Regulation Correspondent, Europe
Huw's Feed
Feb 18, 2015

Europe looks to securitized debt to aid flagging economy

LONDON (Reuters) – The European Union looks set to reduce capital charges on securitized debt to revive a market that triggered the global financial crisis but is now seen as key to funding the region’s flagging economy.

The EU’s executive European Commission said on Wednesday it was planning to create a new class of high quality, simple, asset-backed securities that could benefit from lighter capital requirements, and help to plug funding gaps in Europe.

Feb 16, 2015

Big Three ratings agencies defy new curbs to regain pre-crisis clout: watchdog

LONDON (Reuters) – Revenues and margins at Europe’s “Big Three” credit rating agencies (CRAs) are back to pre-financial crisis levels and the trio are in line for more business, despite a welter of new rules aimed at reducing their influence, a regulator said on Monday.

Moody’s, Standard & Poor’s and Fitch came under fire when securitized debt they rated highly turned toxic from 2007, sowing the seeds for a global market meltdown and costly bank bailouts.

Feb 16, 2015

UK financial watchdog investigates HSBC over tax claims

LONDON, Feb 16 (Reuters) – Britain’s financial watchdog said
it was investigating HSBC following reports it helped clients
evade taxes but said it was focusing on the bank’s current
behaviour rather than alleged past abuses.

In its first statement on the matter, the Financial Conduct
Authority (FCA) said it wanted to verify that the “failings” the
bank admitted to were in the past.

Feb 15, 2015

EU eyes markets as savior for flagging economy

LONDON (Reuters) – The EU turns to stock and bond markets this week with reform proposals intended to help companies raise the cash needed for growth-boosting investments, hoping to emulate the more active capital markets of the United States.

Jonathan Hill, the EU’s financial services chief, will on Wednesday set out possible reforms to create a capital markets union (CMU), eliminating national rule differences to help markets complement bank lending in doing the heavy lifting involved in raising money for the economy.

Feb 12, 2015

Exclusive: EU states look to dilute plans to rein in risky trading – documents

LONDON (Reuters) – European Union efforts to curb risk taking by banks look set to be watered down as key member states such as Germany shield “universal” lenders from more onerous rules, EU documents seen by Reuters on Thursday showed.

The European Union reform aims to avoid trading blow-ups from bringing down entire banks. But countries such as Germany and France have dragged their feet after introducing their own national reforms, which may overlap with the new plan.

Feb 11, 2015

BoE’s Furse: markets more vulnerable to shocks as liquidity shrinks

LONDON, Feb 11 (Reuters) – Markets are less active and
therefore less able to absorb shocks and fund growth now that
tougher capital rules have forced banks to cut back on trading,
a senior Bank of England policymaker said on Wednesday.

Clara Furse, a member of the BoE’s Financial Policy
Committee (FPC) and former chief executive of the London Stock
Exchange, said the risk from shrinking liquidity is not
fully priced in, making them vulnerable to sharp corrections.

Feb 11, 2015

New guide aims to help firms raise funds privately across Europe

LONDON, Feb 11 (Reuters) – New ground rules to help
companies raise funds privately across Europe have been
introduced as the EU financial industry seeks to reduce a
reliance on banks and U.S. investors.

Banks are traditionally the main source of corporate funding
in Europe, but EU officials want to increase how much cash for
companies is raised from markets, to make the region less
vulnerable to banking shocks like the 2008-9 global crisis.

Feb 10, 2015

UK lawmakers, watchdog spar over rate swaps compensation

LONDON, Feb 10 (Reuters) – A scheme for compensating
companies mis-sold complex products by banks to shield against
interest rate hikes is skewed in favour of the lenders, British
lawmakers said on Tuesday.

The scheme was set up by the Financial Conduct Authority to
require banks such as Lloyds, Barclays, RBS
and HSBC to compensate thousands of small
companies that were mis-sold products known as interest rate

Feb 10, 2015

UK banks wrongly shunning customers in dash to cut risk, watchdog says

LONDON, Feb 10 (Reuters) – Banks are wrongly shunning some
customers and need to take a more targeted approach to applying
rules aimed at tackling money laundering and channeling cash to
terrorists, Britain’s markets watchdog said on Tuesday.

Martin Wheatley, chief executive of the Financial Conduct
Authority (FCA), told lawmakers that banks were “de-risking” by
giving a “wide berth” to whole groups of customers.

Feb 6, 2015

Lawyer says British banks are off the hook with embedded rate swaps

LONDON, Feb 6 (Reuters) – Banks cannot be forced to
compensate small companies that bought so-called embedded
products to shield themselves from rising interest rates, a
senior lawyer told British lawmakers examining the matter after
complaints from borrowers.

Since 2010 small companies have bought 60,000 such hedging
instruments, which are considered part of a bank loan rather
than a separate insurance product. Some borrowers claim that
they were mis-sold, but the Financial Conduct Authority (FCA)
has said it does not have the power to launch a redress scheme.

    • 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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