Brexit prompts EU to rethink capital-markets union | ECB official warns about calm market conditions | Deutsche Boerse CEO says M&A no longer focus
19 May 2017
GFMA SmartBrief
News on the global financial markets
Morning Bell
Brexit prompts EU to rethink capital-markets union
A draft document shows EU officials have been forced by the UK's withdrawal to reconsider the capital-markets union. Officials also aim to develop an alternative financial market to London, according to the document.
Reuters (17 May.) 
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Know Your 2017 FS Regulation for US, EU and APAC
Clutch Group's 2017 Regulatory Report consolidates key policy and enforcement trends from 26 regulatory agencies across the U.S., the E.U., and Asia with an introductory letter by Clutch Regulatory Head and former FCA Enforcement Investigator, Charles Hastie.
Industry News
ECB official warns about calm market conditions
ECB official warns about calm market conditions
Coeure (Vladimir Simicek/AFP/Getty Images)
European Central Bank official Benoit Coeure has warned of a disconnection between currently calm market conditions and brewing political turbulence, which he says could provoke a major market correction.
Financial Times (tiered subscription model) (18 May.) 
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Deutsche Boerse CEO says M&A no longer focus
Deutsche Boerse CEO Carsten Kengeter said at the company's annual general meeting he has focused on foreign exchange, energy, raw materials and other commodity trading, rather than big mergers, since the failed London Stock Exchange Group merger. "But that does not mean acquisitions, partnerships and investments are no longer possible," said Kengeter, who faced criticism from investors regarding the failed merger.
Reuters (17 May.),  Financial Times (tiered subscription model) (17 May.) 
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Deutsche Bank reportedly urged to prepare for hard Brexit
European regulators have called on Deutsche Bank to prepare contingency plans in case of a hard Brexit, in which Britain would leave the EU without a robust deal in place on future trade and cross-border banking, a source said. This eventuality would complicate derivatives dealings, which are predominantly cleared in London, and Deutsche Bank's high exposure to that sector would make it especially vulnerable.
Reuters (18 May.) 
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Greece backs fresh austerity measures
The Greek parliament, in a vote backed by all 153 members of the governing coalition, enacted a bill committing the country to additional austerity measures demanded by its creditors. The action clears the way for the release of more bailout funds and negotiations on debt relief for Greece.
Kathimerini (Greece) (18 May.),  Greek Reporter blog (18 May.),  Politico Pro (subscription required) (19 May.) 
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Regulatory Roundup
ECB worried about signals it sends, minutes show
The European Central Bank's public statements "should be adjusted in a very gradual and cautious manner" to avoid touching off extreme market reactions, according to minutes of the ECB's governing council April meeting. Any small change in communication could lead to "premature and unwarranted tightening of financial conditions" due to the lengthy period of relaxed monetary policy, council members said.
Reuters (18 May.),  European Central Bank (18 May.),  Politico Pro (subscription required) (18 May.) 
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European Commission to address euro clearing soon
The European Commission is expected to recommend in June whether clearing of euro-denominated contracts should be based in the eurozone. Brexit has prompted discussion about the issue since much of the market is based in London.
Reuters (18 May.),  Financial Times (tiered subscription model) (18 May.) 
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Stress testing of EU pension plans gets underway
The EU's insurance regulator said it has begun stress testing European corporate pension plans. The European Insurance and Occupational Pensions Authority said the tests are intended to give it a better understanding of the vulnerabilities and risks of the region's occupational pensions.
Reuters (18 May.),  Politico Pro (subscription required) (18 May.) 
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Spotlight on China
China to encourage more commodities trading
The China Securities Regulatory Commission is looking at opening futures contracts for a wide range of commodities and raw materials in an effort to encourage more foreign trade and investment, with individual Chinese exchanges also making similar plans. The move is seen as part of China's long-term plan to be more influential in global price setting.
Bloomberg Professional Services (24 May.) 
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Tech Trends
BNP Paribas backs communications system Symphony
BNP Paribas has injected $63 million in Symphony, a communications platform that will ultimately replace email and voice systems. Symphony Communication Services has already attracted significant investments from a consortium of major financial institutions.
The Trade (UK) (18 May.) 
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AFME's inaugural European Compliance and Legal Conference will take place on 19-20 September at De Vere Grand Connaught Rooms in London
Registration is now open for AFME's inaugural European Compliance and Legal Conference which will bring together a high-level audience to engage with leading industry experts and discuss key issues shaping the legal and compliance functions in the European financial sector. Individuals will hear from the regulators on the latest developments, network with senior legal and compliance officers and discover how their peers and clients are navigating the new market landscape.
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Learn more about GFMA:
ASIFMA's 7th China Capital Markets Conference to be held on 14 June in Hong Kong
This signature conference of ASIFMA will bring together 400 industry-leading professionals and regulators on China's capital markets, with topics across China macro, fixed income, currencies, equities, asset management and regulatory aspects. Register now given seats are limited!
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