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- Focus on interest rates marks monumental change for ECB
Since Mario Draghi became president of the European Central Bank, it has changed its approach to dealing with the eurozone's problems out of a realization that investors are influenced by fears the eurozone might break up. The ECB is ready to spend any amount of money to bring down interest rates and stabilize the region's economies, a role it previously resisted. The Washington Post
(22 Oct.)     
- EU court will hear legal challenge to eurozone bailout fund
The EU Court of Justice in Luxembourg will hear a challenge to the legality of the eurozone's $652 billion bailout fund. Thomas Pringle, an independent member of the Irish parliament, brought the challenge arguing that the European Stability Mechanism violates a provision of EU law that bars bailouts. Bloomberg
(23 Oct.)
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- 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.)
- 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.)
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- Consumers are unfazed by "fiscal cliff" talk, data show
American consumers are generally aware of the debate about the "fiscal cliff" awaiting the U.S. economy at year-end, but they aren't worried enough to scale back holiday spending plans, according to data from the National Retail Federation. The group predicts that sales over the holiday shopping season will jump 4.1%, its most optimistic forecast since the recession. The Washington Post/Wonkblog
(22 Oct.)
- Financial advisers aren't getting many client referrals
Financial advisers get 66% of clients through referrals, but most advisers are having little success persuading clients to recommend them to others. About 83% of clients say they have no reservations about recommending their adviser to family and friends, but only 4% follow through and make a referral, said Gabriel Garcia, a director at Pershing Advisor Solutions. InvestmentNews (free registration)
(21 Oct.)
 | Profiting from Monetary Policy
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- Regulators struggle to agree on details of Volcker rule
The Securities and Exchange Commission is clashing with other regulators in crafting the Volcker rule, raising doubt that the rule will be finalized by year-end. The situation also raises concern that the agencies will issue conflicting standards. The dispute centers on how to define market making and banks' ability to invest in hedge funds and other investment vehicles, sources said. The Wall Street Journal
(22 Oct.)
- EU explains rejection of NYSE-Deutsche Boerse merger
Derivatives traded over the counter are separate from, "rather than substitutable" for, those traded on exchanges, the EU's antitrust agency said in February when it blocked a merger of Deutsche Boerse and NYSE Euronext. The exchanges had argued that the two are competing products, but the regulator rejected that, saying customers probably would have faced higher fees and less innovation under the merger. Bloomberg
(22 Oct.)
- 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.)
- U.K. insurers get more time for Solvency II compliance
The U.K. Financial Services Authority postponed from late 2013 to Dec. 31, 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.)
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