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23 October 2012
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News on the global financial markets

  Morning Bell 
  • UK insurers get more time for Solvency II compliance
    The UK Financial Services Authority postponed from late 2013 to 31 December 2015 the deadline for insurers to submit models to comply with Solvency II capital requirements. While European insurers don't want uncertainty regarding capital rules, they would rather have the delay than have requirements pushed through, only to be amended later. Reuters (22 Oct.) LinkedInFacebookTwitterEmail this Story
  Industry News 
  • Hedge funds step up purchases of Greek government debt
    Distressed-debt investors, particularly hedge funds, are making major purchases of Greek debt, a process that started shortly after the nation's debt restructuring in March. A Greek government bond maturing in 2023 yielded 16.53% on Monday, 3 percentage points less than the yield at the beginning of the month. The Wall Street Journal (22 Oct.) LinkedInFacebookTwitterEmail this Story
  • More gains likely are in store for Spanish and Italian bonds
    Foreign investors' newly recovered appetite for riskier products and bondholders' desire to reinvest cash returned by governments might further lift Spanish and Italian bonds, which are already buoyed by the European Central Bank's debt-purchase commitment. In Spain's case, "forward reinvestment plays of this payout will begin in the second half of this week and continue into early next week, which is supportive for Spain to the extent that a bulk of the reinvestment is back into its own product", said Padhraic Garvey of ING. The Wall Street Journal/The Euro Crisis blog (22 Oct.) LinkedInFacebookTwitterEmail this Story
  • Analysis: Europe's bank-funding market reopens
    After a worrying dry spell, European banks again have access to the bank-funding market, and terms they are getting are encouraging for the financial sector, according to The Economist. "Banks' funding costs have fallen below those of investment-grade European corporations for the first time in three years," the magazine notes. The Economist (20 Oct.) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • Bank-resolution agency is on European Commission's 2013 agenda
    Banks, not taxpayers, would be responsible for cleaning up financial calamities under a proposal for a joint agency geared to that purpose, EU Internal Market Commissioner Michel Barnier said. An agreement on common banking supervision in the euro zone is expected by year-end, Barnier said, with that, "we need at the end a European authority for resolution that has to have certain legal responsibility because resolution is a different matter than supervision". Reuters (22 Oct.), Bloomberg Businessweek (22 Oct.) LinkedInFacebookTwitterEmail this Story
  • Italy's transaction tax is expected to reduce trading
    Italy's financial-transaction tax, set to be implemented in 2013, could drive down share-trading volume by 30%. Trading in derivatives could plunge even further, by as much as 80%. One type of transaction being spared the 0.05% tax is the issuance of shares. Reuters (22 Oct.) LinkedInFacebookTwitterEmail this Story
  • Debt cancellation might be an option for central banks
    Debt cancellation has entered the picture as a possible option for central banks that have acquired mountains of government debt during the past few years. "The initial argument is seductive; the government and the central bank both belong to the public sector, so simple consolidation would net out the debt without any loss to the private sector," said Michala Marcussen, global head of economics at Societe Generale. However, Marcussen said there could be issues. MarketWatch/The Tell blog (22 Oct.) LinkedInFacebookTwitterEmail this Story
  • 2 banks decline to register with US for swaps business
    Objecting to a Dodd-Frank Act measure that requires foreign banks to register with US regulators if they trade swaps with US banks or for US clients, two banks -- one in Sweden and one in Singapore -- said they won't register. The regulation can be skirted by moving business outside the US, but this would diminish the ability of US banks to trade for customers in the long run, some executives said. The Wall Street Journal (22 Oct.) LinkedInFacebookTwitterEmail this Story
  • Other News
  GFMA News 
  • Joint SIFMA/ISDA/FIA member call: CFTC no-action letters, FAQs and Q-and-A's -- noon Eastern on Thursday
    As the compliance date for several of the Commodity Futures Trading Commission's Title VII rule makings approached on 12 October, the CFTC released a flurry of no-action letters, frequently asked questions and question-and-answer sessions to provide much-needed relief to market participants. These releases covered several rule-making categories, including which swaps to include in de minimis threshold calculations for swaps dealers and major swaps participants, cross-border scope, securitisations, foreign exchange forwards and swaps, and commodity pools and eligible contract participants. SIFMA, the International Swaps and Derivatives Association and the Futures Industry Association will hold a joint member briefing at noon Eastern on Thursday to discuss what relief was provided, whether it goes far enough and what more can be expected. Registration for this call is required. A dial-in number will be provided upon registration. This call is closed to the media and nonmembers. To check your firm's membership status, see these directories: SIFMA full members, SIFMA associate members, ISDA members and FIA members. Or contact SIFMA's Office of Member Engagement at (212) 313-1152 or LinkedInFacebookTwitterEmail this Story
  AFME News 
  • Peter Spiegel, Brussels bureau chief for Financial Times, is confirmed as closing keynote speaker at AFME 7th Annual European Government Bond Conference -- 8 and 9 November in Brussels
    The European Government Bond Conference is the ONLY conference of its type, bringing together annually the whole community from the European sovereign-debt market. Participants include key senior representatives from all EU treasuries, central banks, regulators, investors and heads of government-bond trading at pan-European and US banks. Renowned for featuring high-profile speakers and a "by the industry for the industry" programme, the conference is a must-attend event for stakeholders in the government-bond market. Featuring interactive round tables to create informative and frank debate, the conference is an unrivalled opportunity to gather valuable information about what the market really thinks.

    Key topics to be discussed:
    • The Future of the Eurozone
    • Liquidity Provisions: The Market Maker Model Under Fire?
    • Credit Risk: Analysing and Hedging Sovereign Risk
    • Investor Trends: Developments in Liquidity and Portfolio Management
    • Past and Future of Eurozone Common Funding

    View the full programme and register. LinkedInFacebookTwitterEmail this Story
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  ASIFMA News 
Too often man handles life as he does the bad weather, He whiles away the time as he waits for it to stop."
--Alfred Polgar,
Austrian journalist

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