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25 October 2012
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News on the global financial markets

  Morning Bell 
  • Basel official defends regulatory complexity as necessity
    Complexity is a necessary part of Basel III banking rules, which cannot be reduced to a simple formula and must not be discarded, said Wayne Byres, secretary general of the Basel Committee on Bank Supervision. He also said debt limits shouldn't be regarded as a panacea. "Despite its apparent simplicity, an internationally comparable leverage ratio is anything but simple to design," Byres said. Financial Times (tiered subscription model) (24 Oct.), Reuters (24 Oct.), Bloomberg (24 Oct.) LinkedInFacebookTwitterEmail this Story
  Industry News 
  • ESMA decision puts higher burden on smaller firms, poll says
    The European Securities and Markets Authority's abandonment of a proposal for an indirect clearing service for smaller companies that would have been offered by all members of a clearing counterparty will make it harder for such firms to clear over-the-counter derivatives, according to a poll of readers. "Following the feedback received during the consultation, we have now dropped [the proposal]," said Fabrizio Planta, rapporteur to ESMA's post-trade standing committee. "But we also know the potential consequences of dropping that requirement, in terms of access, so we will need to monitor this closely." (subscription required) (24 Oct.) LinkedInFacebookTwitterEmail this Story
  • Barclays hearing might prove crucial for future Libor cases
    In a preliminary hearing, Barclays will face a claim for damages from a care-home operator that alleges mis-selling of swaps by the bank because of manipulation of the London Interbank Offered Rate. Thousands of small UK companies think they were mis-sold swaps, and a ruling against Barclays could open the floodgates. Monday's hearing will determine whether the allegation has enough merit to go to trial. Reuters (24 Oct.) LinkedInFacebookTwitterEmail this Story
  • ASX opposes multiple clearinghouses
    Australia's market structure might be at risk if the Australian Securities and Investments Commission decides to create a competitive environment with multiple clearinghouses, ASX said. In its reasoning, the exchange operator used the same national-interest language that Treasurer Wayne Swan used last year when he blocked a merger of ASX and Singapore Exchange. The Trade News (U.K.) (24 Oct.) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • Solvency II shortcomings must be addressed, AXA CFO says
    Economic catastrophe might occur if shortcomings in Solvency II aren't addressed, said Gerald Harlin, group chief financial officer at AXA. "In particular, when you think about the countercyclical tools in Solvency II, this regulation could be dangerous for the whole economy," Harlin said. (subscription required) (24 Oct.) LinkedInFacebookTwitterEmail this Story
  • Bank of England is ready to step in again, but not forever
    Bank of England Governor Mervyn King said the central bank is prepared to pump more money into the economy, though he noted that the BoE cannot forever postpone economic adjustments needed to deal with massive debt. "One thing we can see clearly is that the recovery and rebalancing of the UK economy are proceeding at a slow and uncertain pace," King said. "At this stage, it is difficult to know whether some of the recent more positive signs will persist." CNBC/Reuters (24 Oct.) LinkedInFacebookTwitterEmail this Story
  • Commentary: EU's financial-transaction tax is bad news
    Tim Worstall, a senior fellow at the Adam Smith Institute in London, argues that the EU's proposed financial-transaction tax would not increase tax revenue. The levy would "lower tax revenue, not increase it", Worstall writes. "That someone can declare an increase in revenues when the effect will be a decrease shows that someone, somewhere, is either lying or ignorant." European Commission President Jose Manuel Barroso made that claim recently. The Telegraph (London)/Finance Blog (24 Oct.) LinkedInFacebookTwitterEmail this Story
  Spotlight on China 
  GFMA News 
  • Joint SIFMA/ISDA/FIA member call: CFTC no-action letters, FAQs and Q-and-A's -- noon Eastern TODAY
    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 today 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 
  • Last chance to register: Less than 3 weeks to go before the 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
  • Programme announced: AFME 4th Annual Spanish Funding Conference -- 27 November in Madrid
    AFME's 4th Annual Spanish Funding Conference is scheduled on 27 November at Uría Menéndez offices in Madrid. The conference will provide excellent networking opportunities, enabling delegates to hear from key industry figures and to strategically prepare for 2013 and beyond. The conference programme will encourage debate on the economic situation and the future of Spanish and European markets, including the role of securitisation and covered bonds in the recovery of the European economy. A networking reception will follow the conference, giving attendees a chance to discuss key topics of the day with peers. See further programme information and register. LinkedInFacebookTwitterEmail this Story
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  ASIFMA News 
The major task of the twentieth century will be to explore the unconscious, to investigate the subsoil of the mind."
--Henri Bergson,
French philosopher

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