GFMA: News on the global financial markets

Regulatory Roundup

EU makes progress on financial-transaction tax, official says
Algirdas Semeta, the EU's tax commissioner, said progress is being made on his draft law to levy a tax on financial transactions. "The positions of member states are converging ... particularly among the members of the euro zone," Semeta told the European Parliament. "We have the UK which is currently quite sceptical regarding this tax, but the discussion has just started. Our experts are visiting those countries which are more sceptical on this proposal to explain the technical elements." Reuters(23 Nov.)

Sweden aims for higher capital requirements for banks
The Swedish government proposed increased capital requirements for financial institutions as it strives to ensure the stability of the financial system. "Financial crises pose a serious threat to jobs, growth and welfare," said Minister for Financial Markets Peter Norman. "The upcoming proposal will reduce this threat and make Sweden less vulnerable to risk taking by the banks." The Wall Street Journal(25 Nov.), Reuters(25 Nov.), Financial Times(tiered subscription model)(27 Nov.)

EBA is frustrated with deadlock over bank funding
European finance ministers are set to discuss a deal regarding state-backed guarantees to thaw wholesale-funding markets, because about €700 billion in bank debt must be rolled over in 2012. The European Banking Authority outlined a three-pronged approach to restore confidence in the banking industry, but Chairman Andrea Enria indicated frustration with the political process. "The fact that so far only the EBA's measures to strengthen bank capital have been publicly put forward is for us a source of real concern," Enria said. Reuters(25 Nov.)

Canadian official warns about Basel III implementation
Julie Dickson, head of Canada's Office of the Superintendent of Financial Institutions, said global regulators need to focus on implementing Basel III rules to ensure banks are working on a level playing field. Dickson also said her office emphasised that "intensive supervision" is required and that efforts are under way to bolster scrutiny. "It's been agreed that we're going to try to assess whether global banks, if given the same portfolio, would come up with the same capital," she said. Reuters(23 Nov.)

• Other News

IASB chairman says IFRS 9 likely will be reworked
Reuters (25 Nov.)

UK regulators approve BATS' acquisition of Chi-X Europe
The Wall Street Journal (24 Nov.)

Spotlight on China

Investors and analysts are split on Chinese stocks
Concerns that China's economy is slowing and about corporate governance prompted many investors to sour on the country's companies. However, analysts remain bullish on Chinese companies, particularly banks and tech firms. "At sell-side firms, there is overwhelming pressure to believe in the 'China cannot fail' story," said Gillem Tulloch, founder and managing director at Forensic Asia. The Wall Street Journal(28 Nov.)