Regulation Correspondent, Europe
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May 13, 2014

BoE’s Cunliffe tells banks to prepare for post-”too big to fail” world

LONDON, May 13 (Reuters) – Britain’s banks need to start
preparing for a financial environment in which they are no
longer “too big to fail”, Bank of England Deputy Governor Jon
Cunliffe said on Tuesday.

Taxpayers in Britain poured 65 billion pounds into banks
during the 2007-09 financial crisis and the BoE wants to ensure
that no bank is so big that letting it fail would risk the
market mayhem seen when Lehman Brothers went bust in September

May 12, 2014

G20 pledge to reduce reliance on credit ratings is proving a hard slog

LONDON (Reuters) – Weaning the financial world away from heavy use of credit ratings is proving harder than expected as workable alternatives are taking time to put in place, global regulators said on Monday.

Leaders of the G20 group of leading economies pledged to end heavy “mechanistic” reliance on ratings in the financial sector after bundled loans based on U.S. mortgages became untradable in 2007 despite being highly rated, triggering a global financial markets and banking meltdown.

May 8, 2014

EU watchdog proposes window to adjust to derivatives clearing

LONDON, May 8 (Reuters) – Banks should get a breathing space
of a few months to adjust to coming new rules on the clearing of
derivatives deals, a top European Union regulator proposed on

The new rules, designed to make markets safer, will require
banks to pass more derivatives transactions in Europe through
clearing houses – third parties which are backed by a default
fund in case one side of the trade goes bust. Uncleared deals -
known as over-the-counter (OTC) – will attract higher charges
because of the increased risk.

May 7, 2014

Banks in UK face having to file two sets of accounts

LONDON, May 7 (Reuters) – Banks in Britain may have to
publish two sets of accounts, one for shareholders, the other
showing how they comply with rules from their supervisors, a top
UK regulator said on Wednesday.

Win Bischoff, chairman of the Financial Reporting Council
(FRC), the watchdog that polices accountants in Britain, told
lawmakers he backed their recommendation for two sets of
accounts to tighten scrutiny of lenders.

May 7, 2014

EU watchdog says biggest securities shake-up only half done

LONDON, May 7 (Reuters) – The biggest shake-up in the
European Union securities market is only half way complete with
a heavy load of new rules yet to come, a top EU regulator said
on Wednesday.

The 2007-09 financial crisis, which forced governments to
shore up banks, unleashed a wave of new market and banking rules
which are only now being rolled out to make the financial system
safer and shield taxpayers in future crises.

May 7, 2014

EU watchdog sounds warning over patchwork transaction tax

LONDON (Reuters) – A tax on stock, bond and derivatives transactions in fewer than half of European Union member states would “not be good” for the bloc’s securities market, a top EU regulator said on Wednesday.

The aim of the tax is to make banks pay back some of the taxpayer money they were given during the 2007-09 financial crisis but the levy is likely to raise only a fraction of the 35 billion euros originally hoped for as splits emerge over what should be taxed.

Apr 29, 2014

EU watchdog to clarify sovereign debt ratings rules

LONDON (Reuters) – The European Union’s regulator for credit rating agencies will clarify new rules on publishing changes to sovereign debt ratings to help investors confused by firms’ differing approaches.

The big three of Standard & Poor’s, Moody’s and Fitch have each responded differently to rules laid out by the European Securities and Markets Authority (ESMA), which authorizes and regulates credit rating agencies in the 28-country bloc.

Apr 29, 2014

Bank of England to test UK lenders’ resilience to 35 pct fall in house prices

LONDON, April 29 (Reuters) – Britain’s lenders will have to
show they hold enough capital to withstand a near 35 percent
slump in house prices and a spike in interest rates to 4
percent, the Bank of England (BoE) said on Tuesday.

The BoE’s Prudential Regulation Authority (PRA) said eight
of Britain’s biggest banks and building societies will have to
undergo the so-called stress test, in some cases on top of
separate European Union tests also announced on Tuesday.

Apr 29, 2014

EU unveils tougher bank test in bid to draw line under crisis

LONDON (Reuters) – European banks must show they can survive simultaneous routs in bonds, property and stocks in the toughest test to date by regulators aiming to restore confidence in an industry that had to be rescued by taxpayers in the financial crisis.

The European Banking Authority (EBA) said on Tuesday it would gauge the resilience of 124 banks from the 28-country European Union to see if they would still have enough capital after facing a toxic cocktail of theoretical shocks.

Apr 28, 2014

Low interest rates a focus in EU insurers health check

FRANKFURT/LONDON (Reuters) – European insurers will be tested to see whether they could stay in business even if interest rates remained at historic lows for a long time, a top regulator said on Monday.

Low interest rates make it harder for insurers to generate income from the assets they hold, thereby raising questions about their ability to pay out on customer policies.

    • About Huw

      "Huw is based in London and covers European regulatory issues and global rulemaking bodies such as the G20, Financial Stability Board, IOSCO, IASB and the Basel Committee. He has covered EU regulation in Brussels, the emergence pan-European stock markets, and has also been a Wall Street reporter in New York."
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