Gfma : News on the global financial markets

• Other News

Spanish and Italian borrowing costs rise after EU summit
The Wall Street Journal (12 Dec.)
France could overcome losing triple-A rating, Sarkozy says
The Wall Street Journal/Dow Jones Newswires (12 Dec.)

Regulatory Roundup

Many factors contributed to RBS failure, FSA says
The UK Financial Services Authority released its report into the collapse of Royal Bank of Scotland Group. The regulator blames bad decisions by the bank and insufficient regulations and requirements. The FSA also says supervision of RBS was flawed, but the agency notes that RBS' failure prompted better regulation. "We have probably moved into something more like the predominant model in the world whereas previously we were a strong outlier on the light side," said FSA Chairman Adair Turner. The Guardian (London)(12 Dec.), MarketWatch(12 Dec.), Reuters(12 Dec.), Bloomberg(12 Dec.), The Wall Street Journal(13 Dec.)

Analysis: Questions remain about quantitative easing
The Bank of England and the Federal Reserve began purchasing government bonds almost three years ago, and yet questions remain about how such quantitative easing works. The Bank for International Settlements suggested that QE might be subject to diminishing returns in lowering yields. However, QE's usefulness as a policy tool might beat concerns about its effects. The Wall Street Journal(13 Dec.)

• Other News

ECB reduced purchases of government bonds before summit
Reuters (12 Dec.)

Spotlight on China

Chinese banks' lending could lead to issues, source says
Chinese banks continue to maximise lending, which could result in more nonperforming loans, a source said. "It would be very hard for the central bank to rein in banks' strong desire to lend," the source said. "Banks should take responsibility for possible nonperforming loans instead of seeking help from the government." China Daily (Beijing)(13 Dec.)

Chinese regulator accuses company of market manipulation
The China Securities Regulatory Commission pledged to crack down on illegal trading. As part of that effort, the regulator accused investment company Guangdong Zhonghengxin of manipulating the stock market by orchestrating "pump-and-dump" schemes. CNBC/Financial Times(12 Dec.)