July 21, 2011: Wall St. Makes Fallback Plans for Debt Crisis [NEWSLETTER]

July 21, 2011

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ISDA Marks First Anniversary Of Dodd-Frank Act: Clearing, Transparency Drive Improvements In OTC Derivatives Markets
Press Release
NEW YORK, Thursday, July 21, 2011 – At the first anniversary of the Dodd-Frank Act, market participants, policymakers and others are assessing the safety of the over-the-counter (OTC) derivatives markets in light of the legislation as well as efforts the industry has undertaken over the past few years in conjunction with global regulators. The International Swaps and Derivatives Association, Inc. (ISDA) believes the markets are safer and more efficient today, as evidenced by the following:

1) More OTC derivatives are being cleared.

2) The industry continues to reduce the level of notional outstanding through its compression efforts.

3) ISDA and the industry have selected vendors to act as trade repositories for all the major asset classes to report trade activity to global regulators.

"ISDA strongly supports efforts to make the OTC derivatives markets safer and more efficient," said Conrad Voldstad, ISDA chief executive officer. "With regard to Dodd-Frank, we believe its implementation should be centered initially on safety and soundness issues. Let's finalize the clearing rules and get the
trade repositories in place."

ISDA believes that regulations that dramatically change the method of executing business should be done carefully and over time. It is the proposed rules regarding electronic execution and extraterritoriality that most concern users and dealers alike. ISDA is not convinced the costs imposed by the rules and the likely resulting reduction in liquidity are justified at this time, especially since imposition of these requirements will likely drive business to other jurisdictions.

**CN: See the full ISDA release here.


Related Stories:

US Deputy Secretary Of The Treasury, Neal Wolin, On The Dodd-Frank Act, One Year Later
On the one-year anniversary of enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Deputy Treasury Secretary will be on Capitol Hill this morning testifying before the Senate Banking Committee. He will focus on how Dodd-Frank’s core reforms are strengthening safeguards for consumers and investors, and providing the necessary tools for limitingrisk in the financial markets. "These reforms were an obligation, not a choice. Without them, we could not build the financial system we need—a financial system with the stability and the resilience necessary to support our economy and protect it in times of stress," Wolin says in submitted testimony. "Our country needs a financial system that is stronger and more robust, and also promotes innovation, fosters growth, and creates jobs—a system that channels capital effectively to businesses and to consumers."
http://jlne.ws/pxPj51

NCUA's Matz Cites Stronger, Safer Financial System
ALEXANDRIA, Va. (July 21, 2011) – National Credit Union Administration (NCUA) Board Chairman Debbie Matz commented at the start of today’s Board meeting about the first anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The comments of Chairman Matz follow:
“As we begin this Board meeting, I want to take a few moments to comment on the Dodd-Frank Act, which became law one year ago today. In reflecting on this milestone, we should remember why we needed to act to restore the public’s trust in our financial system and what has happened since the bill became law. Years of excess, greed, and financial mischief resulted in a severe financial crisis that took our economy into a deep recession. Americans were justifiably scared. We needed to change the rules for our financial markets by better protecting consumers, regulating the unregulated, and controlling Wall Street’s biggest institutions. The result was the Dodd-Frank Act. During the last year, NCUA has focused on completing the many credit union reforms required by this landmark law. It is therefore fitting that we will consider another mandated change at today’s Board meeting—the interim final rule on remittance transfers. In the last year, the Dodd-Frank Act has also begun to achieve its desired results of promoting a stronger, safer, more stable financial system. The actions of NCUA and other regulators, together and independently, are correcting many of the weaknesses laid bare by the financial crisis...
http://1.usa.gov/ieZ9VY

Swaps Rules Will Be Delayed Without More Funding - SEC's Schapiro
By Jessica Holzer and Jamila Trindle Of DOW JONES NEWSWIRES
The implementation of a new regulations for the $600 trillion over-the-counter derivatives market will be further delayed unless the U.S. Securities and Exchange Commission gets a budget boost, SEC Chairman Mary Schapiro said in prepared testimony to a Senate panel.
http://jlne.ws/qePI7z

