GFMA: News on the global financial markets
26/10/2011 GFMA
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EU financial institutions are concerned about IFRS
9 implementation
European banks and insurers said it is premature to set a date for
introducing new accounting standards for financial instruments,
known as International Financial Reporting Standards 9, before the
rules are finalised. The International Accounting Standards Board
wants to defer IFRS 9 by two years, but the industry wants more
time after the standards are complete to adopt the changes.
Global Financial Strategy(25 Oct.)
Indian lenders need recapitalisation, central bank
says
The Reserve Bank of India said it will issue detailed guidelines on
recapitalisation of lenders, saying the move is necessary to meet
Basel III capital-adequacy ratios. "While at present, at the system
level, banks in India are adequately capitalised, and transition to
Basel III is expected to be smooth, careful capital planning would
be required by banks in view of substantially higher equity
requirement in capital," the central bank said. The Economic Times (India)/Press Trust of
India(25 Oct.)
Nasdaq OMX reportedly plans derivatives platform in
London
Nasdaq OMX Group plans to establish a derivatives-trading platform,
sources said. The move marks an attempt by CEO Robert Greifeld to
gain a trading foothold in London. Financial Times (tiered subscription model)(25
Oct.)
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Basel Committee eases bank-capital rules to help
trade finance
The Basel Committee on Banking Supervision said it has eased parts
of its capital rules for banks in response to lenders' concerns
that the provisions might hurt international trade. "The agreed
changes will improve the access to and lower the cost of trade
finance instruments for low income countries," according to the
committee. Financial Times(tiered subscription model)(25
Oct.), Bloomberg Businessweek(25 Oct.), Reuters(25 Oct.)
ECB might stop trading derivatives with US
counterparties
The European Central Bank sent a letter to the US Commodity Futures
Trading Commission seeking exemptions from certain elements of the
Dodd-Frank Act related to clearing, execution and reporting of
over-the-counter derivatives. Without such exemptions, the ECB, and
other central banks, might have to stop trading OTC derivatives
with US counterparties, according to the letter. Risk.net (subscription required)(25 Oct.)
FSA doesn't understand firms it supervises,
industry says
The UK Financial Services Authority lacks know-how to effectively
supervise firms under its jurisdiction, industry executives told
Parliament's treasury committee. "The biggest thing we suffer from
is they do not understand our business model and throw a whole
series of regulation at us which are irrelevant and add to cost,"
said Philip Warland, head of public policy at Fidelity. Reuters(25 Oct.)
Switzerland moves to align capital rules with Basel
III
Switzerland's finance ministry is working to align national capital
rules for banks with the Basel III rules. "The over 300 banks in
Switzerland are affected to different extents depending on their
current capital base and their diverging business models," the
ministry said. UBS and Credit Suisse would be most affected.
Reuters(24 Oct.)
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Hong Kong voices concerns about OTC derivatives
reforms
Edmond Lau, CEO of the Hong Kong Monetary Authority, voiced
concerns about global coordination of over-the-counter derivatives
reforms. Hong Kong is committed to overhauling regulation but
"cannot be the leader" in the process because of the size of its
market, Lau said. Global Financial Strategy(25 Oct.)
Industrial and Commercial Bank of China and its three largest domestic rivals are expected to post significant gains for the third quarter. However, analysts said the profit increases likely won't lift the banks' valuations, which are close to record lows. "Chinese bank shares are unlikely to rally in the foreseeable future, or at least in the rest of the year, given the uncertainties not only in China but also those globally," said Wilson Li, an analyst at Guotai Junan Securities.