The Great Debate UK

Regulatory convergence is inevitable for global markets

–Gregg Beechey is a Partner in the Financial Institutions Group at law firm King and Wood Mallesons SJ Berwin. The opinions expressed are his own.–

One of the great disappointments in the raft of regulatory changes coming out of the financial crisis of 2008 has been the failure of regulators to work together to agree a common framework and, perhaps, the lack of a greater role for the International Organisation of Securities Commissions (IOSCO).  There seems to be a significant disconnect between the rate at which political agreement has turned into regulatory reality in Europe, the U.S. and other parts of the world.

In Europe, we face a tidal wave of new regulation, including:

    the Alternative Investment Fund Managers Directive for fund managers the European Markets Infrastructure Regulations taking OTC derivative trades into the world of central clearing and layering on new compliance requirements CRD IV implementing Basel 3 in relation to bank capital Solvency II, bringing new capital requirements for insurers the European Commission’s proposals to regulate shadow banking – in particular, certain money market funds.

This is matched to some extent with the activity in the U.S. under the banner of Dodd-Frank, with changes to the regulation of investment advisers by the SEC, derivatives trading by the CFTC, regulation of banks and implementation of Basel 3 and similar discussions on shadow banking.

Asian political leaders have signed up to the same agreements as those in the U.S. and Europe, but there seems to be far less local enthusiasm or urgency to turn these into concrete proposals.  Although Asian financial institutions and structures have become more sophisticated in recent years, there remains significant variation in the degree to which Asia’s domestic capital markets have matured and integrated with others in the region. These markets remain more integrated with global financial markets than with other local financial markets and problems of regional financing and funding and fragmentation across capital markets still exist.

“Tobin Tax” is a step backward for financial markets

–Tanuja Randery is the CEO of trading services firm MarketPrizm. The opinions expressed are her own.—

As the economic downturn continues to drag on, the cynics amongst us might be forgiven for thinking that the “Tobin Tax” is a move by politicians to curry public favour by taking punitive measures against the financial services sector.

Is the U.S. picking on our banks?

By Kathleen Brooks. The opinions expressed are her own.

Standard Chartered is the latest UK-based bank that seems to be getting it in the neck from our friends across the water. Firstly, there was Barclays and the Libor scandal, then there was HSBC which was fined for allowing drug-trafficked money from Mexico to go through its system and now there is Standard Chartered which is charged with “wilfully misleading” the New York Department of Financial Services and clearing $250 billion of Iranian transactions through its U.S. operation.

Two can be a coincidence, but three in as many months? Since the news on Standard Chartered broke there has been a torrent of investors, politicians and even some in the media who have queried whether this is just an attempt by Washington to discredit London and re-establish New York as the world’s financial centre.

from The Great Debate:

The Trojan Horse of cost benefit analysis

By John Kemp
The writer is a Reuters market analyst. The views expressed are his own.

LONDON - Should federal government agencies have to prove the benefits of new regulations outweigh the costs before introducing them?

from Breakingviews:

RBS shows watchdogs need power to stop M&A

By Peter Thal Larsen
The author is a Retuers Breakingviews columnist. The opinions expressed are his own.

The failure of Royal Bank of Scotland shows bank reform still has some way to go.

from FaithWorld:

Pope slams selfish food speculators, urges curbs on world commodity markets

Photo

(Traders in the Corn options pit at the CME Group signal orders shortly before the closing bell in Chicago, February 11, 2011/Frank Polich )

Pope Benedict said on Friday financial trading based on "selfish attitudes" is spreading poverty and hunger and called for more regulation of food commodity markets to guarantee everyone's right to life. "Poverty, underdevelopment and hunger are often the result of selfish attitudes which, coming from the heart of man, show themselves in social behaviour and economic exchange," the pope told a U.N. food agency conference.

Mansion House Hangover

Last night’s two big Mansion House speeches were impressive when they dealt with the macroeconomy, but depressing (if unsurprising) on the subject of reforming the banks, representing final confirmation of the gloomy conclusion of a blog I posted here in September 2009: It’s All Over – the Banks Have Won.

Of course the banks will squeal – why wouldn’t they? After all, they daren’t be seen cracking open the bubbly.

Matthew Elderfield on re-shaping Ireland’s regulatory system

Matthew ElderfieldMatthew Elderfield, Head of Financial Regulation at the Central Bank of Ireland, will lay out his vision for a new Irish regulatory landscape at a Thomson Reuters Newsmaker on Wednesday 6 April.

‘Ireland: Re-shaping the Regulatory and Banking System’ will be hosted by Reuters’ Jodie Ginsberg, UK and Ireland Editor, and will be streamed live to the Reuters UK website as part of our rolling coverage from 0830 BST.

Bank bonus season again

–Laurence Copeland is a professor of finance at Cardiff University Business School . The opinions expressed are his own–

Bank bonuses are in the news again, and once more we see the spectacle of the Prime Minister indirectly pleading with the bankers not to be too greedy. Note the contradiction in the government’s position: even though we own two of the largest and most culpable banks, we dare not impose explicit limits on their pay lest they decamp to places where the political climate is more hospitable and the regulators more tolerant. But although enforced limits are out of the question, it’s quite OK to pressure them by every other means  – which, of course, raises the question: why should bankers be more willing to stay in Britain when their pay packet is limited by “voluntary” restraint rather than government intervention?

A changing of the guard in UK regulatory structure

Press Action Head and Shoulders– Richard Saunders is Chief Executive of the Investment Management Association. The opinions expressed are his own. –

Last week I was among a number of people asked to appear before the House of Commons Treasury Select Committee to talk about the Government’s plans for reorganising financial services regulation.  It was an opportunity both to see the new Committee in action and to set out how I see the plans affecting the investment management industry.

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