Dodd-Frank financial reform law hasn't curtailed banks' profits
Los Angeles Times
Banking executives argued vehemently against Dodd-Frank a year ago, saying it would erode earnings. But in the last two weeks, banks have reported billions of dollars in profits. Just a year ago, banking executives argued vehemently against the most sweeping overhaul of financial regulations since the Great Depression, saying the law enacted then would stifle innovation and erode profits.
http://jlne.ws/nCbZvU

Little to celebrate on Dodd-Frank’s birthday
By Hal Scott, Financial Times
America’s Dodd-Frank act is one year old on Thursday. The act made some useful corrections in the regulation of American financial markets, but it has failed to respond effectively to the root causes of the financial crisis and its impact on the global financial system. In the short term, it has hindered economic recovery. Worse, in the longer term, it has actually made future crises more likely, while potentially damaging the international competitiveness of America’s financial institutions.
http://jlne.ws/pJXRWi

CFTC Finalizes 3 More Derivatives Rules
Dow Jones
The Commodity Futures Trading Commission unanimously approved three more new derivatives rules Tuesday, bringing the number of final rules required by the Dodd-Frank law to 10, out of over 50 proposed rules. Last year's Dodd-Frank financial overhaul law charged the CFTC and the Securities and Exchange Commission with writing new rules to create a new regulatory regime for over-the-counter derivatives called swaps. The law's one-year anniversary is Thursday, by which time most of the new rules were supposed to be written, but the commission acted last month to delay some of the law's requirements for as long as six months. The Dodd-Frank law aims to make as many swaps as possible trade on open platforms and go through clearinghouses.

Regulators Weigh Changes To Bank Ownership Caps In Swaps Venues
By Jacob Bunge and Katy Burne, DOW JONES
Regulators are reconsidering proposals that would limit the amount of voting power dealer banks have in derivatives clearinghouses and swaps trading platforms, worried that draft rules went too far, according to people involved in the discussions. A proposal last fall from the Commodity Futures Trading Commission would have allowed up to one-fifth of voting equity to be held by any individual member in a clearinghouse or swap execution facility.
http://jlne.ws/nmXDsf




Lead Stories

Wall St. Makes Fallback Plans for Debt Crisis
By LOUISE STORY and JULIE CRESWELL, NY Times
Lawmakers in Washington are racing to reach a deal to save the country from defaulting on its debt, but financial players are devising doomsday plans in case the clock runs out.
http://jlne.ws/p2yqKy

Audit of Fed finds conflict-of-interest weakness
By Greg Robb and Ronald D. Orol, MarketWatch
A long-awaited audit of the Federal Reserve’s emergency lending programs recommended several areas that need reform, including the central bank’s conflict-of-interest policies.

Debt fears lead to US downgrade
By Michael Mackenzie in New York, Financial Times
Egan-Jones has become the first US rating agency to downgrade the country’s sovereign credit rating from triple A to double A plus as it focuses on the rapid rise in outstanding debt over the past five years.
http://jlne.ws/oDKu3c

Some investors likely to bail if U.S. rating cut
MarketWatch
Wall Street's leading trade association waded into the debt-ceiling debate Tuesday, warning that a U.S. credit-rating downgrade would be a shock to the markets.
http://jlne.ws/oVQwe8

S and P Threatens Broad Downgrade of Finance Companies
CNBC
Standard and Poor's Friday put a broad range of financial firms on negative credit watch, warning they could all be downgraded if the United States
has its credit rating cut.
http://jlne.ws/mRU5ej

Fitch: Rating Linkages to the U.S. Sovereign Rating A Sector and Transaction Analysis
Report - Registration required
http://jlne.ws/mOI8kr

Debt ceiling scuffle already hurting economy
Reuters
When U.S. President Barack Obama warns about the possible damage to economic growth from a failure to lift the debt ceiling, he usually speaks about it in the future tense. So does Federal Reserve Chairman Ben Bernanke who, when asked about the issue in congressional testimony last week, said “it certainly could slow the economy.”
http://jlne.ws/p4cUK5

**CN:  "Debt ceiling scuffle" sounds a bit like a dance. It's probably not easy to do without stepping on someone else's toes.

