Securities and Exchange Commission Chairman Jay Clayton is asking his staff to encourage more initial public offerings to give investors better access to promising new market entrants. IPOs have been languishing in the US, falling more than a third in 2016 from a year earlier, with many of the companies trading below their debut price.
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Humans will prevail against machines in the battle for financial advisory business, DoubleLine Capital CEO Jeffrey Gundlach says. He cites the danger of robo-advisors' one-size-fits-all solution: "Everybody gets the same portfolio, which means everybody owns the same stock, which means when they all decide to get out, you cause a crash."
The world's top five foreign exchange dealers continue to dominate the sector but have seen their market share dip slightly to 44% in 2016, from 48% the year before, a change attributed to the entry of non-bank liquidity providers, according to a Greenwich Associates report. Over time, the dealers and the newer FX entities might strike up fruitful relationships, according to the report.
Banks are increasingly turning to cybersecurity experts to vet deals for risk, including dormant computer viruses or evidence of industrial espionage. Approximately 85% of executives surveyed by the New York Stock Exchange say vulnerability discovered during an audit preceding an acquisition would make them reconsider the deal.
House Republicans have proposed eliminating a tax deduction companies receive for interest paid on debt. The move, which would generate roughly $1.5 trillion in revenue over 10 years, would affect Wall Street firms that use high-yield bonds to finance corporate takeovers.
Concerns are growing that the US Virgin Islands could slide toward the kind of financial collapse that hit Puerto Rico. The Virgin Islands' government has struggled to meet obligations since a refinery closed in 2012, simultaneously doing away with the biggest private-sector employer and a crucial source of tax revenue.
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US regulators would be wise to stress-test the liquidity of derivatives clearinghouses, similar to reviews underway in Europe, said Federal Reserve Governor Jerome Powell. The Commodity Futures Trading Commission has begun stress tests that look at credit risk but not liquidity risk.
The Federal Reserve on Wednesday will release the results of its Comprehensive Capital Analysis and Review of the nation's largest banks. The results will determine whether the top lenders can buy back shares and go ahead with dividend payout plans.
The Bank for International Settlements is encouraging central banks to start raising interest rates and winding down quantitative-easing efforts. The bank also warned against protectionist efforts and a reversal of global economic cooperation.
The EU will try to come to an agreement with the US Commodity Futures Trading Commission for mutual recognition of each other's derivatives trading rules, Tilman Lueder, head of the European Commission's securities-markets policy unit, said at an industry conference. The commission intends to make a determination that US rules for trading venues are just as strict as EU rules, an action that would apply to at least 90% of Europe's foreign derivatives deals, he said.
Nearly 10 years since the financial crisis, the US economy has recovered more quickly than other jurisdictions due in large part to our robust capital markets and diversified banking system, says SIFMA's President and CEO Kenneth E. Bentsen, Jr. While many reforms have increased transparency and stability, the multitude of them has led to much greater complexity, redundancy and conflicting goals, and in some cases unproductive curtailment of market activity. A cumulative review of the rule set is long overdue.
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