The Basel Committee on Banking Supervision introduced the countercyclical capital buffer (CCyB) policy as part of the Basel III reforms. The countercyclical capital buffer aims to ensure that banking sector capital requirements take account of the macro-financial environment in which banks operate. Its primary objective is to use a buffer of capital to achieve the broader…
Central Clearing and Liquidity Governor Jerome H. Powell At the Federal Reserve Bank of Chicago Symposium on Central Clearing, Chicago, Illinois — Having pushed for the move to greater central clearing, global authorities have a responsibility to ensure that CCPs do not themselves become a point of failure for the system. The progress I have…
Anyone who has a savings account, has taken out a mortgage, or has been part of a business seeking new capital has relied on the smooth functioning of the institutions and markets that collectively perform financial intermediation. Because financial intermediation is so critical to the functioning of a modern economy, it is important to understand…
The nation’s largest bank holding companies have strong capital levels and retain their ability to lend to households and businesses during a severe recession, according to the results of supervisory stress tests released Thursday by the Federal Reserve Board. The most severe hypothetical scenario projects $383 billion in loan losses at the 34 participating bank…
The International Capital Market Association (ICMA) has today published a study entitled ‘The European Credit Repo Market: The cornerstone of corporate bond market liquidity’ which explores and describes the state and evolution of the European corporate bond repo and securities lending market (the ‘credit repo market’). This study builds on ICMA’s previous work with respect to…
The Fed’s December 2015 decision to raise interest rates after an unprecedented seven-year stasis offers a chance to assess the link between interest rates and bank profitability. A key determinant of a bank’s profitability is its net interest margin (NIM)—the gap between an institution’s interest income and interest expense, typically normalized by the average size…
From Bloomberg: Europe’s impending ban on free research will cost hundreds of analysts their jobs with banks set to cut about $1.2 billion of investment on the area, according to a report by McKinsey & Co. The consultancy estimates the $4 billion that the top-10 sell-side banks currently spend on research annually is likely to…
This paper addresses the trade-off between additional loss-absorbing ca- pacity and potentially higher bank risk-taking associated with the introduc- tion of the Basel III Leverage Ratio. This is addressed in both a theoretical and empirical setting. Using a theoretical micro model, we show that a leverage ratio requirement can incentivise banks that are bound by…
Clearstream, together with Euroclear Bank, offers improved settlement activity on the Bridge. Thanks to enhanced interoperability between the two international central securities depositories (ICSDs), customers can enjoy a much faster turnaround for Bridge settlement, and extended timeframes in which to carry out their trades for all Bridge-eligible securities. Further information is available at http://www.clearstream.com/blob/90700/7532f04032a4882c701234d7e5555d9e/spotlight-bridge-enhancement-data.pdf
Pirum is delighted to be able to confirm its collaboration with the Wematch Securities Financing platform. The agreement will allow mutual clients to execute trades on wematch.securitiesfinancing and manage their post-trade processes through Pirum. It will also provide the basis for wematch.securitiesfinancing clients to comply with transaction reporting obligations via Pirum’s existing partnership with IHS…
Broadridge Financial Solutions, Inc. (NYSE: BR) today announced the launch of its trade reporting solution for the European Securities and Markets Authority’s (ESMA) forthcoming Securities Financing Transaction Regulation (SFTR). Broadridge’s new offering will enable market participants of all types to achieve a seamless implementation and meet the projected regulatory deadlines in 2018. SFTR requires EU…
LONDON, June 19, 2017 /PRNewswire/ — Clearstream, the international central securities depository (ICSD), and ColleX the collateral exchange platform, announced today a collaboration that brings together ColleX’s visible pricing and liquidity for secured lending transactions with Clearstream’s simplified collateral management services. With the introduction of the Clearstream Repurchase Conditions (CRC), Clearstream has greatly simplified tri-party repo and…
The European Securities and Markets Authority (ESMA) has published today a consultation paper regarding its draft technical standards specifying the trading obligation for derivatives under the Markets in Financial Instruments Regulation (MiFIR). MiFIR’s trading obligation will move over-the-counter (OTC) trading in liquid derivatives onto organised venues thus increasing market transparency and integrity alike. MiFIR, which implements parts of…
The Financial Stability Board (FSB) today published for public consultation draft Supplementary Guidance to the FSB Principles and Standards on Sound Compensation Practices regarding the use of compensation tools to address misconduct. The proposed guidance has been developed in collaboration with the standard-setting bodies and it supplements the Principles and Standards that note that compensation should be…
NEW YORK, NY (June 19, 2017) – Tradeweb Markets, a leading global provider of fixed income, derivatives and ETF marketplaces, announced that the Dealerweb marketplace for U.S. repurchase agreements (repo) has grown to capture 18% market share of inter-dealer trading since launching a fully electronic central limit order book in June of 2016, based on…
The European Securities and Markets Authority (ESMA) has issued today its most recent iteration of its Risk Dashboard, covering risks in the EU’s securities markets for 1Q2017. ESMA’s overall risk assessment remains unchanged from 4Q16 at high levels. In 1Q17, EU financial markets remained relatively calm with stable volatility and increasing equity market prices. EU sovereign…
New York, London and Hong Kong, June 14, 2017 – Hazeltree, the leading provider of integrated buy-side treasury management solutions, today announced a new whitepaper exploring the importance of metrics-based management of counterparties while ensuring a win-win relationship with each counterparty. The paper analyzes the role active counterparty management plays in protecting assets, facilitating stable…
SIX Securities Services has enhanced its tri party offering by adding US Equity and Fixed Income securities for financing on the CO:RE Repo trading platform and for general tri-party collateral management. Apart from the Swiss National Bank’s (SNB) high-quality liquid asset baskets (HQLA), which are traded as the market standard on the CO:RE trading platform…
Fixed income markets are undergoing significant change, both in market structure and liquidity. Impending regulatory reform coupled with an increased focus on greater transparency and efficiency around trading costs are driving demand for performance measurement tools that help investment firms evaluate the quality of their execution and prove best execution, such as Transaction Cost Analysis….