Tim Geithner: Sides are moving closer on debt deal
By JENNIFER EPSTEIN, Politico
Treasury Secretary Timothy Geithner said on Monday there’s progress on the debt talks and he is “absolutely” certain that President Barack Obama and congressional Republicans will be able to reach a deal to raise the ceiling ahead of the August 2 deadline.
http://jlne.ws/nB5Pxk

Draft deal for Greece includes fund overhaul
By Gabriele Steinhauser, Associated Press
A draft of a deal on a new bailout for Greece foresees an overhaul the eurozone's bailout fund in an attempt to stop the debt crisis from engulfing larger countries like Spain or Italy.
http://jlne.ws/oNMSJ1

French-German Proposal for Europe Emerges Before a Meeting on Greece
By STEPHEN CASTLE AND JUDY DEMPSEY, The New York Times
The leaders of Germany and France agreed late Wednesday on a proposal for a rescue plan for Greece to be presented to a summit meeting of European officials on Thursday, a statement from the French president said.
http://jlne.ws/mUG5GQ

ECB said to accept temporary Greek default in rescue
By Gernot Heller and Luke Baker, Reuters
The European Central Bank is willing to let Greece slip into temporary default as part of a crisis response that would involve a bond buyback but no new tax on banks, EU sources said on Thursday.
http://jlne.ws/njxuDR

Fed should do more if US economy doesn't improve-Evans
By Ann Saphir, Reuters
If the U.S. economy does not show signs of sustainable improvement this quarter, the Federal Reserve should dig into its toolbox to find new ways to help it along, a top Fed official said on Thursday.
http://jlne.ws/qKXuA7

8 Banks Fail EU 'Stress Tests'
BY DAVID ENRICH, WSJ.com
European regulators, trying to douse the Continent's financial crisis, unveiled the results of their banking "stress tests," but the small number of lenders that flunked the exams provoked skepticism.
http://jlne.ws/qZiQGm

Politicians Can't Agree on Debt? Well, Neither Can Economists
CNBC
The politicians grappling over how to pay the nation’s debts have been contributing to the heat of summer with back-and-forth charges that their opponents are disregarding the laws of economics.
http://jlne.ws/nnFmOu

Obama Picks Consumer Bureau Leader
The Daily Beast
It looks as though Elizabeth Warren will be headed back to Harvard: President Obama has picked Richard Cordray, the former attorney general of Ohio, to lead the Consumer Financial Protection Bureau.
http://jlne.ws/oidTLE

Obama laying out why he didn't press harder for Simpson-Bowles
By Jeanne Sahadi, CNNMoney
Last December, the bipartisan debt reduction commission that President Obama created put out a series of recommendations supported by a majority of its members.
http://bit.ly/p0pk2W

Investors Break Their Bonds to Ratings Agencies
Reuters
Some of the world's largest asset managers are cutting ties to credit rating agencies, potentially signaling the beginning of the end of their grip on global financial markets.
http://jlne.ws/nnCZnN

S and P: U.S. Debt Cut May Cascade to Other Entities
Reuters
A wide assortment of U.S. entities directly linked or reliant on the federal government's credit rating might suffer a ``knock-on'' effect and be downgraded if the nation loses its AAA rating, Standard & Poor's said in a statement Friday.
http://jlne.ws/o5w5GB

Sovereign Debt Weakens European Banks
New York Times
The latest bank stress test revealed how exposed banks are to the government bonds of Greece, Portugal, Spain and Italy.
http://jlne.ws/ovBR87

Southern Exposure for Europe Banks
BY DAVID ENRICH , WSJ
Europe's banks are sitting on vast quantities of loans to individuals and businesses in cash-strapped Southern European countries, highlighting how plain-vanilla loans, not just government debt, pose potential risks to the Continent's troubled banking system.
http://jlne.ws/p5Zcni

Fed Members Release Financial Reports
By Jeffrey Sparshott and Andrew Ackerman
Federal Reserve Vice Chairman Janet Yellen stands as potentially the wealthiest member of the central bank’s board of governors since joining in
October.
http://jlne.ws/nfY7gT


Events
Credit Risk in Emerging Markets
August 1, 2011
www.theIFM.org

Making Sense of Credit Default Swaps
August 10, 2011
www.theIFM.org

FIA Treasury & Rates Forum
September 14, 2011
FIA Program On Growing Role Of Treasury Futures - New York City
http://jlne.ws/fQFQXP








