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27 February 2013
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  • Regulators want public feedback on benchmark rates
    The Commodity Futures Trading Commission says it will seek more public input on how to repair financial benchmarks, such as the London Interbank Offered Rate, before releasing a report in late spring or summer. "What we're collectively looking at is how to enhance the rules around conflicts of interest, governance, submitters, administrators," Chairman Gary Gensler said. Meanwhile, regulators aim to settle with some banks regarding Libor manipulation by the end of summer, sources say. Reuters (26 Feb.), Bloomberg Businessweek (26 Feb.), The Wall Street Journal (27 Feb.) LinkedInFacebookTwitterEmail this Story
  • Request for proposals for consolidated audit trail is released
    A request for proposals for a national market system was formally published Tuesday. The system is intended to create a consolidated audit trail of all market activity -- about 50 billion records. U.S. options and equities exchanges helped shape the proposal request. The hope is that the system will help the Securities and Exchange Commission oversee markets on a next-day basis. Securities Technology Monitor (26 Feb.) LinkedInFacebookTwitterEmail this Story
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  • Most Asian-Pacific markets rise after Bernanke's testimony
    Most Asian-Pacific markets rose Wednesday after Federal Reserve Chairman Ben Bernanke defended the central bank's stimulus efforts in testimony before the U.S. Senate banking committee. Hong Kong's Hang Seng Index moved up 0.3%. China's Shanghai Composite advanced 0.9%. South Korea's Kospi and Taiwan's Taiex each edged up 0.2%. Australia's S&P/ASX 200 gained 0.7%. India's Sensex was up 0.7%. Japan's Nikkei 225 bucked the trend, falling 1.3%. MarketWatch (27 Feb.), The Economic Times (India) (05 Mar.) LinkedInFacebookTwitterEmail this Story
  • Cheaper rates draw Russian banks to yuan bond market
    Russian banks are diversifying sources of capital and saving on interest expenses by going into the offshore yuan bond market. Bond buyers have a strong appetite for such bonds because they offer exposure to China's currency, deliver attractive yields and are issued by prominent banks that have backing from the Russian government. The Wall Street Journal (26 Feb.) LinkedInFacebookTwitterEmail this Story
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  Economics 
  • Fed will stick with bond-buying program, Bernanke says
    The Federal Reserve plans to continue buying bonds at its current pace, Chairman Ben Bernanke said in testimony to the U.S. Senate banking committee. The Fed's stimulus efforts aren't creating asset bubbles or raising the risk of inflation, he said. "We do not see the potential costs of the increased risk taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery," Bernanke said. Bloomberg (27 Feb.) LinkedInFacebookTwitterEmail this Story
  • Chinese agency calls for monetary tightening
    The research arm of China's most powerful economic planning agency said excess credit and liquidity are putting its economy at risk. In a report published in the official China Securities Journal, the State Information Center, a research arm of the National Development and Reform Commission, said the government should withdraw cash from the banking system to reduce liquidity and regulators should intensify oversight of banks' off-balance-sheet operations. Bloomberg (27 Feb.) LinkedInFacebookTwitterEmail this Story
  • BoE weighs negative rate to boost small-business lending
    The Bank of England is considering a special negative interest rate for transactions between the central bank and commercial banks to encourage small-business lending. Deputy Governor Paul Tucker told Parliament's Treasury Select Committee that he is ready to try extraordinary measures to increase bank lending to small and midsize companies. The Guardian (London) (26 Feb.) LinkedInFacebookTwitterEmail this Story
  • Survey: Sources of adviser compensation increase
    Charging a percentage of assets under management is still the most common form of compensation for registered investment advisers, but advisers are finding additional sources of revenue, according a survey by consultancy RIA in a Box. The survey found that 10% of advisers get performance-based fees, 43% charge fixed fees and 55% bill by the hour. Financial-Planning.com (26 Feb.) LinkedInFacebookTwitterEmail this Story
  Geopolitical/Regulatory 
  • European transaction tax could have worldwide effect
    Europe's proposed financial-transaction tax could affect investors worldwide. The levy would apply to a wide range of activities, including stock and bond purchases and many transactions with banks. Eleven nations, including Germany and France, have agreed to the tax. The Washington Post (26 Feb.) LinkedInFacebookTwitterEmail this Story
  • EBA expresses concern about risk-calculation variation
    The European Banking Authority has warned banks that the manner in which they calculate risk on their balance sheet might need to change. Interim results of an examination of 89 banks show large differences in risk calculation stemming from varying regulatory approaches and financial modeling. "Greater disclosure could go some way to appease the concerns raised by investors and market analysts," EBA Chairman Andrea Enria said. Reuters (26 Feb.), Bloomberg (26 Feb.), Financial Times (tiered subscription model) (26 Feb.) LinkedInFacebookTwitterEmail this Story
  • SEC seeks input on credit rating reform
    The Securities and Exchange Commission plans to hold a round table in May to discuss possible reform of credit rating agencies. The SEC is looking for options to address conflicts of interest that might be caused by the issuer-pay model. MarketWatch/The Tell blog (26 Feb.) LinkedInFacebookTwitterEmail this Story
  • Analysis: State-sponsored hackers deny China respect abroad
    China cannot expect to be trusted by trading partners unless new leader Xi Jinping, who has advocated reform and respect for law, takes a different approach to hacking, according to The Economist. "Though it goes against every instinct of the secretive Communist Party, Mr Xi could acknowledge that cybercrime emanates from state-sponsored entities and that his government will now rein them in," the magazine notes. The Economist (tiered subscription model) (23 Feb.) LinkedInFacebookTwitterEmail this Story
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