The Board of the International Organization of Securities Commissions today published IOSCO Task Force Report on Wholesale Market Conduct, which describes the tools and approaches that IOSCO members use to discourage, identify, prevent and sanction misconduct by individuals in wholesale markets. Wholesale markets are an important source of finance for companies and economic growth. Misconduct by individuals…
Asian institutions have been overwhelmed by the breadth and scope of sweeping changes to Europe’s financial rules due in January, according to an industry group. The law, known as MiFID II, threatens to upend everything from trading to research distribution, jolting firms in the region that are already burdened by a recent focus on other cross-border…
Completing the Capital Markets Union: Building on the first round of achievements Brussels, 8 June 2017 Completing the Capital Markets Union: Building on the first round of achievements Today the Commission is taking further steps to drive forward the Capital Markets Union (CMU), a pivotal project of the Juncker Commission to boost jobs and growth in…
Press release from the US House of Representatives Financial Services Committee: The House on Thursday passed the Financial CHOICE Act, legislation to overhaul and replace the failed Dodd-Frank Act that has contributed to the worst economic recovery of the last 70 years. “Every promise of Dodd-Frank has been broken,” said Financial Services Committee Chairman Jeb…
From US House bill H. R. 2319: “(b) Election To Be A Stable Value Money Market Fund.— “(1) IN GENERAL.—Notwithstanding any other provision of this title, any open-end investment company (or a separate series thereof) that is a money market fund that relies on section 270.2a–7 of title 17, Code of Federal Regulations, may, in the prospectus…
The European Securities and Markets Authority (ESMA) has added 14 new Q&As to its Questions and Answers (Q&A) document on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR). The new Q&As cover the topics of ‘information on costs and charges’, ‘post-sale reporting’, and ‘appropriateness’. The overall MiFID…
Most rms executing transactions with, or on behalf of clients engaged in dividend arbitrage, appear to comply with our requirements. However, a small number of rms may not have undertaken a su ciently detailed assessment of the purpose and nature of transactions that appear to be linked to WHT reclaims. This raises the risk that…
LONDON–(BUSINESS WIRE)–IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today announced the launch of Collateral Manager, an end-to-end solution for calculating margin, settling margin calls and managing margin disputes. New regulation requires the mandatory exchange of variation and initial margin for cleared and uncleared OTC derivatives transactions. In response, financial institutions…
High up in a New York City skyscraper, China’s biggest bank is playing in the shadows of American finance. The prize for Industrial & Commercial Bank of China Ltd. isn’t stocks, bonds or currencies. It’s the grease in the wheels of all those markets: repurchase agreements. By exploiting a loophole in rules intended to keep…
Global banks are facing a new challenge in their Asia-Pacific trading businesses from an unexpected direction — EU markets rules that are forcing change in dealing rooms from Singapore to Hong Kong to New Delhi. Banks and asset managers in the EU have spent years preparing for the EU investor protection rules known as Mifid 2 that…
DTCC will align its Global Trade Repository (GTR), Trade Information Warehouse (TIW) and DTCC-Euroclear GlobalCollateral Ltd. businesses under a single portfolio led by Christopher Childs, Managing Director and head of Derivatives and Collateral as well as CEO of Deriv/SERV. Mr. Childs will also report to Mr. Keady. Mark Jennis, Executive Chairman of DTCC-Euroclear GlobalCollateral, Ltd.,…
Risk and collateral management – fit for the new clearing landscape with growing volumes and versatile scope of cleared contracts Cinnober announces the launch of a stand-alone risk management solution dedicated to the needs of central clearing counterparties (CCPs). The post-financial crisis regulations, including Basel III, EMIR and Dodd Frank, have transformed the landscape for…
The European Securities and Markets Authority (ESMA) has published today two sets of guidelines providing further details on the implementation of the Central Securities Depositories Regulation (CSDR). Both guidelines are accompanied by reporting templates in order to facilitate the reporting of data by CSDs to the competent authorities, and subsequently by the competent authorities to…
The European Securities and Markets Authority (ESMA) opened today a public consultation on future guidelines, which further clarify provisions stemming from the European Market Infrastructure Regulation (EMIR). ESMA’s consultation asks stakeholders feedback on a set of proposed provisions regarding the management and avoidance of conflicts of interests by central counterparties (CCPs). Under EMIR, CCPs have to…
New service streamlines dealer and client trade flows via RFQ trading protocol Full client audit trail for proof of best execution Integrated with current trading software for STP connectivity LCH Ltd signs as first buy-side trading client MTS, one of Europe’s premier fixed income trading venues, has launched its new dealer-to-client (D2C) Global Collateral Management…
NEW YORK, May 31, 2017 /PRNewswire/ — The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) has formed a wholly-owned subsidiary, BNY Mellon Government Securities Services Corp., designed to further enhance capabilities, governance, transparency and resiliency in the U.S. government securities clearance and U.S. tri-party repo businesses. BNY Mellon Government Securities Services will be headquartered in New York….