Economic News
July 2011 Business Outlook Survey - Indicators Suggest Activity Is Near Steady - Philadelphia Fed
Federal Reserve Bank of Philadelphia
Responses to the Business Outlook Survey suggest that regional manufacturing activity remained weak in July. The survey's indicators for activity and new orders, which had turned negative last month, recovered somewhat but are at very low positive readings. Firms indicated that employment grew modestly while the average workweek lessened. Indexes for prices show a continuing trend of moderating price pressures. The broadest indicator of future activity improved markedly this month, rebounding from its lowest reading in 31 months in June.
http://jlne.ws/ox3B0X

Leading economic index rises 0.3 percent in June
Reuters
A key gauge of future economic activity rose less than expected in June as headwinds from the debt ceiling debate and recent floods and tornado damage in some regions of the country kept growth moderate, the independent Conference Board said on Thursday.
http://jlne.ws/qXhvZz

Housing starts hit 6-month high
Reuters
Housing starts rose more than expected in June to touch a six-month high and permits for future construction unexpectedly increased, a government report showed on Tuesday, likely reflecting growing demand for rental apartments.
http://jlne.ws/nqQwn8

Consumer Spending: The Chicken or the Egg
By DAVID LEONHARDT, The New York Times
Yet more on the consumer bust, this time from David Backus (via Andrew Gelman): The suggestion … is that the economy is growing slowly because consumers aren’t spending money. But how do we know it’s not the reverse: that consumers are spending less because the economy isn’t doing well. As a teacher, I can tell you that it’s almost impossible to get students to understand that the first statement isn’t obviously true. What I’d call the demand-side story (more spending leads to more output) is everywhere, including this piece, from the usually reliable David Leonhardt.
http://jlne.ws/rnCTAd

Homebuilder Confidence in U.S. Rose in July
By Bob Willis, Bloomberg
Confidence among U.S. homebuilders improved in July from a nine-month low as executives turned less pessimistic on the outlook for sales.
http://jlne.ws/rgcVZC

Industrial Production in U.S. Climbs 0.2%
By Bob Willis, Bloomberg
Industrial production in the U.S. rose less than forecast in June, restrained by declines in the output of autos and business equipment.
http://jlne.ws/n7ff5g

CPI: Inflation retreats on lower gas prices
CNN Money
Falling prices at the pump pushed inflation lower in June, but consumers are still paying significantly more than they were last summer.
http://jlne.ws/q2lseD




Exchanges, Clearing Houses & MTFs

For CME Group, uncertainty is a two-edged blade
By Ann Saphir, Reuters
Uncertainty is proving a two-edged sword for CME Group Inc . Worries over a debt crisis have lit a fire under CME's interest-rate futures markets, as investors turn to contracts at the Chicago Board of Trade and the Chicago Mercantile Exchange to protect their portfolios from market gyrations, a top CME official said on Wednesday.
http://jlne.ws/pwVKCX

NYSE Bonds Distributing Markets Via Bonds.com Platform
Press Release
Bonds.com Group, Inc. (OTC.BB:BDCG) today announced that it has entered an agreement with NYSE Euronext (NYX) to make NYSE Bonds orders executable via its BondsPro trading platform, effective on July 13, 2011.
http://jlne.ws/qfqzJG

NYSE Euronext Appoints John Spiegel as Vice President, Interest Rate Business Development for NYSE Liffe U.S.
NYSE Euronext (NYX) today announced that John Spiegel has been appointed as Vice President, Interest Rate Business Development, for NYSE Liffe U.S. In this Chicago-based role, Mr. Spiegel is responsible for expanding the NYSE Liffe U.S. interest rate futures complex by continuing to create and develop strong customer relationships across the spectrum of key market participants, including banks, asset managers, FCMs, and inter-dealer brokers. He will report to Marco Bianchi, Senior Vice President, Head of Business Development, NYSE Liffe U.S.
http://jlne.ws/p7WjJW

DTCC Bolsters Its Global Funds Processing Business With New Hire - Industry Veteran Joins DTCC’s Wealth Management Services Team, Strengthening The Company’s Ability To Bring Certainty And Reliability To The Offshore Mutual Funds Marketplace
Press Release
The Depository Trust and Clearing Corporation (DTCC) announced yesterday the appointment of Gail Weiss as vice president and head of global business development, Wealth Management Services, to further strengthen its global funds processing business.
http://jlne.ws/oSTph7

