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21 December 2012
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News on the global financial markets

  Morning Bell 

  Industry News 
  • Europe needs banking union to overcome challenges, IMF says
    The International Monetary Fund says a banking union is necessary in Europe in light of challenges, noting that "the present conjuncture makes management of the situation particularly difficult". The IMF also called for stress testing of banks and sharper separation between sovereign and bank risk. Bloomberg (20 Dec.), Reuters (20 Dec.) LinkedInFacebookTwitterEmail this Story
  • European bankers reject separation proposals
    European banks are arguing against proposals from Bank of Finland Governor Erkki Liikanen that would require banks to channel some trading into separately capitalised units. The European Commission had sought comments on the proposals, which bankers widely dismiss, saying "a compelling case for mandatory separation of trading activities has not been made". Bloomberg (20 Dec.) LinkedInFacebookTwitterEmail this Story
  • Editorial: UBS' Libor penalty appears unjust
    UBS' $1.5 billion settlement tied to manipulation of the London Interbank Offered Rate appears out of proportion, at least compared with Barclays' penalty, which was a third as much. On the whole, it is "hard to escape the sense that there's a good deal of ex post facto outrage over Libor, which has become the regulators' surrogate for all that was supposedly wrong in finance before the panic of 2008", according to The Wall Street Journal. The Wall Street Journal (19 Dec.) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • ESMA gets the ball rolling on interoperability guidance
    European clearinghouses can expect interoperability guidance from the European Securities and Markets Authority in the first quarter, based on a recently released consultation paper. ESMA is required by the European Market Infrastructure Regulation to establish rules pertaining to potential links between clearinghouses. Certainty on this front is expected to end a logjam in exchanges' plans. The Trade News (U.K.) (20 Dec.), Reuters (20 Dec.) LinkedInFacebookTwitterEmail this Story
  • EU insurance regulator proceeds on Solvency II
    The European Insurance and Occupational Pensions Authority is working around a logjam among lawmakers to formulate crucial parts of Solvency II risk-capital rules. "EIOPA's guidelines will ensure that important aspects of the new regime will be gradually implemented," Chairman Gabriel Bernardino said. Reuters (20 Dec.) LinkedInFacebookTwitterEmail this Story
  • Bank repayment to ECB appears big market factor for 2013
    Primary markets in the coming year will be heavily influenced by the degree to which European banks repay €1 trillion borrowed from the European Central Bank in December 2011 and February. The Long-Term Refinancing Operations averted a liquidity crisis. "LTRO repayment will be the most important factor in 2013 because banks continuing to delever means that there is limited natural growth for extra funding elsewhere," said Edward Stevenson of BNP Paribas. International Financing Review (free content) (20 Dec.) LinkedInFacebookTwitterEmail this Story
  • US legislators urge CFTC to act on cross-border rules
    US lawmakers have reinforced complaints abroad and called on the Commodity Futures Trading Commission to decide soon how its rules will apply overseas. "We are very concerned that a lack of coordination between both foreign and domestic regulators could soon lead to a disruption of the derivatives markets," 14 members of the House of Representatives wrote in a letter. Meanwhile, regulations for swaps-trading platforms and safety buffers for uncleared swaps remain unwritten. Reuters (20 Dec.), Financial Times (tiered subscription model) (21 Dec.) LinkedInFacebookTwitterEmail this Story
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