| Industry
News |
 |
|
|
|
|
- European negotiators propose 60% loss on Greek
debt
European negotiators have taken a hard line by asking holders of
Greek debt to accept a haircut of 60% on the face value of their
bonds. The cut is far higher than losses previously agreed upon
between euro-zone officials and private investors. Northern
European creditor countries have been pushing for holders of Greek
bonds to accept a higher burden. The Institute of International
Finance warned that forcing larger losses "would be tantamount to
default". "There are limits ... to what could be considered as
voluntary to the investor base and to broader market participants,"
said Managing Director Charles Dallara. Financial Times (tiered subscription model)(25
Oct.), Reuters(24 Oct.)
- Spain's woes could cause Europe's debt crisis to
spread further
Spain is expected to continue to struggle to reach its
deficit-reduction goals as the country's economy remains fragile.
The situation threatens to fan the flames of Europe's debt crisis.
"They will never make it," said Ludovic Subran, chief economist at
Euler Hermes. "Our September forecast sees Spain's deficit at 7%"
of gross domestic product in 2011. Bloomberg(24 Oct.)
- Analysis: Structural reforms won't end Europe's
crisis
There's nothing wrong with demanding that heavily indebted
countries along Europe's southern periphery implement structural
economic reforms, according to The Economist. "But don't pretend
that has too much to do with solving the immediate crisis," a Free
Exchange blogger writes. "If there is to be a long run, the euro
zone must convince markets that it understands the dynamics here
and is prepared to react appropriately. That means a giant pool of
money, and that will only be possible with strong German
leadership." The Economist/Free Exchange blog(24 Oct.)
- Recapitalisation could hit banks in Spain,
Portugal, Italy hardest
A €100 billion plan to recapitalise banks in Europe likely would
hit lenders in Italy, Portugal and Spain harder than most of their
counterparts in Germany, France and the UK. European officials are
considering requiring banks to increase core Tier 1 capital to 9%
of risk-weighted assets, sources said. Bloomberg(24 Oct.), The Wall Street Journal (tiered subscription
model)(24 Oct.)
- Banks strike deals to preserve
capital
Private-equity groups, hedge funds and other investors are striking
deals with banks to allow them to maintain their regulatory
capital, as Basel III rules loom and they face other issues.
Financial Times(tiered subscription model)(23
Oct.)
- Commentary: Changes to middle-office processes are
needed
Omgeo CEO Marianne Brown calls for improving middle-office
processes, saying a push for legal-entity identifiers is a step in
the right direction. Financial Times(tiered subscription model)(24
Oct.)
- Other News
- NYSE and Deutsche Boerse tout benefits of
proposed merger
The Wall Street Journal (tiered subscription model)/Dow Jones
Newswires (24 Oct.)
| Regulatory
Roundup |
|
 |
|
- Central bank officials call for wind-down plans for
clearinghouses
Two central bankers in Europe voiced concerns about clearinghouses,
saying effective wind-down regimes are needed in case they face
collapse to avoid a market meltdown. The concern is that as
clearinghouses deal with increasing volumes of trades, they might
become a systemic threat. "There is a big gap in the regimes for
CCPs," said Bank of England Deputy Governor Paul Tucker. "What
happens if they go bust? I can tell you the simple answer: mayhem."
Reuters(24 Oct.), Financial Times (tiered subscription model)(24
Oct.)
- European leaders emphasise need for progress on
regulatory overhaul
European leaders said officials must reach a consensus at next
week's Group of 20 meeting in Cannes, France, on significant
changes to financial regulation. Leaders issued a statement calling
for "real progress". They are concerned about a dependence on
credit ratings, and they said the idea of taxing financial
transactions should be "explored and developed further". Global Financial Strategy(24 Oct.)
| Spotlight on
China |
|
|
|
|
|
Hong Kong banks' exposure to China is a concern,
Fitch says
Fitch Ratings said Hong Kong banks' credit ratings could be
downgraded because of the companies' exposure to China's financial
market. "Fitch is seeing signs of the increasing influence of
Chinese banking parents on Hong Kong subsidiaries, which could
negatively influence efficiency or even reverse progress in key
areas including risk management," said Sabine Bauer, director of
the financial-institutions team at Fitch.
Global Financial Strategy(24 Oct.)
