GFMA

Regulatory Roundup

ECB should aim to limit rates on euro-zone bonds, OECD says
The Organisation for Economic Cooperation and Development said the European Central Bank should vow to purchase bonds from euro-zone nations as a tool to cap rates and help resolve the sovereign-debt crisis. "We know there is a lot of disagreement, but the ECB ... should decide to send a very strong message to markets by saying, 'We will put a cap on interest rates, and we will do that credibly because we have the resources to do that'," said Pier Carlo Padoan, the OECD's chief economist. Reuters(28 Nov.)

ECB appears ready to continue conservative bond buying: The European Central Bank has taken a conservative approach to buying sovereign debt and appears poised to continue its programme. The approach puts pressures on euro-zone governments to lead efforts to resolve the debt crisis. The Wall Street Journal(29 Nov.)

EBA is poised to publish blueprint for hybrid bank debt
The European Banking Authority is preparing to publish an outline of rules governing banks' issuance of contingent capital. The move could help shape the global debate on CoCos, said Lars Frisell, chief economist at a Swedish regulator and a member of the Basel Committee on Banking Supervision. Reuters(28 Nov.)

Britain's FSA will prohibit retail sales of "death bonds"
The UK Financial Services Authority decided that Traded Life Policy Investments, known as "death bonds", are too complex and risky for retail investors. "TLPIs are toxic products which pose significant risks for retail investors," said Managing Director Margaret Cole. "The failure of these products in the past has led to significant consumer detriment. Ultimately, we aim to ban TLPIs from being marketed to UK retail investors." Reuters(28 Nov.), The Telegraph (London)(28 Nov.)