Shadow BankingRSS

OCC chief compares DeFi to rise of CDSs

Crypto-assets and decentralised finance (DeFi) have uncanny similarities with the rise of credit default swaps (CDS) in the early 2000s, said acting comptroller of the currency Michael Hsu. 

Jouni Aaltonen

‘Shadow banks’ criticise EBA consultation as “overkill”

The European Banking Authority is consulting on what constitutes a shadow bank for the purpose of reporting large exposures, as the fallout from the Covid-19 pandemic has global regulators assessing the degree to which they should regulate shadow banks. 

Fed’s growing reliance on money market funds could prove destabilising

The way the US Federal Reserve funds itself has been undergoing a quiet revolution since the 2007-9 global financial crisis (GFC) according to the Bank Policy Institute, with it becoming increasingly reliant on money market funds, with potentially negative consequences for financial stability.

Monique Melis

Greensill failure puts bank interactions with NBFIs under the spotlight

The meltdown of Greensill Capital and Archegos Capital Management is putting pressure on financial regulators to widen their scope and pay closer attention to banks like Credit Suisse cosying up to shadow banks for business. 

Greensill

Supply chain finance likely to face more regulatory scrutiny following Greensill demise

Supply chain finance (SCF), or reverse factoring, is likely to come under greater scrutiny following the failure of Greensill Capital with regulators and accounting bodies in particular thinking more about transparency, according to Fitch Ratings. 

Big tech

Big techs may need special rules if they move into finance

Firms with varying business models face particular operational risks and therefore may need to be subject to tailored regulations and supervision

Rick Seehra

FCA fleshes out IFPR priorities in consultation

The Financial Conduct Authority’s (FCA) first consultation papers on the Investment Firms Prudential Regime (IFPR) was published on December 2020, focusing on the areas the regulator feels will need the most preparation. Given the quantity and complexity of the new requirements, firms are recommended to plan for the regime as soon as possible. By Rick Seehra and Jackie Domanska at Bovill

European open-ended funds showed resilience during March market volatility

Open-ended type funds in Europe did a good job managing the market turmoil caused by the Covid-19 pandemic in March 2020

Nellie Liang

Shadow banks face tougher rules following Covid-induced volatility

Global regulators have long kept an eye on the shadow banking sector from afar and warned that it may be a source of systemic risk, but the pandemic-driven market turmoil in March was a tipping point. The Financial Stability Board is now calling for firm action to “strengthen the resilience of non-bank financial intermediation”. 

Marc-Andre Bechet

Luxembourg fund industry faces up to Covid-19 and Brexit challenges

Luxembourg’s large fund management industry is having to adapt to significant new challenges, ranging from the fallout of the Covid-19 pandemic through to Brexit. By Marc-André Bechet, director legal & tax at the Association of the Luxembourg Fund Industry (ALFI).