Regulation Correspondent, Europe
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Jul 28, 2014

Lloyds Bank fined $370 million for rigging Libor interest rates

LONDON/WASHINGTON (Reuters) – Britain’s Lloyds Banking Group (LLOY.L: Quote, Profile, Research, Stock Buzz) has agreed to pay fines totaling $370 million to U.S. and British authorities investigating its part in a global interest rate rigging scandal and manipulating fees for a UK government lending scheme.

The settlement is the seventh joint penalty handed out by American and British regulators in connection with the attempted manipulation of the London interbank offered rate, or Libor, and other similar benchmarks used to price around $450 trillion of financial products worldwide. The misconduct related to Libor rates for sterling, the U.S. dollar and Japanese yen.

Jul 24, 2014

EU executive proposes 9-month delay to bank buffer plan

LONDON, July 24 (Reuters) – European Union rules forcing
banks to hold a buffer of cash and top quality debt to withstand
market shocks will be delayed by nine months, the bloc’s
executive body has proposed.

The so-called liquidity coverage ratio (LCR) is part of a
global deal known as Basel III to beef up banks’ resilience so
they do not have to rely on taxpayers again as they did in the
2007-09 financial crisis.

Jul 24, 2014

Bank of England hints at size of new bond buffer for big banks

LONDON, July 24 (Reuters) – Britain’s biggest banks, such as
Barclays and HSBC, will need to build up a
buffer of loss-absorbing bonds at least as big as the capital
they already hold to cushion against shocks, according to a
senior Bank of England official.

These bonds could be used if a bank went bust to provide
cash to help keep key parts of the bank afloat while it is
restructured.

Jul 24, 2014

Banks to provision earlier on bad loans under new global rule

LONDON, July 23 (Reuters) – Banks must provision for souring
loans much earlier under an international rule published on
Thursday that will take effect in 2018, a decade after a global
financial crisis the accounting reform seeks to stop recurring.

The collapse of Lehman Bros in 2008 highlighted how little
capital banks held to cover a slump in the value of the assets
on their books, forcing the public to bail out many lenders.

Jul 22, 2014

G20 watchdog orders Libor alternatives by 2016 in benchmark reform

LONDON, July 22 (Reuters) – Global regulators will implement
a twin-track approach to ensuring interest rate benchmarks are
less prone to manipulation, recommending safeguards to the
current system as well as developing alternatives.

Ten banks and brokerages including Barclays and UBS
have paid a total of around $6 billion to date to
settle U.S. and European regulatory allegations that they
manipulated the London Interbank Offered Rate, or Libor, a
benchmark against which around $450 trillion of financial
products from derivatives to home loans are priced worldwide.

Jul 22, 2014

Global watchdog recommends multi-pronged reform of Libor benchmarks

LONDON (Reuters) – Global regulators have proposed a twin-track approach to ensuring that interest rate benchmarks are less prone to manipulation by recommending safeguards to the current system and also by developing alternatives.

Ten banks and brokerages have paid around $6 billion to date to settle U.S. and European regulatory allegations that they manipulated the London Interbank Offered Rate, or Libor, a benchmark against which around $450 trillion of financial products from derivatives to home loans are priced worldwide.

Jul 9, 2014

Draghi urges euro zone states “to be sovereign together”

LONDON, July 9 (Reuters) – European Central Bank President
Mario Draghi urged euro zone states to respect their joint
fiscal rules and extend their cooperation to economic reforms,
telling governments they must “learn to govern together”.

While reiterating his message that the ECB is ready to use
“unconventional instruments” – code for large-scale asset buying
- if needed, he devoted most of a speech in London to pressing
for closer European integration to deliver growth and jobs.

Jul 9, 2014

EU watchdog rolls out rules for closing failed banks

LONDON, July 9 (Reuters) – The European Union’s banking
watchdog has set out guidance on how supervisors must determine
from next year whether an ailing bank can be closed down without
disrupting markets or calling on taxpayer money.

The European Banking Authority’s draft guidance, put out to
public consultation, fleshes out one aspect of a new EU law on
dealing with troubled banks without requiring government money
as happened in the 2007-09 financial crisis.

Jul 9, 2014

UK launches competition review into institutional banking

LONDON, July 9 (Reuters) – Britain’s financial watchdog is
launching a broad “exploratory” review of competition in
wholesale financial markets to check if they operate effectively
to aid the economy and give their institutional, corporate and
government customers a good deal.

The Financial Conduct Authority (FCA) was set up just over a
year ago as part of Britain’s post-financial crisis shake up of
supervision to protect consumers better and increase competition
in markets.

Jul 7, 2014

Top banks face wait for detail of new buffer to protect against bailouts

LONDON, July 7 (Reuters) – Details of a new buffer of bonds
to shield taxpayers from having to rescue a big bank won’t
become clear for at least a year or more, a global banking
regulator said on Monday.

Lenders like Goldman Sachs, Deutsche Bank and HSBC are
waiting to see how big the new cushion of bonds must be. The
cushion represents an added cost and the wait will prolong
regulatory uncertainty that is casting a cloud over valuations
in the banking sector.

    • 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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