecessors because underlying loans are fully underwritten and documented, with substantial down payments required.
Deutsche Bank is offering attractively priced loans to help investors buy soured mortgages to meet the terms of the lender's $7.2 billion mortgage settlement with the US government, sources said. Goldman Sachs Group, however, is seeking to meet the obligation by purchasing soured mortgages to modify them.
Changes to rules governing money market mutual funds have touched off a flight to government funds as prime and municipal funds implement fees for redemptions during economic shocks. Data show investors tend to use the same fund family, even when shifting into government funds.
Data are critical for firms to implement Europe's revised Markets in Financial Instruments Directive. Some are calling for the European Securities and Markets Authority and national competent authorities to make source data available as market participants prepare for a January deadline.
Reliable algorithmic-trading strategies are getting harder to maintain as more traders access advanced quant techniques, according to research by Bank of America. The volume of code required to stay ahead is expanding.
Since the financial crisis, high-frequency trading has helped connect buyers and sellers, and total US volumes "are more than double what they were in the pre-crisis, largely pre-HFT years," according to a Credit Suisse report. Despite new and proposed regulations, the report says HFT will remain a driving force.
Hedge funds closed in 2016 at the fastest rate since 2008, according to data from Hedge Fund Research. Fund liquidations totaled 1,057 last year, the biggest number since 2008 when 1,471 hedge funds shut down.
Blockchain technology could solve the challenges that confront creating global repositories for derivatives data, said J. Christopher Giancarlo of the Commodity Futures Trading Commission. Piecing together the data to allow regulators to see companies' risk exposure is "an almost herculean task," but a distributed-ledger approach could make the long-sought-after goal a reality, he said at a conference in Washington, DC.
A European Central Bank official has said it is closely monitoring the use of cloud technology, which banks are adopting increasingly in their efforts to cut operational costs. The official said the ECB does not object to outsourcing in principle, but a balance must be found between cost-cutting opportunities and risks.
The European Central Bank has issued guidelines on non-performing loans and called on banks to make concerted efforts to reduce them. A statement on its website says banks with large NPL volumes are required to submit "ambitious and realistic" plans on how they will comply with the guidelines.
The Office of the Comptroller of the Currency has released draft rules for a new kind of bank charter for financial-technology companies. The draft supplement to the regulator's licensing manual states that firms granted the fintech charters must comply with all the requirements that apply to conventional banks.