EU banks could increase their carry trades in response to new rules insulating them from reporting fair value in response to movements in their sovereign bond holdings, according to a report from Fitch Ratings, with the risk that it could reinforce the sovereign-bank nexus that contributed to the last European sovereign debt crisis.

On July 31, the Hong Kong Monetary Authority (HKMA) announced its London interbank offered rate (Libor) transition milestones to alternative reference rates (ARRs) for financial institutions operating in the territory. 

The US-based central bank backed currency settlements service CLS has warned that the risk of settlement failures in the $6.6tn a day foreign exchange market are at their highest level ever due to the rapid growth and changing composition of the world’s biggest market.

Commissioners at the US Commodity Futures Trading Commission (CFTC) voted on July 22 to reduce oversight of derivatives trades to mostly US entities and passed a second vote on capital requirements for traders involved in bilateral swaps transactions. 

Companies will be allowed to raise capital through direct listings on the New York Stock Exchange (NYSE) following a ruling by the US Securities and Exchange Commission (SEC).

In its written statement to the UK parliament, Rishi Sunak, the chancellor (finance minister), said the government will use upcoming amendments to the financial services bill to give the Financial Conduct Authority (FCA) the power to manage the orderly transition from the London interbank offered rate (Libor) to alternative rates.