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11 April 2012
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News on the global financial markets

  Morning Bell 
  • France leans toward Volcker rule over Vickers-style reforms
    French bankers noted their preference for reforms akin to America's Volcker rule as opposed to Britain's Vickers-style overhaul. As the French presidential race heats up, politicians are taking a stance as well. Francois Hollande, the Socialist presidential front-runner, prompted concerns that he might try to carve up banks' activities. However, sources close to Hollande said they are leaning away from ring-fencing. "The Vickers system is not suited to France," a Hollande source said. "It's much more the Volcker rule which we have in mind, with a clear functional separation of activities." Reuters (10 Apr.) LinkedInFacebookTwitterEmail this Story
  • Commentary: Volcker rule isn't the solution
    Peter Wallison, a senior fellow at the American Enterprise Institute, argues that the Volcker rule is fatally flawed, as it will weaken banks and hinder market liquidity. He argues that simplifying the rule is easier said than done, and he questions the motivation behind the rule. "So why is proprietary trading by banks now to be prohibited?" he writes. "Although Dodd-Frank was intended to prevent future financial crises, no one has yet been able to point to bank proprietary trading as a factor in weakening the banks before the 2008 financial panic." The Wall Street Journal (10 Apr.) LinkedInFacebookTwitterEmail this Story
  Industry News 
  • Spanish banks could use more capital, central banker says
    Miguel Angel Fernandez Ordonez, governor of the Bank of Spain, said banks likely will need more capital if the economy deteriorates further. Ordonez doesn't expect a strong economic recovery in the short term. In fact, Spain is sinking into its second recession in three years, with more loan defaults expected. Reuters (10 Apr.) LinkedInFacebookTwitterEmail this Story
  • "London whale" stops derivatives trades, but waves continue
    JPMorgan Chase trader Bruno Iksil stopped making massive credit-derivatives bets that earned him the nickname "London whale", but hedge funds and other investors remain involved in strategies against him. Investors who bet against Iksil suffered large paper losses as he drove down a credit index. The situation made Iksil a target, sources said. "I view the entire market as a chess match playing against this guy," one trader said. The Wall Street Journal (10 Apr.) LinkedInFacebookTwitterEmail this Story
  • Other News
  Regulatory Roundup 
  • Study: RWA divergence could be because of regulatory differences
    Divergence in banks' data for risk-weighted assets could be caused by national regulators' differing approaches, a study found. "In the European Union, all internal ratings-based models are developed by banks under the supervision of regulators," said Gonzalo Gasos of the European Banking Federation, which led the study. "These supervisory practices often differ substantially, so it is time to examine them properly and seek further convergence. We believe they are the source of much of the RWA inconsistency we see." (subscription required) (10 Apr.) LinkedInFacebookTwitterEmail this Story
  • Other News
  Spotlight on China 
  • China plans to encourage private investment in Wenzhou
    Zhou Xiaochuan, governor of the People's Bank of China, supports private investment in Wenzhou's financial sector as the nation tests market liberalisation. China is looking to the experiment to establish the cornerstone of financial reforms. Reuters (10 Apr.) LinkedInFacebookTwitterEmail this Story
  AFME News 
  • Member of European Parliament Kay Swinburne will open AFME 5th Annual European Post-Trade Conference -- 16 May in London
    The European Post-Trade Conference will cover crucial developments in the post-trade space and their impact on the industry, including regulation of central securities depositories, TARGET2-Securities, legal-entity identifiers, interoperability and extraterritoriality. The event is an essential, annual gathering for post-trade professionals to receive updated information from leading European speakers, including:
    • Kay Swinburne, member of the European Parlaiment Economic and Monetary Affairs Committee
    • Verena Ross, executive director of the European Securities and Markets Authority
    • Jean-Michel Godeffroy, director general and chairman of the T2S Programme Board at the European Central Bank
    • Patrick Pearson, head of DG Market at the European Commission
    • Ben Cohn-Urbach, senior associate for over-the-counter derivatives and post-trade policy at the UK Financial Services Authority

    Join the event to network with senior operations executives, market-infrastructure executives, senior regulators, policymakers and providers. Register! LinkedInFacebookTwitterEmail this Story
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