By Huw Jones
(Reuters) – The European Union has signalled that one of its
key rules for regulating financial derivatives could be aligned
with U.S. practice to help to end a lengthy dispute that risks
fragmenting the $630 trillion market.
The dispute revolves around a rule that would require
European market players to hold far more capital than U.S.
counterparts for clearing trades, with the disparity holding up
a broader transatlantic deal on supervising a derivatives market
that largely trades out of London and New York.
LONDON, Sept 2 (Reuters) – The European Union should speed
up recognition of non-EU clearing houses to avoid compounding
emerging market volatility and fragmenting the $630 trillion
derivatives market, a global exchanges body said on Wednesday.
The World Federation of Exchanges (WFE) said delays by
Brussels in deciding whether to allow non-EU clearing houses to
continue serving European users risk a capital flight from some
emerging market economies.
LONDON, Sept 1 (Reuters) – Germany, France and Britain are
seeking amendments to new EU rules that aim to increase
transparency in bond trading, arguing that the current proposals
could have negative unintended consequences for investors and
In a joint letter to the European Commission, seen by
Reuters on Tuesday, the three countries said the rule changes
now proposed could result in “significant negative implications
for the proper functioning of these vital markets”.
LONDON (Reuters) – Regulators and central bankers should rethink how rules are applied to stop extremist financing and money laundering, or some emerging market economies risk grinding to a halt, an official of the World Economic Forum (WEF) think-tank said.
Anders Borg, the former Swedish finance minister who chairs a WEF initiative to improve how the financial system can foster long-term growth, said quick action was needed.
LONDON (Reuters) – European Union rules to shield taxpayers from having to rescue ailing banks should be applied flexibly because of broader economic imperatives highlighted by the latest Greek rescue package, analysts and lawyers say.
That flexibility may mean that European taxpayers cannot be given cast-iron guarantees that they will not be called upon again to bail out banks as during the financial crisis.
LONDON, Aug 20 (Reuters) – Banks would in future need to
declare publicly that their pooled debt is of top quality in
order to benefit from lower capital charges, according to a
draft European Union law seen by Reuters that is raising
concerns from some investors.
The proposal is significant because pooled debt, which
merges masses of loans like mortgages into asset-backed
securities (ABS), was at the heart of the global financial
crisis. ABS based on poor-quality U.S. home loans became
untradable in 2007, triggering a string of bank failures.
LONDON (Reuters) – Global regulators and central bankers
have proposed a common tagging system for off-exchange
derivatives transactions to spot more easily which banks could
be at risk in a market crisis.
Regulators were left in the dark when Lehman Brothers went
bust in September 2008, unable to see who was on the other side
of the U.S. bank’s derivatives transactions, adding to
uncertainty that fuelled a global markets meltdown.
LONDON, July 30 (Reuters) – Global work by regulators on
whether big asset managers should face tougher rules because of
their size has been put on hold to focus on their ability to
cope in volatile markets, a task force set up for the Group of
20 leading economies said on Thursday.
The Financial Stability Board (FSB) had proposed a method
for identifying large asset managers that could then face extra
scrutiny, a move which has been fiercely opposed by the sector.
LONDON (Reuters) – Hedge funds from Guernsey, Jersey and Switzerland should be allowed to serve investors across the 28 country European Union, the bloc’s securities watchdog said on Thursday.
The European Securities and Markets Authority (ESMA) also said it has not yet reached a view on whether hedge funds and other alternative investment funds from the United States should be given a “passport”.
LONDON, July 29 (Reuters) – Asking outside auditors to vouch
for the accuracy of a bank’s key measure of health could help
restore investor trust in the sector, a London-based accounting
body said on Wednesday.
The Institute of Chartered Accountants in England and Wales
(ICAEW) kicked off a public consultation on how accountants
could check on bank capital ratios, a measure of capital a
lender holds in relation to risky assets such as loans.