Any new approach by the EU on supervision of cross-border central counterparties must be developed with cooperation and support from the Commodity Futures Trading Commission, Chairman J. Christopher Giancarlo says. "I would consider any unilateral change by EU authorities to the CFTC-[European Commission] equivalence agreement to be a violation of trust and cooperation between the US and Europe," Giancarlo said at a conference in Switzerland.
The Basel Committee on Banking Supervision's review of bank capitalization shows lenders are meeting requirements, with capital-ratio increases across the board. Capital positions of European banks reached 13.4% at the end of 2016, compared with 12.8% six months earlier, the European Banking Authority reported.
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The EU and UK have agreed to delay the next round of Brexit talks because its direction could be influenced by a speech British Prime Minister Theresa May is expected to deliver this month, officials said. European Parliament member Guy Verhofstadt has said May is expected to make an "important intervention" in the Brexit talks.
The Z/Yen financial-center index ranks London, followed by New York, Hong Kong and Singapore, as the most attractive financial center in the world, despite the UK's withdrawal from the EU. New York's ranking has dropped significantly, "presumably due to fears over US trade," survey authors say.
Advances in artificial intelligence and robotics mean banks could eliminate 30% of jobs during the next five years, former Citigroup CEO Vikram Pandit says. He also sees "a banking world going from large financial institutions to one that's a little bit more decentralized."
Depository Trust & Clearing Corp. plans to launch a data-pooling utility that it says could cut banks' nonmodelable risk factors that increase capital requirements under the Basel Committee on Banking Supervision's Fundamental Review of the Trading Book. "Given our position as one of the largest post-trade infrastructures in the world, we have a significant source of data flows that can be brought to bear to address the NMRF requirement," says Dan Magarino of DTCC DataPro, a data-management service.
The Financial Stability Board's comprehensive global review of the regulatory framework has raised concerns among experts that it might give national regulators an opportunity to further domestic agendas, the opposite of the FSB's aim to increase cohesion and uniformity. However, the first stage of the review, to examine the effect of regulation on derivatives clearing, has been broadly welcomed.
European Commission President Jean-Claude Juncker focused on the future of the EU, rather than Brexit, during the State of the EU address. Juncker proposed reform of the eurozone's governance, as well as an 18-month plan for better alignment of EU countries leading up to Brexit in March 2019.
The European Securities and Markets Authority warned that current market and credit risks were exceptionally high, which could cause a bubble and widespread volatility. It said ultra-low interest rates and political uncertainties such as ongoing Brexit negotiations were contributing factors.
US markets have benefited from clarity provided by the Dodd-Frank Act, compared with uncertainty surrounding Europe's revised Markets in Financial Instruments Directive, CME Group CEO Terrence Duffy says. Duffy expects the Trump administration to loosen Dodd-Frank but says a full repeal is unlikely.
The Basel Committee is finalizing Basel III reforms amid disagreements concerning the level of the floor and its impact. The US is looking to reassess the timing and calibration of key elements of capital reforms, while Europe is moving on with proposed implementation that diverges from Basel. With all this uncertainty, these conferences will provide attendees with an overview of the final rules and how they are likely to affect the US, Europe and global derivatives markets. REGISTER: Finalization of the Basel Capital Rules: Overview & Implications in London on Oct. 3 and New York on Nov. 16