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28 February 2013
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News on the global financial markets

  Morning Bell 
  • German parliamentary panel passes HFT legislation
    A parliamentary committee in Germany has approved a bill that would require firms that use high-frequency trading to register with regulators. "We have passed important legislation on high-frequency trading, closing a gap in a previously unregulated area of the financial market," committee member Ralph Brinkhaus wrote in an e-mail. "This brings us another step closer to fulfilling our goal from the coalition agreement to leave no financial product, no financial actor, and no financial market unregulated." Bloomberg Businessweek (27 Feb.) LinkedInFacebookTwitterEmail this Story
  Industry News 
  • OECD encourages investors to scrutinise sovereign ratings
    The Organisation for Economic Cooperation and Development says investors should take a close look at sovereign credit ratings. "Since the track-record of 'sovereign-risk pricing' is not very impressive, suggested market measures of this risk (including ratings) should be treated with great caution," according to an OECD report. "Downgrades and their implications for the supply of 'safe sovereign assets' should not be taken at face value but more carefully scrutinized." Bloomberg (27 Feb.) LinkedInFacebookTwitterEmail this Story
  • Draghi cautions governments about ECB limits
    Mario Draghi, president of the European Central Bank, has again highlighted limits of the ECB's powers. "It is important to stress that the ECB's mandate only extends so far," he said. "There are clear limits to what monetary policy can and should aim to achieve. We cannot repair unsound budgets. We cannot clean up struggling banks. We cannot solve deep-rooted problems in the structure of Europe's economies." Bloomberg (27 Feb.) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • Libor manipulation was impossible to notice, Turner says
    UK Financial Services Authority Chairman Adair Turner told a parliamentary commission that manipulation of the London Interbank Offered Rate was impossible to detect. "We could not have got at it by intensive supervision," he said. "You just cannot have a police force big enough to spot all these problems." Reuters (27 Feb.) LinkedInFacebookTwitterEmail this Story
  • New UK banks will see relaxed capital requirements
    The UK Financial Services Authority aims to remove barriers for new banks by letting them hold less capital compared with established rivals. Chairman Adair Turner told a parliamentary commission that the FSA will publish details about the policy in coming weeks. "The biggest change we are making is on the prudential side," Turner said, in reference to capital requirements. Reuters (27 Feb.) LinkedInFacebookTwitterEmail this Story
  • UK temporarily prohibits short sales of 4 Italian stocks
    The UK Financial Services Authority has banned short selling of four Italian bank stocks. Uncertainty about Italy's political future has roiled markets in recent days. However, some market participants question the effect of such bans. "Short selling allows proper price discovery and is part and parcel of an efficient capital market," said David Lewis of SunGard Astec Analytics. Reuters (27 Feb.) LinkedInFacebookTwitterEmail this Story
  Spotlight on China 
He that will not apply new remedies must expect new evils; for time is the greatest innovator."
--Francis Bacon,
British author and statesman

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