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18 October 2012
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News on the global financial markets

  Morning Bell 
  • Solvency II likely will be delayed, EIOPA chairman says
    With an implementation deadline of 1 January 2014 for Solvency II out of the question, a two-year delay is likely, said Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority. In addition, the European Commission asked EIOPA to review whether Solvency II calibrations should be changed to avoid discouraging insurers from investing in long-term assets. (subscription required) (17 Oct.), The Wall Street Journal/Dow Jones Newswires (17 Oct.) LinkedInFacebookTwitterEmail this Story
  Industry News 
  • FX rule exemptions fail to comfort corporate treasurers
    Corporate treasurers are expressing confusion and concern about regulations governing currency hedging, even though not all rules will apply to them, speakers indicated at the FX Week Asia conference. Treasurers are concerned about increased costs for banks because of clearing, reporting and collateralisation requirements. "If, as seems likely, they are going to be facing increased costs, we know what they're going to do -- they're going to pass on those increased costs to their customers," said Damian Glendinning, group treasurer at Lenovo. (subscription required) (17 Oct.) LinkedInFacebookTwitterEmail this Story
  • Study: Euro-zone exit by southern states would spur global recession
    Global gross domestic product would plunge by $22.3 trillion, sending the world into recession, if Greece, Spain, Portugal and Italy were to withdraw from the euro zone, according to a study by a German think tank. Greece's departure would have little impact on the rest of the world, but a chain reaction leading to the others' withdrawal would have devastating consequences, economic researcher Prognos said. Spiegel Online (Germany) (17 Oct.), Reuters (17 Oct.) LinkedInFacebookTwitterEmail this Story
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  Regulatory Roundup 
  • UK financial bill will include Libor recommendations
    Some reforms for calculation of the London Interbank Offered Rate published by the UK Financial Services Authority will be incorporated in a financial bill being formulated, the Treasury said. "The government's changes to legislation will ensure that those that attempt to manipulate Libor face the full force of the law," Financial Secretary Greg Clark said. "But this is just one part of the process; the banks and the British Bankers' Association will have to play their part." Reuters (17 Oct.), Bloomberg (17 Oct.) LinkedInFacebookTwitterEmail this Story
  • Volcker warns UK lawmakers about plans to ring-fence banks
    Paul Volcker, former chairman of the Federal Reserve, told UK lawmakers that proposals to ring-fence retail operations from the investment side of large banks are difficult and likely will fail. "Based on the American experience, the concept that different subsidiaries of a single commercial banking organization can maintain total independence either in practice or in public perception is difficult to sustain," Volcker said in submitted comments. European Central Bank Governing Council member Erkki Liikanen will testify before UK lawmakers Monday. Bloomberg Businessweek (17 Oct.), Bloomberg (17 Oct.), The Wall Street Journal/Deal Journal blog (17 Oct.) LinkedInFacebookTwitterEmail this Story
  • Bank of England's Tucker: "Worst may still be ahead"
    UK banks face regulators' demands that they trim excess reserves while acquiring more capital, and because of that, "the worst may still be ahead", said Paul Tucker, deputy governor of the Bank of England. "Basel I, II, III, IV and V are not calibrated for the kind of end-of-the-world risks that lie within the realms of the possible at the moment," Tucker said. If further assistance is needed, he said, public backlash likely will be severe. Reuters (17 Oct.) LinkedInFacebookTwitterEmail this Story
  Spotlight on China 
  • Analysis: China has trouble energising stock market
    Guo Shuqing, a year in as head of the China Securities Regulatory Commission, has been pressing for reforms of the slumping stock market. However, with the economy in turmoil, the market only keeps falling, according to The Economist. "China's stock markets are certainly in need of reform," the magazine notes. "They have been a meagre source of capital, providing only 3.4% of the finance that companies raised last year." The Economist (13 Oct.), MarketWatch (18 Oct.) 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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Now and then it's good to pause in our pursuit of happiness and just be happy."
--Guillaume Apollinaire,
French writer, poet and critic

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