GFMA: News on the global financial markets

EFSF postpones €3 billion bond issue
The European Financial Stability Facility said market volatility prompted it to postpone a €3 billion bond issue. The deal was expected this week, but Greece's decision to hold a referendum on euro-zone aid caused market turmoil. The Wall Street Journal (tiered subscription model)(03 Nov.)

EU's plan to recapitalise banks will hurt growth, group says
Charles Dallara, managing director of the Institute of International Finance, said in a letter to Group of 20 leaders that there is a "clear need" to restore investor confidence in European banks. However, he argued that the EU's recapitalisation plan for lenders has "serious problems". The plan will make it more difficult for some countries to borrow and will hinder economic growth, Dallara wrote. Bloomberg(02 Nov.)

NYSE will meet with EU regulators about proposed merger
NYSE Euronext CEO Duncan Niederauer said the company is scheduled to meet next week with European regulators to discuss its proposed merger with Deutsche Boerse. Niederauer said negotiations to resolve issues related to competition have been "very constructive, very open". Financial Times (tiered subscription model)(02 Nov.), Reuters(02 Nov.), The Wall Street Journal (tiered subscription model)(02 Nov.)

European banks need to rethink risk appetite, expert says
Christian Sewing, chief credit officer at Deutsche Bank, said European banks need to align their business models with investors' risk appetite. Sewing said Deutsche Bank has worked to reduce a mismatch between its risk appetite and that of investors. "We realised more and more that we needed to understand the liquidity and the funding base of the bank, including what our investors wanted to achieve and what it meant for us," he said. Risk.net (subscription required)(02 Nov.)

Regulatory Roundup

US regulators ramp up focus on MF Global
The Securities and Exchange Commission is investigating whether MF Global Holdings and CEO Jon Corzine made misleading comments about the investment that caused the company's collapse, sources said. Meanwhile, the US Commodity Futures Trading Commission told a bankruptcy court that MF Global is short $633 million in customer segregated funds. Regulators are increasing their focus on the firm, which filed for bankruptcy this week, but they are also facing scrutiny about their roles. However, they had been voicing concerns about MF Global for months. The Wall Street Journal (tiered subscription model)(03 Nov.), Bloomberg Businessweek(03 Nov.), Reuters(02 Nov.), The New York Times (tiered subscription model)/DealBook blog(02 Nov.)

Basel Committee proposes capital rules for CCP exposure
The Basel Committee on Banking Supervision proposed requiring banks to hold capital covering exposure to central counterparties. Critics said the proposal clashes with a push to clear derivatives. Financial Times (tiered subscription model)(02 Nov.)

Basel III pits regulators against bankers
Group of 20 leaders are expected to endorse the Basel III capital and liquidity rules, which bankers have said will hinder economic growth and limit credit. Financial Times (tiered subscription model)(02 Nov.)