Gfma : News on the global financial markets

20/01/2012 GFMA

EU should scrap deadline for OTC derivatives reforms, groups say
AFME and other industry groups said the European Securities and Markets Authority doesn't have sufficient time to properly consult and implement rules governing the over-the-counter derivatives market. The groups encouraged the EU to postpone the deadline for reforms. Global Financial Strategy(18 Jan.)

Banks need bespoke accounting rules, BoE official says
Andrew Haldane, executive director for financial stability at the Bank of England, said bespoke accounting rules are needed to clarify the value of assets held on banks' books. Banks' bookkeeping rules exacerbate regulatory and investor uncertainty, Haldane said. Instead, rules need to recognise differences between banks and other kinds of businesses. "A distinct accounting regime for banks would be a radical departure from the past," he said. "But if we are to restore investor faith in banking-sector balance sheets, nothing less than a radical rethink may be required." Reuters(19 Jan.)

Moody's warns further cuts to major banks' ratings are likely
Moody's Investors Service said it likely will further downgrade credit ratings of global investment banks and European lenders. "The expected decline of bank ratings reflects the acceleration of interrelated pressures on the banking sector since the second half of 2011," said Greg Bauer, managing director of global banking. "These pressures most immediately affect global capital markets intermediaries and European banks." Reuters(19 Jan.)
- 3 European lenders face fresh wave of challenges
  Spain's Bankia, Germany's Commerzbank and Italy's Banca Monte dei Paschi di Siena are facing issues despite recently tapping markets for cash. Their woes are expected to make investors more reluctant to bet on European lenders, insiders said. "It's extremely difficult to make a rational call as to whether some of these banks are investible," said Ian King, head of international equities at Legal & General Asset Management. The Wall Street Journal(20 Jan.)
- US banks' exposure to Europe remains unclear
  Morgan Stanley, Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and other large US banks have released fourth-quarter earnings, but details about their exposure to European sovereign debt remain incomplete. Some of the banks included detailed information about their exposure, while others provided no data. The Securities and Exchange Commission recently warned about inconsistent disclosure of European exposure and asked banks to provide a detailed breakdown. The Wall Street Journal(19 Jan.)

Cameron plans to cap bonuses at state-backed banks
British Prime Minister David Cameron outlined plans to limit bonuses at state-backed financial institutions, saying cash rewards in the financial sector have gotten "out of control". Next week, the coalition government plans to explain its proposal for curbing executive compensation, Cameron said. Reuters(19 Jan.), The Wall Street Journal(19 Jan.)