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
Shadow Banking
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
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”.
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).
Covid-19 crisis resurrects shadow bank concerns
With the world once again in crisis, this time due to the Covid-19 pandemic, supervisory attention is turning to shadow banks for fear they might be harbouring hidden systemic risks.
US regulators have under-estimated systemic threat from shadow banks
Regulators have underestimated the risks posed by leverage in trading books and in non-banks as well as by interconnectedness and should investigate this area once the current crisis passes, wrote a former US Treasury official.
Shadow banks' pace of growth slows substantially
Under a narrow measure, shadow banks grew their assets by 1.7% to $50tn last year, significantly slower than the 2012-17 average annual growth rate of 8.5%, said the Financial Stability Board (FSB).
FSOC rebuked over characterisation of non-bank mortgage companies
In a rebuke of the Financial Stability Oversight Council’s (FSOC) characterisation of non-bank mortgage companies as a threat to financial stability, consultant Christopher Whalen wrote that their riskiness is overstated.
Regulators still face steep learning curve on implications of bigtechs
Bigtech firms are not just a worry for incumbent banks, but are also a source of concern for regulators in terms of their impact on financial stability leading to individual supervisors to take their own approaches towards managing the risk.
Trade war threatens pace of China’s regulatory reforms
In the last few years, China has embarked on a concerted effort to curb the excesses of its shadow banking system, but the trade war with the US may slow or even threaten those aims.
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