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Regulatory Roundup

Euro-zone proposal reportedly focuses on central bank loans
European finance ministers are proceeding with a proposal to channel loans from national central banks through the International Monetary Fund, sources said. The move could deliver as much as €200 billion to battle the sovereign-debt crisis. "We're looking for a maximum reinforcement with the IMF and the central bank," said Belgian Finance Minister Didier Reynders. Bloomberg(02 Dec.)

MiFID II is meant to fix first version, but concerns remain
The first version of Europe's Markets in Financial Instruments Directive was intended to bolster trading-venue competition and price visibility. MiFID accomplished the first goal but fell short of the second. European officials are working on revising MiFID to resolve issues with the first version. However, insiders voiced concerns about unintended consequences that could result from MiFID II. Securities Technology Monitor(02 Dec.)

Analysis: Bank panics often originate in the shadows
The Financial Stability Board created a task force to look into shadow banking to monitor and regulate the sector, which is not well understood. However, bank panics often start in the shadows, which is where large financial institutions conduct business with one another. The Wall Street Journal(05 Dec.)

Commentary: Basel rules make financial system more vulnerable
Peter Wallison, a senior fellow at the American Enterprise Institute, explains capital requirements faced by financial institutions under Basel rules. Wallison argues that those rules are making the broader system more vulnerable to a common shock. He writes that not "all regulation is counterproductive. Yet the way it is currently pursued under the Basel rules will -- through encouraging future common shocks -- make the financial system more, rather than less, vulnerable to systemic breakdowns". The Wall Street Journal(03 Dec)

Commentary: FSA will publish long-awaited report on RBS collapse
The UK Financial Services Authority is poised to publish a report on problems that struck Royal Bank of Scotland in the run-up to the financial crisis. Sunday Telegraph Business Editor Kamal Ahmed explains that the much-anticipated report might provide lessons as officials try to prevent a repeat of the crisis. "Well, at least we must all hope it will be," Ahmed writes. "The gestation period for this piece of work has been long and painful. And to some critics of the FSA, me included, that has raised suspicions about the approach the regulator has taken." The Telegraph (London)(03 Dec.)

• Other News

Economists expect BoE to refrain from expanding stimulus
Bloomberg (02 Dec.)

ESMA will review stock-lending and collateral policies of ETFs
Financial News Online (U.K.) (subscription required) (05 Dec.)