German CDS switch creates credit-linked note mismatch

By Helen Bartholomew May 14, 2019, Risk Issuers of credit-linked notes referencing German banks face a possible dislocation in contracts used to hedge the products, after an industry-wide protocol transferred swathes of senior credit default swaps (CDS) on those...

Korea tightens autocall oversight as local houses take on risk

By Chris Davis May 13, 2019, Risk South Korean securities houses are hedging more autocall issuance themselves instead of outsourcing risk management to foreign banks, according to recent market data. The shift is one reason the country’s financial regulator...

BOE to scrutinize banks’ op risk tolerance limits

By James Ryder May 14, 2019, Risk The Bank of England will publish a consultation paper later this year, asking banks to prove their tolerance limits for operational risk are realistic and can be adhered to consistently, said its...

Want to catch misbehavior? Watch the electronic chat

By Alexander Campbell May 14, 2019, Risk The monitoring of internal electronic messages has become among the most potent tools of first-line risk managers, a BNP Paribas executive has told Risk.net. “It is amazing how many people have arguments...

ECB Official Considers Stablecoins More Promising Than Bitcoins

By Carolynn Look and William Horobin May 14, 2019, Bloomberg European Central Bank policy maker Francois Villeroy de Galhau said not all cryptocurrencies are created equal. While ECB President Mario Draghi lambasted them last week for not being real...

ETFs’ liquidity under question

By Rebekah Tunstead May 14, 2019, bobsguide Despite disagreement over the liquidity level of exchange traded funds (ETFs) thanks to the volume number of funds that are traded off-exchange, ETFs remain liquid, said Deborah Fuhr founder of ETFGI at...

Why MiFID II is a menace to investment banking in Europe

By Andrea Vismara May 12, 2019, Financial Times MiFID II is contributing to the slow death of European investment banking, and regulators must act. The directive, brought into force in early 2018, demands the completely unnecessary unbundling of the...

How to guard against MiFID’s unplanned effects

May 13, 2019, Financial Times It has been in effect for a much shorter time than its ill-tempered gestation, but the E.U.’s second Market in Financial Instruments Directive (or MiFID II) is already shaking up equity investing throughout Europe...

Fannie and Freddie unlikely to be privatized, says U.S. lawmaker

By Kiran Stacey and Robert Armstrong May 13, 2019, Financial Times Congress is likely to resist attempts by U.S. president Donald Trump’s administration to privatize the two companies that guarantee most American mortgages, the most senior Democrat working on...

Fannie and Freddie Back More Mortgages of Those Deeply in Debt

By Ben Eisen May 13, 2019, The Wall Street Journal The gatekeepers of the American mortgage market are increasingly backing loans to borrowers who have heavy debt loads, highlighting questions about mortgage risk as policy makers debate ways to...

Further Brexit delay would hit U.K. economy: BOE’s Broadbent

By William Schomberg May 13, 2019, Reuters Britain’s economy risks damage if Brexit is delayed beyond its latest Oct. 31 deadline because companies would continue to hold back on investment, Bank of England deputy governor Ben Broadbent was quoted...

U.K. lawmakers square up to regulator over duty of care for banks

By Huw Jones May 13, 2019, Reuters A legal duty for banks to act in the best interests of their customers may be needed, British lawmakers said on Monday, piling pressure on regulators to step up protection of consumers...

Is Dodd-Frank council evolving, or throwing in the towel?

By John Heltman May 9, 2019, American Banker When the Financial Stability Oversight Council proposed new guidance in March, the interagency body was signaling a clear change in approach to combating nonbank systemic risks: focus on activities, not individual...

Brown to regulators: Be ready to discuss leveraged loans at hearing

By Neil Haggerty May 13, 2019, American Banker Banking regulators testifying in Congress this week must provide details on leveraged lending risks after Treasury Secretary Steven Mnuchin failed to “substantively” address lawmakers’ concerns, a senior Democrat said Monday. Sen....

Treasury’s Mnuchin backs plan to ease non-bank oversight despite predecessors’ criticism

May 13, 2019, MLex U.S. Treasury Secretary Steven Mnuchin endorsed a regulatory plan to erect barriers to deeming a non-bank systemically important even as it was decried as a “substantial weakening” of post-crisis reforms by his two predecessors. Mnuchin...

