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November 27, 2012
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  Credit Markets 
  • China's state banks are vulnerable to shadow lenders' losses
    Xiao Gang, chairman of Bank of China, recently warned in an editorial published in China Daily that the nation's regulated formal banking sector has significant exposure to the risks taken on by China's "shadow-finance" sector. "Regular banking and shadow banking are not isolated from each other," he wrote. "Many activities in the two systems feed into each other, and could influence each other if things start to deteriorate." The Wall Street Journal (11/26) LinkedInFacebookTwitterEmail this Story
  • Asset-backed lending revolvers bring extra risks, Fitch warns
    Combining asset-backed lending (ABL) revolvers with covenant-lite structures is growing in popularity but the approach has some negative consequences for lenders, Fitch Ratings said in a report. "The combined ABL and covenant-lite structure provides a borrower greater flexibility and more advantageous pricing," the firm said. "However, an ABL revolver ahead of a covenant-lite term loan could adversely impact future recovery rates on covenant-lite loans." Reuters (11/26) LinkedInFacebookTwitterEmail this Story
  • U.K. court case centers on bond restructurings
    Debt-restructuring procedures for sovereign and other issuers could be affected by a case coming before the English Court of Appeal next year. The High Court in London ruled this year that Anglo Irish Bank violated the law when it significantly reduced the value of bonds held by investors who would not participate in a restructuring. Financial News Online (U.K.) (subscription required) (11/26) LinkedInFacebookTwitterEmail this Story
  • Other News
  Regulatory and Accounting Issues 
  • Europe's 2013 bank stress tests will center on Basel III
    Next year will bring an assessment of European banks' progress in implementing Basel III capital rules. "We need to manage a shift of focus from a one-off recapitalization effort to developing the path for full implementation of Basel III standards," said Andrea Enria, chairman of the European Banking Authority. "We are structuring the stress test of next year along these lines." Reuters (11/20) LinkedInFacebookTwitterEmail this Story
  • Basel III amendments could relax liquidity obligations
    A long list of amendments could ease banks' compliance with global liquidity standards. The changes are under consideration by the Basel Committee on Banking Supervision. If all of the changes to the liquidity-coverage ratio are adopted, a shortfall in banks' buffer assets will decrease by 14%, a source said. (subscription required) (11/20) LinkedInFacebookTwitterEmail this Story
  • Global regulators will discuss oversight of derivatives market
    The Commodity Futures Trading Commission and the Securities and Exchange Commission will host global regulators this week to discuss harmonizing the approach to the derivatives market. Regulators in Europe and Asia have criticized the CFTC for its efforts to apply U.S. rules to overseas traders and financial institutions. Reuters (11/26) LinkedInFacebookTwitterEmail this Story
  • ESMA pushes common rulebooks across EU
    Common rulebooks for banking, insurance and securities markets should extend across the EU, instead of only the eurozone, European Securities and Markets Authority Chairman Steven Maijoor said, noting that "in securities markets, we hardly ever talk about eurozone and not eurozone." Maijoor's remarks come as efforts to establish a banking union raise fears of divisions along national lines or between the eurozone and nations outside. The Wall Street Journal/Dow Jones Newswires (11/20) LinkedInFacebookTwitterEmail this Story
  • New bank rules coming on schedule in China
    Tougher capital requirements for banks will be introduced on schedule in China, which doesn't plan to follow other countries in delaying implementation, said Wang Zhaoxing, vice chairman of the China Banking Regulatory Commission. "China has promised to anticipate the establishment of the global financial supervision system and adopt the international standards. ... It will be a Chinese version of capital criteria, tailored to suit Chinese banks' balance sheets, risk and business models," Wang said. China Daily (Beijing) (11/20) LinkedInFacebookTwitterEmail this Story
  • Other News
  IACPM News 
  • IACPM NY Fall Conference presentations now available to attendees
    Electronic copies of IACPM's Fall Conference presentations are available for download. All participants have received an email with instructions on how to access the presentations. If you attended the meeting and did not receive an email, or if you have trouble accessing the materials, please contact us at LinkedInFacebookTwitterEmail this Story
  • IACPM Risk Rating Survey results available to members
    Results of IACPM’s 2012 Risk Rating Systems Survey are now available on the members only portion of IACPM’s website. IACPM members can access the results using their login at: If you are an IACPM member and do not have a login and password, please contact us at LinkedInFacebookTwitterEmail this Story
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Every path hath a puddle."
--George Herbert,
Welsh-British poet, orator and priest

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