LCH.Clearnet’s SwapClear Clears OTC Interest Rate Swaps For Friesland Bank Through ABN AMRO Clearing - First Client To Clear OTC IRS
Transactions In The Netherlands
Press Release
Friesland Bank, ABN AMRO Clearing Bank N.V. (ABN AMRO Clearing) and LCH.Clearnet Ltd (LCH.Clearnet), today announced that Friesland Bank has signed up to LCH.Clearnet’s SwapClear service to clear OTC interest rate swap (IRS) transactions through ABN AMRO Clearing. Friesland Bank is the first Dutch client to benefit from SwapClear’s proven risk management experience.
http://jlne.ws/n2syUG

ICE credit clearer bulks up, gets Dodd-Frank ready
By Jonathan Spicer, Reuters
IntercontinentalExchange Inc's U.S. clearinghouse for credit derivatives, known as ICE Trust US, will add nearly a dozen formal users and become a new entity approved by the Dodd-Frank financial overhaul.
http://jlne.ws/rj9QVi

NYSE Bonds Distributing Markets via Bonds.com Platform
Bonds.Com Group, Inc. (OTC.BB: BDCG) today announced that it has entered an agreement with NYSE Euronext (NYX) to make NYSE Bonds orders executable via its BondsPro trading platform, effective on July 13, 2011.
http://jlne.ws/qTbOps

Start-Up Targets Price Transparency in Bonds, Derivatives
BY KATY BURNE, Dow Jones
A technology start-up called Benchmark Solutions introduced a service Monday offering investors a way to assess if dealers are offering them a fair price on fixed-income and derivatives trades. The company, started by the co-founder of electronic bond and swaps trading platform Tradeweb Markets LLC and backed by private-equity giant Warburg Pincus LLC, promises to try to bring the same level of price transparency to credit markets that exists in the stock markets.
http://jlne.ws/peXCsZ

ICE credit clearer bulks up, gets Dodd-Frank ready
By Jonathan Spicer, Reuters
IntercontinentalExchange Inc's (ICE.N) U.S. clearinghouse for credit derivatives, known as ICE Trust US, will add nearly a dozen formal users and become a new entity approved by the Dodd-Frank financial overhaul. The clearinghouse, which will be renamed ICE Clear Credit, added 11 bank units as formal "clearing participants," bulking up a group of heavyweight market players that has helped ICE establish itself as the top central counterparty for U.S. credit default swaps (CDS).
http://jlne.ws/oXnc3r




Firms & Banks

Northern Trust names CFO Morrison president, COO
By: Steve Daniels, Crain's
Northern Trust Corp. is rethinking its executive suite. Chicago’s biggest bank on Tuesday named William Morrison, a veteran of Northern
and most recently chief financial officer, to the newly created role of chief operating officer. Mr. Morrison also is getting the title of president, most recently held by Chairman and CEO Frederick (Rick) Waddell.
http://jlne.ws/pTbNG2

Goldman Sachs workers each to take home £300,000 for a year in which the bank halved its earnings
Daily Mail
Earnings have halved since the start of the year after the Wall Street giant failed to protect itself against the massive turbulence on financial markets.
http://jlne.ws/qmRXs2

Goldman to Cut Jobs as Debt Trading Misses
By Christine Harper, Bloomberg
Goldman Sachs Group Inc. (GS), the U.S. bank that makes most of its money from trading, said it will cut about 1,000 jobs after a plunge in fixed-income revenue that was bigger than analysts estimated.
http://jlne.ws/nBV20g

How to Determine if TIPS Are Cheap or Expensive
By Christine Benz, Morningstar
In a column about how much to invest in Treasury Inflation-Protected Securities, you noted that "TIPS investors might be inclined to take a more tactical approach, adding to them when they appear cheap and lightening up on them when they appear dear." But how would investors go about making those judgments?
http://jlne.ws/qER6HT

BofA Drops Below $10, First Time in 2 Years
By Rick Green, Bloomberg
Bank of America Corp. (BAC), the biggest U.S. lender by assets, fell below $10 a share in New York trading today as concern mounted about the company’s ability to restore profit.
http://jlne.ws/oDJZKI