The European Securities and Markets Authority (ESMA) has published an Opinion setting out general principles aimed at fostering consistency in authorisation, supervision and enforcement related to the relocation of entities, activities and functions from the United Kingdom. The opinion is addressed to national competent authorities (NCAs), in particular of the 27 Member States that will…
Broadridge believes there could be an application for blockchain technology in certain areas of the securities finance lifecycle. The full article behind the paywall is here.
The European Commission has welcomed tonight’s agreement to revive the EU’s securitisation market, in a move that will broaden investment opportunities for investors and boost lending to Europe’s households and businesses. Late on Tuesday, the European Parliament, the Council and the Commission agreed on a package that sets out criteria for simple, transparent and standardised…
China’s regulator has penalised three of the country’s largest brokers, blaming them for their role in the 2015 stock market crash, in the first official account of a rout that wiped out US$5 trillion of market value in a few weeks since mid June that year. Leading mainland brokerages Citic Securities and Haitong Securities, together…
Here’s another reminder, this time from New York Fed staffer Lorie Logan: While the Federal Reserve plans to cut the size of its balance sheet, it probably won’t end up shrinking that much. Even before the Fed addresses the tougher questions — how it wants to control interest rates, and who it wants to trade with —…
Securities Lending Times and Global Investor/ISF both reported that David Raccat, formerly of BNPP and J.P. Morgan, has launched a new securities finance disintermediation platform, Wematch.SecuritiesFinancing. Securities Lending Times reports Raccat as saying “The platform is driving the securities financing markets into the new world where best execution, liquidity, price discovery, and regulatory reporting will…
Regulatory reforms since the financial crisis have sought to make the financial system safer and severe financial crises less likely. But by limiting the ability of regulated institutions to increase their balance sheet size, reforms—such as the Dodd-Frank Act in the United States and the Basel Committee’s Basel III bank regulations internationally—might reduce the total…
FinTech platforms account for an increasing share of credit provision and policymakers have to consider the opportunities and risks such activity brings, a new report by the Committee on the Global Financial System (CGFS) and the Financial Stability Board (FSB) finds. The report analyses the nature of FinTech credit and finds wide variation in the business models…
Ledger Holdings, parent company of bitcoin options exchange LedgerX, closes $ 11.4 Million in Series B financing. Led by Miami International Holdings Inc. and Huiyin Blockchain Venture Investments, this funding supports LedgerX’s plan to operate a regulated exchange and clearing house for bitcoin and other digital currencies. “In the short term, these investments will further…
The European Securities and Markets Authority (ESMA) has issued today an opinion regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). The opinion clarifies the concept of “traded on a trading venue” (TOTV), which is relevant for a number of provisions under MIFID II and MiFIR. The concept of TOTV is…
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today approved the creation of LabCFTC, a new initiative aimed at promoting responsible FinTech innovation to improve the quality, resiliency, and competitiveness of the markets the CFTC oversees. Located in New York LabCFTC will also look to accelerate CFTC engagement with FinTech and RegTech solutions that…
Santiago, Chile – 17 May 2017: IBM (NYSE: IBM) and Chile’s Santiago Exchange, the largest in the country, today announced a partnership to introduce blockchain technology across the country’s financial sector. The agreement makes the Santiago Exchange the first stock market in Latin America to apply IBM Blockchain technology within its short selling system for securities lending….
Bloomberg: Senate Majority Leader Mitch McConnell said he’s pessimistic Congress will overhaul the Dodd-Frank Act because he doubts Republicans can secure enough Democratic votes to make major changes to the sweeping legislation that tightened oversight of banks after the financial crisis. “I’d love to do something about Dodd-Frank, particularly with regard to community banks but that…