Analysis: Collateralisation could
become source of problems Collateralisation is intended to bolster the safety
and stability of the financial system. However, according to this
analysis by The Economist, some recent innovations and the
expansion of others could make the drive toward increased
collateralisation a source of issues.The Economist(25 Feb.)
Geithner says market making likely
will be OK under Volcker rule US Treasury Secretary Timothy Geithner said the
Volcker rule, which bans proprietary trading at major banks, likely
will allow market making. Geithner said he is confident that
regulators will be able "to do what the law requires -- that as we
are limiting the risk these large institutions pose to the world,
could pose in the future -- we're preserving well-designed,
carefully constructed exceptions for market-making hedging, as the
law intended". Other finance officials from the Group of 20 nations
also voiced optimism that the Volcker rule will be adjusted as US
officials consider concerns from foreign governments.Bloomberg(24 Feb.), Reuters(27 Feb.)
Volcker rule should exempt foreign
sovereign debt, Citigroup says Manuel Medina-Mora, head of global consumer banking
at Citigroup, said regulators should exempt foreign sovereign debt
from the Volcker rule. Medina-Mora warned that the rule, which
exempts US government debt, likely will hinder liquidity of foreign
sovereign debt. "Implementation of the rule as it is today will
have an impact on monetary policy around the world," he
said.The Wall Street Journal(26 Feb.)
ECB's loan programme is expected to
buy officials time The European Central Bank is poised this week to
offer banks inexpensive three-year loans, which are expected to
give Europe's politicians more time to resolve the sovereign-debt
crisis. A survey of economists found that banks are expected to tap
the loan programme for about €492 billion. "I don't expect this
operation can solve all the problems, but hopefully it will take us
past the worst point of the crisis," said Riccardo Barbieri, Mizuho
International's chief European economist.CNBC/Reuters(26 Feb.), The Wall Street Journal/The Euro Crisis blog(24
Feb.)
Bank of Israel's Fischer warns about
complacency Stanley Fischer, governor of the Bank of Israel and a
mentor for other central bankers, said he is worried complacency
could expose the world to additional threats. "Nobody should be
relaxing at this stage," Fischer said. "It's important that we keep
asking what can go wrong next, because something will go wrong
somewhere, sometime, and it's important to try to anticipate where
and what it might be."Bloomberg(23 Feb.)
Bank of England's Andrew Haldane will
speak at GFMA LEI conference GFMA is hosting theBuilding a Global Legal Entity Identifier Solution
Symposiumon 14 March at the SIFMA Conference Center in New
York. The symposium will feature keynote speaker Andrew Haldane,
executive director of financial stability at the Bank of England.
Haldane and other senior-level industry professionals will address
global policy, regulation and business implementation issues facing
the financial-services industry as we all converge on standing up a
global LEI infrastructure. Seminar programme topics include ISO
Standard 17442, registering for an LEI, LEI global adoption, the
LEI governance framework, benefits to the industry and regulatory
communities, and US Community Futures Trading Commission reporting
requirements. Be sure your firm knows what lies ahead for LEIs.
Register!
AFME announces new event: Investing in
Distressed Bank Assets Conference -- 15 March in
London
As focus increases on European banks' mass deleveraging of more
than €1 trillion in assets, and their need to raise capital,
leading investors will come together with the Bank of England, the
US Federal Deposit Insurance Corp and European regulators -- and
the most experienced advisers in the market -- to talk
strategy, structuring, pricing and regulation
driving these deals. Join us at the Royal College of Surgeons in
London to hear thought leaders from Kohlberg Kravis
Roberts, Oaktree Capital Management, Taconic Capital Advisors, WL
Ross and JC Flowers share their views on
key issues facing this unprecedented reallocation
of capital. See further details, or book your place.
