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March 8, 2013
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News on the capital markets, securities and financial industry

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  Industry News 
  • Barclays notes ways sequestration might affect BABs
    Barclays recently issued a research report saying that if sequestration reduces Build America Bond subsidy payments and subsequently triggers an extraordinary redemption provision, the situation could prompt BAB issuers to call their bonds. The report also says, however, that the subsidy payment reduction wouldn't trigger most ERPs. "Our reading of the various provisions leads us to conclude that once the conditions that trigger the ERP are met, the situation exists for the remaining life of the bonds," according to the report. "However, there are several reasons why we think there is a limited risk in this regard." The Bond Buyer (free content) (3/7) LinkedInFacebookTwitterEmail this Story
  • Banks aim to capitalize on new derivative-clearing rules
    Banks are prepared for their gatekeeper role when some derivatives trading clearing becomes mandatory Monday. Many big banks have invested in trading platforms built to help clients handle the new regulations. JPMorgan Chase predicts it will bring in as much as $500 million over the next two to three years from derivatives clearing and related services. Reuters (3/7) LinkedInFacebookTwitterEmail this Story
  • EU benchmark-rate inquiries at "advanced stage," official says
    Eric van Ginderachter, director of cartels at the European Commission, says the commission's investigations into alleged manipulation of benchmark interest rates, such as the London Interbank Offered Rate, are "at an advanced stage." The commission hasn't taken action against banks, brokers or others suspected of manipulation. Bloomberg (3/7), Reuters (3/7) LinkedInFacebookTwitterEmail this Story
  Washington Roundup 
  • House Republicans question SEC resource allocation
    Four leading Republican members of the House of Representatives questioned why the Securities and Exchange Commission had yet to implement the Jumpstart Our Business Startups Act, and were instead using limited resources to pursue a regulation forcing corporations to disclose political spending. The Hill/RegWatch blog (3/7) LinkedInFacebookTwitterEmail this Story
  • OCC's Pasch voices concerns about banks' capital models
    Ron Pasch, an official at the Office of the Comptroller of the Currency, says regulation of financial institutions should be adjusted to ensure greater consistency in capital models. "What you hope -- when you ask banks to run the same trades through their models -- is that you get similar results, and that was really about trying to ensure we have consistency in the application of the Basel standards," said Pasch, a member of the standards-implementation group at the Basel Committee on Banking Supervision. "What we found, though, was that even when we have the same portfolio running through various models, there were a range of outcomes. And the range was significant." (subscription required) (3/7) LinkedInFacebookTwitterEmail this Story
  • Analysis: Fed's "stress test" may understate derivative exposure
    Federal Reserve "stress tests" of the nation's banks highlight the problems with the more lenient U.S. method of derivatives accounting which might make banks look stronger than they would under the corresponding European method. European derivatives accounting does not let banks net out the contracts owed to each other while the U.S. does. The U.S. method may disguise the true state of banks' exposure to derivatives, and their overall balance sheet health, some analysts say. CNNMoney/Fortune/Term Sheet blog (3/7) LinkedInFacebookTwitterEmail this Story
  Operations Update 
  • SEC proposes rules aimed at trading platforms
    The Securities and Exchange Commission has been working for more than a year on rules intended to ensure trading platforms are better prepared to handle technology glitches, hurricanes and other issues that might cause market disruptions. On Thursday, the SEC proposed rules that would require certain exchanges, clearing agencies and alternative trading systems to develop procedures to ensure security, resilience, integrity and capacity. Reuters (3/7), The Wall Street Journal (3/7) LinkedInFacebookTwitterEmail this Story
  Asset/Wealth Management Report 
  SIFMA News 
  • SII Society Education Series goes to Minneapolis -- John Taft on Stewardship -- March 27
    Securities Industry Institute® alumni, Society members, students and prospects are all invited to attend the kick off reception of the SII Society Minneapolis Chapter with a special reception featuring John Taft, CEO of RBC Wealth Management (U.S.) and former SIFMA Chairperson, on the key principle from his book, "Stewardship: Lessons Learned from the Lost Culture of Wall Street." Mr. Taft will discuss his views on stewardship -- "serving others" -- as a core principle for the financial services industry, the global financial system and society at large. Join SIFMA's Professional Societies today. LinkedInFacebookTwitterEmail this Story
  • Program now available: SIFMA Tech 2013 -- June 18-19 -- NYC
    Check out the program for Tech 2013! For 30 years, SIFMA Tech has brought together several thousand financial services firms, industry leaders, regulators and solution providers for critical updates and expert outlooks on every issue that faces the financial services technologist today. Harness technological solutions to achieve an infrastructure that keeps you and your firm on the cutting-edge and see how products from solution providers stack up against your in-house expertise. Check out the new, official SIFMA Tech website for details on this year's offering and take advantage of early-bird rates. LinkedInFacebookTwitterEmail this Story
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Hope never abandons you, you abandon it."
--George Weinberg,
American psychologist, writer and activist

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