| News on the global financial markets |  |
| Morning Bell |  |  |
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- German ring fence could force changes at several banks
A proposed ring-fencing law in Germany, which goes to the Cabinet for approval Wednesday, could force as many as 12 banks to change operations, a source says. The law would force banks to make changes if more than a fifth of their business or more than €100 billion in income comes from risky activity. The legislation would take effect after implementation of capital rules by the Basel Committee on Banking Supervision. The Wall Street Journal/Dow Jones Newswires
(04 Feb.)      
| Industry News | | |
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- BIS: Buffers are more important than activity separation
Jaime Caruana, general manager of the Bank for International Settlements, says "higher capital and liquidity requirements are more important for stabilising banks than the separation of proprietary trading and deposit-taking business". He also says the euro-zone crisis might not be over, despite a positive outlook. Reuters
(04 Feb.)
- SGX reportedly joins LSE in LCH.Clearnet stake talks
Singapore Exchange has joined discussions started by London Stock Exchange Group to purchase a stake in LCH.Clearnet Group, sources say. SGX declined to comment on the subject. "As the Asian Gateway, SGX is open to partnerships and alliances for the benefit of shareholders, the company and our customers," spokeswoman Carolyn Lim wrote in an e-mail. "However, we do not comment on media reports or speculation." Bloomberg
(04 Feb.), Reuters
(04 Feb.), Financial Times (tiered subscription model)
(05 Feb.)
| Regulatory Roundup | | |
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- EU moves to open bond and stock settlement to competition
The European Parliament Economic and Monetary Affairs Committee approved a draft law that would, under certain conditions, open the settlement of bond and share trades to competition. The proposal aims to improve the system and reduce trading costs. Reuters
(04 Feb.)
- FSB's call for FX derivatives margin confuses industry
The Financial Stability Board has called for the Basel Committee on Banking Supervision and the Committee on Payment and Settlement Systems to focus on foreign exchange derivatives and "set out strong provisions on variation margin". The request seems to stand in opposition to the Working Group on Margining Requirements, which has delayed issuing guidelines, partly because of questions about whether they would be appropriate for forex swaps. The working group is run by the Basel Committee and the International Organisation of Securities Commissions. Risk.net (subscription required)
(04 Feb.)
- Experts: European transaction tax could push business elsewhere
The Eurobond originated 50 years ago, when the US instituted a tax to make it more expensive to invest in foreign equities. The Eurobond market became a viable alternative and has become the largest fixed-income market for corporate debt. Analysts see Europe's proposed financial-transaction tax as having the same effect. "If you can transact without transaction costs, you will," said Jim Kean of Bayesic Asset Management. "There'll be a market in Singapore or somewhere else." Bloomberg
(03 Feb.)
| Spotlight on China | | |
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| AFME News | | |
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- IOSCO Secretary General David Wright and ECB Executive Board member Peter Praet will deliver keynote speeches at AFME's 2013 European Market Liquidity Conference
The European Market Liquidity Conference is a high-profile, unique event on the European trading community's calendar that attracts 400-plus delegates from the buy and sell sides, fixed income and foreign exchange. The conference is scheduled on 13 February at Grange St Paul's Hotel in London. The content is designed and driven by market participants and therefore ensures that debates consist of genuine, in-depth discussion led by experienced, senior speakers.
The conference programme will explore key topics on funding economic growth; structural changes of fixed income, currencies and commodities; and the impact of regulation on liquidity. Peter Praet, a member of the European Central Bank Executive Board, and David Wright, secretary general of the International Organisation of Securities Commissions, have confirmed that they will deliver keynote speeches at the conference.
View the full programme and register.
- AFME inaugural flagship conference is announced: "Financing Growth"
AFME is pleased to announce its inaugural flagship conference, "Financing Growth: What the new world of regulation means for banks, capital markets and their users", scheduled on 24 September in London. The invitation-only conference will bring together as many as 500 senior decision-makers from Europe's financial industry, along with regulators and politicians, to discuss what needs to be done to enable capital markets to support growth and investment. Further details will be announced in February, including VIP speakers and the historic conference venue.
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