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Gfma : News on the global financial markets

27/02/2012 GFMA
  Morning Bell   
   

G-20 officials say euro-zone rescue fund must be increased
Finance ministers from the Group of 20 nations are calling to bolster the size of the euro-zone's rescue fund. But German Finance Minister Wolfgang Schaeuble warned that the European sovereign-debt crisis won't be resolved by increasing the fund or printing more money. "Economic stimulus is ineffective in the face of major structural shortcomings," Schaeuble said. "The strategy of piling up more debt will stunt rather than stimulate growth in the long run." Financial Times(tiered subscription model)(26 Feb.), The Wall Street Journal/Dow Jones Newswires(25 Feb.), The Telegraph (London)(26 Feb.)

Currency volatility remains a concern among G-20 leaders
Officials attending the weekend's Group of 20 meeting discussed their concerns about volatility in currency markets, but the issue wasn't the focus. "The debate has been dominated by euro-zone issues, but currency volatility has been discussed and may be included in the communique along with high oil prices," said one G-20 official. "The yuan and the yen were not specifically discussed. The yen's fall lately is seen as normal. So currencies were not at centre stage." The Wall Street Journal/Dow Jones Newswires(26 Feb.)

  Industry News   
   

Transaction tax would hit asset management hard, group warns
An industry group estimated that if the EU's proposed tax on financial transactions were in place last year, it would have cost the asset-management industry about €38 billion. Financial Times (tiered subscription model)(26 Feb.)

Volbroker paves the way for a currency-volatility index
Volbroker, a platform for trading foreign exchange options, is starting to publish information about the volatility of seven currency pairs. The move clears the way for a volatility index for currencies. "By creating an independent, reliable reference point that the market can rely on, products such as volatility indexes and cash-settled forward-volatility agreements can be created and expanded," said Terry Benson, Tradition-ICAP's global head of business development. Financial News Online (U.K.) (subscription required)(27 Feb.)

 

 

  Regulatory Roundup 
 
  • 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.)

 

  Spotlight on China 

 

  AFME News 
  • Bank of England's Andrew Haldane will speak at GFMA LEI conference
    GFMA is hosting the Building 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 regulationdriving 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 Rossand JC Flowersshare their views on key issuesfacing this unprecedented reallocation of capital. See further details, or book your place.