Gfma :
Monday 12 December 2011 GFMARegulatory Roundup | ![]() |
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EBA recommendations could lead to
"EuroTARP"
The European Banking Authority recently published its
recommendations for recapitalising the region's banks, and its term
sheet for convertible capital securities. In the process, the EBA
might have created a framework for a European version of the US
Troubled Asset Relief Program. "In harmonising the rules for these
instruments, the EBA's term sheet echoes the four-page term sheet
that the US authorities set out in 2008 with regards bank
preference shares, in that it has set out a harmonised structure
for a potential EuroTarp," said Khalid Krim, head of hybrid capital
structuring at Morgan Stanley. The Wall Street Journal/Financial News(09
Dec.)
BIS appears to endorse central banks' coordinated
effort
The Bank for International Settlements indicated its support for a
coordinated effort by several major central banks. "A freezing of
interbank markets in major funding currencies, as during the recent
crisis, may require the ability to supply official liquidity in
major currencies in an elastic manner," the bank said. "Only the
currency-issuing central banks have this ability." The BIS also
suggested that the Bank of England's 2009 and 2010 asset purchases
might not have had the impact that the central bank estimated.
MarketWatch(12 Dec.), Bloomberg(12 Dec.), The New York Times (tiered subscription
model)/DealBook blog(11 Dec.)
Bundesbank head says governments must resolve debt
crisis
Jens Weidmann, president of Germany's Bundesbank, dampened
expectations that the European Central Bank might extend its role,
and said the region's governments must resolve the sovereign-debt
crisis. "The mandate for redistributing taxpayer money among member
states clearly does not lie in monetary policy," Weidmann said in
an interview. "Financing of sovereign debt through central banks is
and remains forbidden by treaty." Bloomberg(12 Dec.)
New UK financial watchdog seeks broad authority
over banks
The Financial Policy Committee, a new financial risk watchdog in
Britain, is seeking broader powers to avoid governments having to
rescue financial institutions, according to Andrew Haldane, an
official at the Bank of England and a member of the FPC. "I hope in
time the FPC policy actions will be sufficiently understood, that
the signal itself is enough to engineer a change in tack by banks
lending and borrowers borrowing," Haldane said. Reuters(09 Dec.)