Goldman to Cut Jobs as Debt Trading Misses
By Christine Harper, Reuters
Goldman Sachs Group Inc. (GS), the U.S. bank that makes most of its money from trading, said it will cut about 1,000 jobs after a plunge in fixed-income revenue that was bigger than analysts estimated.
http://jlne.ws/nBV20g

Bank of NY Mellon gains on European uncertainty
FT.com
http://jlne.ws/nLNkcL

Royal Bank of Scotland is sued by federal regulators over credit union losses
Los Angeles Times
The National Credit Union Administration lawsuit is seeking $629 million for allegedly selling risky mortgage securities to Western Corporate Federal Credit Union. Federal regulators are seeking $629 million in damages from a Royal Bank of Scotland unit accused of selling riskier-than-advertised mortgage securities to Western Corporate Federal Credit Union, a San Dimas credit union that failed ...
http://jlne.ws/oCayGM

Tradition sees strong take up of swaps platform
By Philip Stafford, Financial Times
Compagnie Financière Tradition, one of the five biggest interdealer brokers, is shaping up to rival market leader Icap after the Swiss-based group said its new electronic trading platform had conducted trades worth more than E100bn in its first two months of existence.
http://jlne.ws/ogn946

Deutsche Bank, SocGen Face Pressure to Boost Funds After Tests
BusinessWeek
Deutsche Bank AG, Royal Bank of Scotland Group Plc, Societe Generale SA and UniCredit SpA may face pressure from investors to boost capital after scraping through Europe's banking stress tests.
http://jlne.ws/nmzgIl

RBS restructuring head to quit for Lloyds - report
Reuters Finance News (EU) via Yahoo! UK and Ireland Finance
Royal Bank of Scotland's head of restructuring and risk, Nathan Bostock, is leaving the bank to join rival Lloyds Banking Group , Sky News reported on Monday. Bostock is expected ...
http://jlne.ws/ogWw4K

HSBC alerts customer segment of IRS letter
UPI
A bank at the core of a U.S. crackdown on tax scofflaws has alerted Indian-American clients it received an IRS summons seeking U.S. account-holders' names.
http://jlne.ws/p1hBmO

HSBC, Barclays on cost-cutting spree
Business Standard India
In a departure from roaring growth and profit numbers posted last year, two leading British lenders in the country, HSBC and Barclays, are on a cost-cutting spree, involving some retrenchments as they realign their operations.
http://jlne.ws/r15SJJ

Barclays Takes the Lead in IPOs
BusinessWeek
Ros Stephenson's cultivation of private equity firms pays off.
http://jlne.ws/pTFYxk

U.S. regulators sue RBS over mortgage securities
Reuters via Yahoo! UK & Ireland News
Royal Bank of Scotland is facing a second lawsuit from U.S. credit union regulators accusing it of misrepresenting mortgage backed securities that it sold.
http://jlne.ws/okp7eP

Citigroup Says $22 Billion at Risk in Five European Nations
BusinessWeek
Citigroup Inc., the third-biggest U.S. bank, estimated it has at least $22 billion in loans, trading assets and other "exposures" to Greece, Italy, Portugal,
Spain and Ireland.
http://jlne.ws/r7Yph1

Citigroup goes on the offense: hiring, expansion
San Francisco Chronicle
For 2 1/2 years, Vikram Pandit was forced to hunker down to fix Citigroup's troubled businesses and fend off the bank's critics in Washington. Now, after reporting a 24 percent profit increase for the second quarter,...
http://jlne.ws/pELvDG

Citigroup investigates charge it ignored service members act
Pittsburgh Post-Gazette
Banking giant Citigroup is looking into allegations in a federal lawsuit filed by Sewickley-area lawyers that it ignored a law barring most foreclosures on homes owned by active-duty soldiers.
http://jlne.ws/rthxvQ

U.S. probes Credit Suisse for aiding tax evasion
By Katie Reid and Chris Vellacott, Reuters
Swiss bank Credit Suisse is being probed by the U.S. Department of Justice as part of a broader investigation into banks suspected of helping Americans evade taxes.
http://jlne.ws/qtkGvG








Regulators

IMF urges China to strengthen yuan
CNNMoney
China's economy is growing rapidly, but the International Monetary Fund believes it could be doing so on stronger footing, if the government were to
loosen its tight grip on its currency.
http://jlne.ws/pfV24Z

