Cyprus reportedly might consider smaller deposit levy | European transaction tax prompts concerns about collateral | COBA Project stops work on consolidated tape
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21 March 2013
GFMA SmartBrief
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Morning Bell
Banking union is set to launch next year, ECB official says
Ignazio Angeloni of the European Central Bank says the region's banking union should go into effect by mid-2014. Angeloni, director general of the ECB's financial-stability directorate, says national regulators made "gigantic mistakes" before the global financial crisis and that a banking union will help dissolve a "dangerous embrace" between financial institutions and their nations. Risk.net (subscription required) (20 Mar.)
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Industry News
Cyprus reportedly might consider smaller deposit levy
The Cypriot government might return to parliament with a proposed levy on bank deposits that is smaller than the one rejected by lawmakers, to secure a financial rescue from the EU, the European Central Bank and the International Monetary Fund, according to reports. Banks have been ordered by the government to remain closed through next week. Cyprus Mail (20 Mar.), EUObserver (Brussels) (20 Mar.), The Moscow Times (21 Mar.)
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European transaction tax prompts concerns about collateral
The European Commission's proposal to tax financial transactions could raise €35 billion annually, but market participants are concerned the levy would put a squeeze on collateral. "It could drastically reduce the mobility of collateral and drastically increase transformation costs, making collateral more inefficient from a mobility perspective," said Staffan Ahlner of Bank of New York Mellon. "We don't believe it is the intention of the proposal, but it is one of the unintended consequences." International Financing Review (free content) (16 Mar.)
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COBA Project stops work on consolidated tape
The COBA Project, citing a lack of support from entities involved, has halted a 3-month-old effort to administer consolidated-tape data for European equities. "Given the distance that's left between the different positions, we are suspending the project," founder Mark Schaedel said. The European Commission is still considering options to mandate the creation of a consolidated feed when it updates the Markets in Financial Instruments Directive. Bloomberg (19 Mar.), AutomatedTrader.net (20 Mar.), Financial Times (tiered subscription model) (19 Mar.)
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ICE's Sprecher is at ease in the spotlight
IntercontinentalExchange's move to acquire NYSE Euronext has placed a spotlight on one man: Jeff Sprecher. However, the founder, chairman and CEO of ICE doesn't appear to be letting the attention bother him. Sprecher recently sounded off on issues including the interest-rate environment, the importance of US capital markets, Enron and accessing Chinese markets. Regarding exchange mergers and acquisitions, Sprecher says, "M&A has not so much been about trying to get big for scale sake. It's about trying to have enough pieces to solve customer problems." SmartBrief/SmartBlog on Finance (20 Mar.)
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Regulatory Roundup
EU moves forward with limits on bankers' bonuses
EU officials have kept proposed restrictions on bankers' bonuses unchanged as they reached an agreement to overhaul rules governing bank capital and liquidity. "The most comprehensive and most far-reaching banking regulation in the history of the EU is ready for the final vote," European Parliament member Othmar Karas wrote in an e-mail. Bloomberg (20 Mar.)
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BoE receives authority from Osborne to stimulate growth
UK Chancellor George Osborne, in his budget message to Parliament, has given the Bank of England powers to employ "unconventional monetary instruments to support the economy" that go beyond quantitative easing. It is the first modification of the BoE's mandate since the central bank was given independence in 1997. The Telegraph (London) (tiered subscription model) (20 Mar.), The Globe and Mail (Toronto) (tiered subscription model) (20 Mar.), The Independent (London) (tiered subscription model)/The Press Association (U.K.) (20 Mar.)
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ECB official warns against further delay of T2S programme
The European Central Bank says lawmakers need to approve legislation to harmonise settlement systems. Without it, the ECB's TARGET2-Securities will be further delayed, T2S Board Chairman Jean-Michel Godeffroy says. "What is causing some concern is that progress on the issue seems to have come to a halt in the first few months of 2013," Godeffroy said. "If it is not adopted, some part of T2S cannot be implemented." Financial Times (tiered subscription model) (20 Mar.), Central Banking Publications (subscription required) (19 Mar.)
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Commentary: Western rules might hit Asian derivatives markets
Keith Noyes of the International Swaps and Derivatives Association explains how European and US rules could drive foreign players from Asia's derivatives markets. The European Market Infrastructure Regulation and the US Dodd-Frank Act contain measures that could prevent market participants in Europe and the US from dealing with many third-country clearinghouses. The rules could significantly hit liquidity in Asian markets, Noyes writes. Risk.net (subscription required) (20 Mar.)
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Spotlight on China
Chinese regulator pledges to raise standards of securities industry
Xiao Gang, who is succeeding Guo Shuqing as chairman of the China Securities Regulatory Commission, has vowed to continue his predecessor's effort to overhaul the securities industry. Xiao, 54, has been heralded for years as a vital member of China's financial executive team. Xiao, who is fluent in English, has promised to make the stock market more acceptably lawful. China Daily (Beijing) (20 Mar.)
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GFMA News
GFMA webinar: "Global LEI Developments and Deadlines" -- 8am Eastern TODAY
GFMA will host a webinar to help financial-market participants prepare for the critical implementation of a global legal-entity identifier. Recently, there have been important developments from the US Commodity Futures Trading Commission, global regulators and the LEI Regulatory Oversight Committee. Further, important deadlines under the CFTC's reporting and record-keeping rule for swaps are quickly approaching. Participate in this timely webinar to receive expert summary and analysis of the latest regulatory developments and initiatives.
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AFME News
Early-bird registration is open: AFME 6th Annual European Post-Trade Conference
Registration is open for AFME's 6th Annual European Post-Trade Conference, scheduled on 23 May at the Lancaster London hotel. This event brings together eminent speakers from across the industry, including senior operations executives and key regulators, and offers insights into crucial developments in the post-trade space and their impact on the industry.

Register to secure your place.
  • Early-bird member rate (available until 11 April): £299
  • Early-bird nonmember rate: (available until 11 April): £609
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SmartQuote
A community is like a ship; everyone ought to be prepared to take the helm."
-- Henrik Ibsen,
Norwegian playwright
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