The Day Traders Are Back, Now Playing With Options

By Lisa Beilfuss and Gunjan Banerji May 11, 2019, The Wall Street Journal Martin Rogers has been regularly trading options from his mobile phone since last summer, after dabbling in stocks and derivatives for years. A pharmaceutical representative based...

No more delays on MiFID open access, E.U. regulator says

By Costas Mourselas May 13, 2019, Risk First it was on, then it was off. Now it’s back on again. The far-reaching regulatory change designed to give European financial market users free choice of where to clear their trades,...

Giancarlo defends work on CCP resolution

By James Thursfield May 10, 2019, Global Investor Group The Commodity Futures Trading Commission (CFTC) chairman has defended work by global regulators on clearing counterparty (CCP) resolution, claiming that recent criticism was “ill-informed”. Speaking at the Futures Industry Association...

SEC seeks to improve cross-border security-based swaps rules

By Louisa Chender May 13, 2019, Global Investor Group The Securities and Exchange Commission (SEC) is proposing to improve rules for cross-border security-based swaps by addressing implementation issues and concerns about efficiency. The U.S. securities regulator has proposed a...

Market demands STS harmonization

By Sharon Kimathi May 9, 2019, Practice Insight from IFLR Sources are calling for consistent application of the simple, transparent and standardized (STS) requirements from national competent authorities (NCAs) under the Securitization Regulation. Industry sources tell Practice Insight that...

E.U. banks call for rethink of capital markets project

By Huw Jones May 10, 2019, Reuters The European Union’s efforts to create a capital market to rival the United States have made little headway and the project needs a new push to remove barriers that hamper progress, bankers...

Tackling China’s Onshore Bond Market

By Wei-Shen Wong May 9, 2019, Waters Technology Tradeweb, which recently raised $1.1 billion in its initial public offering on Nasdaq, was the first offshore platform to link with the Bond Connect program. Li Renn Tsai, managing director and...

The Big Risk Lurking in ETF Markets

By Alicia McElhaney May 9, 2019, Institutional Investor The markets underpinning credit exchange-traded funds are showing signs of declining liquidity — and that could spell trouble in the next downturn, new research from Moody’s Investor Service argues. “Unexpected market...

Glimmers of light emerge from Europe’s securitization slump

By Huw Jones May 9, 2019, Reuters Europe’s first “simple” asset-backed security was issued in the first quarter of the year under new rules aimed at reviving a market that turned toxic in the financial crisis a decade ago,...

Warning on Brexit Fragmentation

By Shanny Basar May 9, 2019, Markets Media Market participants warned about the U.K.’s departure from the European Union leading to the fragmentation of both trading liquidity and regulatory data. Haroun Boucheta, head of public affairs, BNP Paribas Securities...

How Bloomberg’s Failed FIGI Vote Reveals a Substandard Standards Process

By Jamie Hyman May 8, 2019, Waters Technology Bloomberg doesn’t get outplayed very often. Yet an attempt to get the Bloomberg-backed Financial Instrument Global Identifier (FIGI) accredited by the International Organization for Standarization (ISO) lost by a landslide vote...

Bank of England Explores Synchronized Settlement

By Shanny Basar May 8, 2019, Markets Media The Bank of England is exploring synchronized settlement and wants to increase the use of legal identity identifiers to make them more useful to end users. Sir David Ramsden, deputy governor...

Final FRTB tweak ‘will kill correlation trading’, say dealers

By Nazneen Sherif May 9, 2019, Risk Changes to market risk rules are threatening to drive up capital charges for correlation trading desks, and may force dealers to rethink hedging methods or close down the business altogether. The latest...

ECB defends securities settlement system after fee hike

By Huw Jones May 8, 2019, Global Investor Group Financial markets need to push more trades through the European Central Bank’s settlement system to cut costs, an ECB official said, dismissing industry criticism that the new system was failing...

T2S hasn’t delivered, costs need to be cut – panel

By Andrew Neil May 9, 2019, Global Investor Group The European Central Bank’s settlement platform has created additional costs for market participants and hasn’t improved access to European securities as promised, according to industry executives. Speaking in London on...