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14 December 2012
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News on the global financial markets

  Morning Bell 
  • Europe's banking-union deal provides relief to London
    European finance ministers hammered out a deal on a banking union that removes an immediate threat to London's financial centre. The deal gives oversight authority to the European Central Bank, but it includes crucial concessions that protect London's status as a global financial hub. AFME's Andrew Gowers called the accord a "big step forward" that will improve the single market for financial services. "We think the safeguards [for nonparticipating countries] are adequate," Gowers said. "We wanted to see a fair and balanced way of reaching decisions, particularly on the European Banking Authority ... We think this does that." Reuters (13 Dec.), Financial Times (tiered subscription model) (13 Dec.) LinkedInFacebookTwitterEmail this Story
  Industry News 
  • PIMCO is sceptical about French bonds
    Risks facing the French economy next year are not adequately reflected in government-bond prices, and yields compared with Italian bonds are likely to narrow, said Miles Bradshaw, a portfolio manager at the London office of Pacific Investment Management. "We are not positive on French valuations given the current risks and the relative value of other assets," Bradshaw said. The Wall Street Journal/Dow Jones Newswires (13 Dec.) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • EU makes progress on Basel III specifics
    Another meeting is set for next week after EU officials made significant progress on stronger capital rules for banks. "We are on the cusp of an agreement," said Othmar Karas, an Austrian lawmaker shepherding the initiative through the European Parliament. Preliminary accord has been reached on implementation in January 2014 and on limiting bankers' bonuses. Reuters (13 Dec.) LinkedInFacebookTwitterEmail this Story
  • Italy postpones financial-transaction tax
    Italy has tweaked its financial-transaction tax, delaying implementation to March. Stock transactions will be taxed at 0.12%, then 0.1% starting in 2014. Derivatives taxation has been postponed to July, with the rate still unset. Reuters (13 Dec.) LinkedInFacebookTwitterEmail this Story
  • UK regulator will watch for signs of reckless lending
    Bouts of risky lending will be a high priority for the UK Prudential Regulatory Authority when it takes over from the Financial Services Authority in April. "If there's a spree of lending which looks like it's being done to people or companies that we doubt could repay that lending, we'd aim to stop that before it happens," said the FSA's Andrew Bailey, who will lead the new regulator. Bloomberg (13 Dec.) LinkedInFacebookTwitterEmail this Story
  • US market players keep eye on foreign commission bans
    While the push for a fiduciary standard in the US drags on, other countries, namely Australia and the UK, are banning commission paid by product providers to sellers. Although such a restriction isn't truly on the table in the US, investor advocates are watching how the curb plays out overseas. The Wall Street Journal (13 Dec.) LinkedInFacebookTwitterEmail this Story
  • UBS reportedly faces $1B fine in Libor case
    More than doubling a fine paid by Barclays for possible manipulation of the London Interbank Offered Rate, UBS might be forced to pay $1 billion, a source said. The penalty, which could be handed down next week, would come after the first individual arrests in the UK and as transcripts reveal the extent and gravity of manipulation by banks. Reuters (13 Dec.), Bloomberg (13 Dec.) LinkedInFacebookTwitterEmail this Story
  Spotlight on China 
  • China might ease RQFII 80% bond minimum
    A Chinese rule stipulating that Renminbi Qualified Foreign Institutional Investor funds invest 80% in bonds might soon be dropped or eased. "Our delegates would like to see some flexibility in this split so that investors will have more choices," Norman Chan, head of the Hong Kong Monetary Authority, said after meeting with Guo Shuqing, chairman of the China Securities Regulatory Commission. Bloomberg (13 Dec.) LinkedInFacebookTwitterEmail this Story
The best preparation for tomorrow is to do today's work superbly well."
--William Osler,
Canadian physician

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