FSB releases consultation documents on measures to address systemically important financial institutions
The Financial Stability Board (FSB) and the Basel Committee on Banking Supervision are today launching a public consultation on two documents that set out proposed measures to address the systemic and moral hazard risks posed by systemically important financial institutions (SIFIs). The measures implement the framework contained in the FSB’s recommendations endorsed by the G20 Leaders in November 2010.
http://jlne.ws/nthWmB

Rules cleared to identify systemic clearinghouses
By Ronald D. Orol, MarketWatch
A group of financial watchdogs on Monday approved rules for designating derivatives clearinghouses systemically important, a move that will allow regulators to start identifying which of the intermediaries for the $450 trillion swaps industry will be subject to higher capital levels and more examinations.
http://jlne.ws/ruGR9b






Global News

Financial regulators and industry meet
Press Release
The Board of the Finance Industry Council of Australia (FICA) yesterday held talks with the APRA Chairman and Members, and the ASIC Chairman and Commissioners, on regulatory and other issues facing the industry.
http://jlne.ws/ouEtYS

ISDA Hosts Regional Regulators Workshop
HONG KONG--(BUSINESS WIRE)--The International Swaps and Derivatives Association, Inc. (ISDA) hosted an Asia Pacific Regulators Workshop in Hong Kong today with supervisors and policymakers from 19 regulatory bodies across the Asia Pacific region.
http://jlne.ws/pueXcz

Egypt Bond Sale May Hedge Against Post-Election Instability: Arab Credit
By Ahmed A Namatalla, Bloomberg
Egypt’s first bond sale since the popular uprising that ousted its president in February may help cushion the country against higher borrowing costs after the year-end elections should political instability persist.
http://jlne.ws/mYsGY6

Greece debt: Merkel dampens expectations of deal
BBC
German Chancellor Angela Merkel has played down the chances of Thursday's emergency eurozone summit resolving Greece's debt crisis.
http://jlne.ws/q8TIh1

Bank of Canada keeps key interest rate at 1%
CBC News
The Canadian dollar soared nearly a penny in trading Tuesday after the Bank of Canada decided to keep its bench-mark overnight interest rate steady at one per cent.
http://jlne.ws/pnKiKE

Plan D stands for default ... and the death of the euro
By Wolfgang Münchau, Financial Times
The biggest single danger in the eurozone crisis now is that events are moving too fast for Europe’s complacent political leadership. Last week, the crisis reached Italy. And the European Union looked the other way.
http://jlne.ws/rrujab

Spain and Italy top results in stress tests
By Patrick Jenkins and Brooke Masters in London and Quentin Peel in Berlin - Financial Times
Spain and Italy’s leading banks were the strongest performers in last week’s European stress tests, in a surprise result that could help relieve the funding pressure that had been building on them.
http://jlne.ws/olkc61

ECB and Merkel clash over Greece
By Peter Spiegel and Stanley Pignal in Brussels and Quentin Peel in Berlin - Financial Times
The head of the European Central Bank placed a major obstacle on the path to a new agreement on a Greek financial bail-out, saying the bank could not accept defaulted bonds as collateral, potentially cutting off fundng from the Greek banking system.
http://jlne.ws/oAOBAb

Italy to give final OK to austerity package
By Alessandra Rizzo, The Daily News
Italy passed a —70 billion ($99 billion) austerity package on Friday in a move considered crucial to preventing the eurozone's third-largest economy from succumbing to the debt crisis.
http://jlne.ws/qsurAo

Greek rescue goes long
IFR
Eurozone officials are working on a new plan to restructure Greece’s sovereign debt. Earlier French-led proposals to roll over debt have been shelved and discussions now centre on replacing old debt with super-long bonds of up to 40 years. Such issuance would allow banks to avoid writing down their holdings, and would also reduce the country’s immediate repayments. Christopher Spink reports.
http://jlne.ws/oyD9fa

European Banks Urged to Bolster Reserves Following Stress Tests
By JULIA WERDIGIER AND JACK EWING, The New York Times
About two dozen European banks were put under official pressure Friday to bolster their reserves, after a much-anticipated test of whether they would be able to survive such economic shocks as a further deterioration in the sovereign debt crisis.
http://jlne.ws/qMv2va





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