Latest articles from Staff

FDIC has unfinished business says Hoenig

WASHINGTON DC – Six years after the crisis, and nearly four years after the enactment of the Dodd-Frank Act, Thomas Hoenig, vice-chairman of the Federal Deposit Insurance Corporation has said that much remains undone.

Fed faces quandary on interest rates

ARLINGTON, VIRGINIA – US Federal Reserve governor Daniel Tarullo has stressed the importance of systemic risk in the current quandary over US interest rates.

FSB’s Carney sets ambitious G-20 targets

BASEL – Just days before the 23 February announcement of G-20 plans to increase GDP by 2% above current trends and add about $2000bn in real terms to global GDP over the next five years, Mark Carney, chairman of the Financial Stability Board (FSB), wrote to finance ministers and central bank governors soberly reminding them just how lengthy the list of unfinished regulatory reforms is.

Swift response to Greek stress test

ATHENS – Greek banks reacted rapidly to the publication of a stress test conducted by BlackRock Solutions, Rothschild and EY for the Bank of Greece. The baseline scenario for the stress test, calculated using capital levels as at June 30, 2013, indicated capital needs of €262m for Alpha Bank, €425m for Piraeus, €2.18bn for National Bank of Greece (NBG) and €2.95bn for Eurobank. The last of these is already under full state control, with a capital injection of €2bn planned.

G-20 gets mixed five-year report card

BRUSSELS – Five years after the 2009 crisis meetings held in London, G-20 countries have already largely delivered on the so-called ‘London commitments’, concluded KarelLannoo in a detailed report by the Centre for European Policy Studies (CEPS).

Slipping deadlines for EU money market funds reform

BRUSSELS – The timeline for the European Parliament to consider new regulations for money market funds (MMFs) continues to slip, raising the risk that this legislation will be delayed until after European elections in May 2014. Parliament’s economic and monetary affairs committee (ECON) has already agreed to make as much progress as possible on the regulation of financial benchmarks, but leave the final vote until after May.

UK proposals startle foreign banks

LONDON – The Bank of England’s Prudential Regulatory Authority (PRA) has published a consultation paper on its supervision of international banks in the UK, and especially those from outside the European Economic Area (EEA). The PRA proposed introducing a rule requiring “that non-EEA firms take all steps within their control to have adequate provision made in resolution plans for UK branches. The purpose of this draft rule is to support the policy by which the PRA will assess the adequacy of the home state authority’s resolution planning in terms of its potential impact on UK financial stability”.

Financial Stability Board enters FX investigation

BASEL – The Financial Stability Board (FSB) has announced a review of the use of benchmarks in the foreign exchange (FX) markets, as investigations in the US and Europe into their alleged manipulation gather pace. A number of FX traders at major global banks, together with one official from the Bank of England, have so far been suspended since investigations started in 2013. This follows a round of multibillion-dollar fines over the manipulation of Libor interest rate benchmarks during 2012 and 2013.

European regulators upbeat on benchmark reform

PARIS/LONDON – The European Securities and Markets Authority (ESMA) and European Banking Authority (EBA) have published a joint review highlighting “significant progress” made by the industry to reform the European interest rate benchmark Euribor. ESMA and the EBA made recommendations in January 2013 for “addressing weaknesses and shortcomings in its governance and technical framework” following investigations into the rigging of interest rate indices.

Russian state-owned banks face Ukraine risks

LONDON – Ratings agency Fitch warned that Russian state-owned banks have significant exposure to Ukraine, as tension between the two countries deepens over the future of Crimea. Fitch senior director Alexander Danilov believes that about half the exposure is in the form of local lending by Ukrainian subsidiaries, which are mostly parent-funded. A further 25% comes from acquisition finance for Ukrainian and Russian businessmen to buy assets in Ukraine.