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31 January 2013
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News on the global financial markets

  Morning Bell 
  • Europe's transaction tax prompts concerns
    As the full scope of Europe's proposed tax on financial transactions becomes public, experts are voicing concern that its wide reach will stunt growth. "If you tax the nominal value of derivatives, flow will migrate elsewhere as these contracts can be traded globally," said Diego Valiante of the European Capital Markets Institute. That could lower volume and make European markets less competitive, experts say. The Trade News (U.K.) (30 Jan.) LinkedInFacebookTwitterEmail this Story
  Industry News 
  • ECB survey finds tightening credit conditions
    Euro-zone banks demanded higher standards from borrowers in the fourth quarter, according to a survey by the European Central Bank. The ECB expects credit conditions to tighten further this quarter as banks deal with decreased demand for loans. Bloomberg (30 Jan.) LinkedInFacebookTwitterEmail this Story
  • Foreign investors bought more gilts than they sold in December
    Overseas investors are indicating that they aren't overly concerned about Britain's economic challenges or its government as they continue to purchase UK government bonds. "I think what surprises people is that the weakness of the currency doesn't seem to be filtering through into a massive loss of confidence in gilts," said Malika Gulabani of F&C Investments. The Wall Street Journal (30 Jan.) LinkedInFacebookTwitterEmail this Story
  • Japanese market for rate swaps is first and formidable
    Japan has quickly instituted central clearing of interest-rate swaps and says trading volume is surging. The country handles only 7% of the global market for rate swaps, but it is the largest market for such derivatives in Asia-Pacific, with $36 trillion in notional value outstanding at the end of June. Futures Industry (24 Jan.) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • ESRB cuts macroprudential tools down to 15
    The European Systemic Risk Board has narrowed a list of macroprudential tools to 15. At the end of 2011, the ESRB had 42 potential responses. All EU members are constrained to those 15 tools, although non-euro-zone nations might have more leeway because there is less direct oversight of their actions. One tool is the countercyclical capital buffer, which is part of Basel III rules and lets regulators increase capital requirements. (subscription required) (30 Jan.) LinkedInFacebookTwitterEmail this Story
  • CEOs of French banks defend proprietary trading
    The CEOs of BNP Paribas, Societe Generale and Credit Agricole have defended proprietary trading to a parliamentary committee. France is considering legislation that would force banks to separate out proprietary trading from trades made on behalf of clients. Although the draft law isn't as strict as Europe's proposed ring fence, the CEOs say it would still put French banks at a disadvantage internationally. Reuters (30 Jan.) LinkedInFacebookTwitterEmail this Story
  • EU parliamentary panel might reject OTC derivatives rules
    The European Parliament's Economic and Monetary Affairs Committee is leaning toward rejecting draft rules for over-the-counter derivatives, according to Parliament's website. The panel is concerned that the rules would force nonfinancial companies to pass trades through central counterparties, even though the value of such transactions is comparatively insignificant. Bloomberg Businessweek (30 Jan.) LinkedInFacebookTwitterEmail this Story
  • Germany's Weidmann warns against broad debt guarantees
    Jens Weidmann, a member of the European Central Bank Governing Council and head of Germany's Bundesbank, says euro-zone countries might be forced to pay one another's debt even without a formal agreement if the ECB continues existing policy. "The collective risks from ... financial aid and central bank special measures have reached substantial heights," he said. Reuters (30 Jan.) LinkedInFacebookTwitterEmail this Story
  Spotlight on China 
  • Chinese banks face another surge in capital demand
    About 7 trillion yuan worth of projects approved by China's National Development and Reform Commission in the past few months are expected to put banks' lending capacity to the test this year. The investment push comes as loan-deposit and capital-adequacy ratios are already marginally within regulatory standards. Caijing Magazine online (29 Jan.) LinkedInFacebookTwitterEmail this Story
  AFME News 
  • 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. LinkedInFacebookTwitterEmail this Story
  • 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. LinkedInFacebookTwitterEmail this Story
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We have more ability than willpower, and it is often an excuse to ourselves that we imagine that things are impossible."
--Fran├žois de la Rochefoucauld,
French writer

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