Regulation Correspondent, Europe
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May 18, 2015

EU watchdog challenged over ‘shadow-bank’ curbs on lenders

LONDON (Reuters) – Curbing mainstream banking links to “shadow banks” will bolster confidence in the financial system while still allowing funding for the economy, European Union regulators said on Monday.

The 2007-09 financial crisis prompted policymakers to shine a spotlight on the hitherto largely unregulated sector, which creates credit as do banks.

May 17, 2015

Borders undermine drive to solve “too-big-to-fail” banking problem

LONDON, May 17 (Reuters) – Regulators are worried that
patchy application in Europe and beyond of new rules to solve
the problem of banks that are “too big to fail” could make it
harder to avoid a repeat of the mayhem that followed the
collapse of Lehman Brothers.

They point to likely inconsistencies in how banks will be
treated under the rules that are being written, not only between
European authorities in and outside the euro zone but also in
jurisdictions further afield such as the United States.

May 15, 2015

Bank of England to test UK banks on coping with illiquid markets

LONDON, May 15 (Reuters) – Britain’s banks will be tested
this year on how they would cope with investors clammering to
sell bonds in fragile markets, Bank of England Deputy Governor
Andrew Bailey said on Friday.

Regulators are increasingly concerned that bond investors
will stampede for the exits when interest rates begin rising,
creating huge price swings because there won’t be enough
liquidity or inventory capacity to cope.

May 15, 2015

Rules alone won’t halt market wrongdoing: BoE’s Bailey

LONDON (Reuters) – Changing rules and codes of conduct will not address the cultural problems in banks’ trading arms laid bare by seven years of investigations into market-rigging, the Bank of England’s chief regulator said.

Andrew Bailey, head of the bank’s Prudential Regulation Authority, spoke to Reuters ahead of the publication next month of Britain’s Fair and Effective Markets Review, billed as potentially the last word on efforts to reform conduct at banks in the UK after four years of scandals and fines for market manipulation.

May 15, 2015

BoE says banks must comply with EU pay allowances rules

LONDON (Reuters) – British banks must rewrite contracts for senior staff to comply with new European Union rules banning top-up “allowances” that breach a cap on bonuses, the Bank of England (BoE) has said.

Banks have been giving key staff allowances on a monthly or quarterly basis to bump up their basic pay and soften the impact of the curb on bonuses – which can be no more than fixed pay or twice that amount with shareholder approval.

May 15, 2015

BoE says UK insurers will need more time to meet EU solvency rules

LONDON (Reuters) – Britain’s insurers will need more time to comply fully with new European Union capital rules that come into force next January, the Bank of England has said.

Andrew Bailey, who heads the BoE’s supervisory arm, the Prudential Regulation Authority (PRA), said implementing the Solvency II rules is his single biggest task this year.

May 14, 2015

What’s the worry for Europe’s bank regulators? Low interest rates

LONDON (Reuters) – Low interest rates that have forced investors to pile into riskier assets in the hunt for yield pose the biggest risk to financial stability at present, top banking regulators in Europe said at this week’s Reuters Regulation Summit.

Already historically low interest rates have been pressured further by the European Central Bank’s 1 trillion-euro ($1.1 trillion) bond buying spree.

May 13, 2015

New euro zone watchdog says banks must revamp IT systems

LONDON (Reuters) – Many euro zone banks must overhaul their technology to ensure they can be split up swiftly if they run into trouble – without disrupting customers, Europe’s newest banking watchdog said on Wednesday.

The Single Resolution Board (SRB) in Brussels was set up earlier this year to handle failing lenders after the European Central Bank took over supervision of Europe’s top 120 banks.

May 12, 2015

EU watchdog to turn up heat on banks over capital

LONDON (Reuters) – Banks will need to meet tougher capital rules early to restore public trust in the sector’s health, a top European Union regulator said on Tuesday.

Some banks in Europe have a stock market values less than the sum of their assets, seen as an indication by regulators of a lack of confidence in the capital buffers they hold.

May 11, 2015

EU watchdog says QE adding to liquidity headache

LONDON (Reuters) – The ECB’s trillion euro money printing program has put asset managers at the frontline of a possible liquidity crunch, though bringing in new rules to curb investment risk would be wrong for now, a top EU markets supervisor said on Monday.

The European Central Bank has begun a 19-month bond-buying spree, aimed at spurring the economy and helping to push yields in fixed income markets into negative territory in some cases.

    • 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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