Latest articles from Staff

Regulators urged to look at fund leverage rather than size

Asset managers generally favour an activities-based approach to shadow banking regulation, but the industry is not unanimous, says Philip Alexander.

IASB to overhaul hedge accounting standards

LONDON – The International Accounting Standards Board (IASB) has kicked off the debate on its last major post-crisis accounting reform, which will radically change how firms account for derivative and other hedges.

Isdafix entrusted to ICE Benchmark Administration

LONDON – The International Swaps and Derivatives Association announced on April 30 that it has awarded management of the Isdafix swap benchmark to a division of US derivative exchange operator IntercontinentalExchange. The announcement follows investigations into the involvement of previous administrator ICAP in the Libor scandal.

Central banks back securitisation revival

FRANKFURT/LONDON – The European Central Bank (ECB) and Bank of England have teamed up to continue the regulatory rehabilitation of asset-backed securities (ABS) as a tool to finance European economic recovery. In a joint paper published in April 2014 and entitled The impaired EU securitisation market: causes, roadblocks and how to deal with them, the two central banks argued that securitisation, “if appropriately structured and regulated”, could strengthen wholesale funding for the real economy, including small and midsized enterprises (SMEs).

Industry steps up pressure on EU liquidity ratio

LONDON – Representatives of the European securitisation market have stepped up efforts to encourage the European Commission and European Banking Authority (EBA) to modify the proposed liquidity coverage ratio (LCR) under the EU’s Capital Requirements Directive (CRD IV). The industry’s concern revolves around the definition of high-quality liquid assets (HQLA), the assets that banks can hold as a buffer against a sudden freeze in funding markets.

European stress test scenarios outlined

LONDON – The European Banking Authority (EBA) has outlined the baseline and adverse scenarios that will be used in the stress test applied to banks in the eurozone this year. In addition, the Bank of England published idiosyncratic scenarios that it will apply to UK banks alongside the EBA tests.

William Coen to head Basel secretariat

BASEL – The Bank for International Settlements (BIS) has appointed William Coen, a US national, to succeed Wayne Byers as secretary general to the Basel Committee on Banking Supervision. Mr Byers is returning to Australia to become head of the country’s Prudential Regulation Authority.

Insurance capital standard will be confidential

BASEL – Julian Adams, the chair of the financial stability committee at the International Association of Insurance Supervisors (IAIS) has indicated that the key global ratio being developed will not be publicly disclosed. The basic capital requirement (BCR) is due to be drafted for nine globally systemically important insurers (GSIIs) by year-end 2014. This requirement would then be the foundation for higher loss absorbing capital (HLA) to be introduced by 2019.

US looks at hard numbers on money funds

WASHINGTON – The asset management industry has welcomed efforts by the US Securities and Exchange Commission (SEC) to undertake in-depth quantitative research on the country’s money market funds sector. The SEC proposed reforms to money market fund regulation in June 2013.

Europe launches insurance stress test

FRANKFURT – The European Insurance and Occupational Pensions Authority launched a stress test for EU insurers on April 30, 2014. The stress test will be part of the process to prepare companies for the advent of Solvency II capital charges. Insurers will need to submit their data to national supervisors by July 11, 2014, with results being disclosed in November 2014.