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G-20 officials say euro-zone rescue fund must be
increased
Finance ministers from the Group of 20 nations are calling to
bolster the size of the euro-zone's rescue fund. But German Finance
Minister Wolfgang Schaeuble warned that the European sovereign-debt
crisis won't be resolved by increasing the fund or printing more
money. "Economic stimulus is ineffective in the face of major
structural shortcomings," Schaeuble said. "The strategy of piling
up more debt will stunt rather than stimulate growth in the long
run." Financial Times(tiered subscription model)(26
Feb.), The Wall Street Journal/Dow Jones Newswires(25
Feb.), The Telegraph (London)(26 Feb.)
Currency volatility remains a concern among G-20
leaders
Officials attending the weekend's Group of 20 meeting discussed
their concerns about volatility in currency markets, but the issue
wasn't the focus. "The debate has been dominated by euro-zone
issues, but currency volatility has been discussed and may be
included in the communique along with high oil prices," said one
G-20 official. "The yuan and the yen were not specifically
discussed. The yen's fall lately is seen as normal. So currencies
were not at centre stage." The Wall Street Journal/Dow Jones Newswires(26
Feb.)
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Transaction tax would hit asset management hard,
group warns
An industry group estimated that if the EU's proposed tax on
financial transactions were in place last year, it would have cost
the asset-management industry about €38 billion. Financial Times (tiered subscription model)(26
Feb.)
Volbroker paves the way for a currency-volatility
index
Volbroker, a platform for trading foreign exchange options, is
starting to publish information about the volatility of seven
currency pairs. The move clears the way for a volatility index for
currencies. "By creating an independent, reliable reference point
that the market can rely on, products such as volatility indexes
and cash-settled forward-volatility agreements can be created and
expanded," said Terry Benson, Tradition-ICAP's global head of
business development. Financial News Online (U.K.) (subscription
required)(27 Feb.)
- Geithner says market making likely will be OK under
Volcker rule
US Treasury Secretary Timothy Geithner said the Volcker rule, which
bans proprietary trading at major banks, likely will allow market
making. Geithner said he is confident that regulators will be able
"to do what the law requires -- that as we are limiting the risk
these large institutions pose to the world, could pose in the
future -- we're preserving well-designed, carefully constructed
exceptions for market-making hedging, as the law intended". Other
finance officials from the Group of 20 nations also voiced optimism
that the Volcker rule will be adjusted as US officials consider
concerns from foreign governments. Bloomberg(24 Feb.), Reuters(27 Feb.)
- Volcker rule should exempt foreign sovereign debt,
Citigroup says
Manuel Medina-Mora, head of global consumer banking at Citigroup,
said regulators should exempt foreign sovereign debt from the
Volcker rule. Medina-Mora warned that the rule, which exempts US
government debt, likely will hinder liquidity of foreign sovereign
debt. "Implementation of the rule as it is today will have an
impact on monetary policy around the world," he said. The Wall Street Journal(26 Feb.)
- ECB's loan programme is expected to buy officials
time
The European Central Bank is poised this week to offer banks
inexpensive three-year loans, which are expected to give Europe's
politicians more time to resolve the sovereign-debt crisis. A
survey of economists found that banks are expected to tap the loan
programme for about €492 billion. "I don't expect this operation
can solve all the problems, but hopefully it will take us past the
worst point of the crisis," said Riccardo Barbieri, Mizuho
International's chief European economist. CNBC/Reuters(26 Feb.), The Wall Street Journal/The Euro Crisis blog(24
Feb.)
- Bank of Israel's Fischer warns about
complacency
Stanley Fischer, governor of the Bank of Israel and a mentor for
other central bankers, said he is worried complacency could expose
the world to additional threats. "Nobody should be relaxing at this
stage," Fischer said. "It's important that we keep asking what can
go wrong next, because something will go wrong somewhere, sometime,
and it's important to try to anticipate where and what it might
be." Bloomberg(23 Feb.)
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| AFME
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- Bank of England's Andrew Haldane will speak at GFMA
LEI conference
GFMA is hosting the Building a Global Legal Entity Identifier Solution
Symposiumon 14 March at the SIFMA Conference Center in New
York. The symposium will feature keynote speaker Andrew Haldane,
executive director of financial stability at the Bank of England.
Haldane and other senior-level industry professionals will address
global policy, regulation and business implementation issues facing
the financial-services industry as we all converge on standing up a
global LEI infrastructure. Seminar programme topics include ISO
Standard 17442, registering for an LEI, LEI global adoption, the
LEI governance framework, benefits to the industry and regulatory
communities, and US Community Futures Trading Commission reporting
requirements. Be sure your firm knows what lies ahead for LEIs.
Register!
- AFME announces new event: Investing in Distressed Bank
Assets Conference -- 15 March in London
As focus increases on European banks' mass deleveraging of more
than €1 trillion in assets, and their need to raise capital,
leading investors will come together with the Bank of England, the
US Federal Deposit Insurance Corp and European regulators -- and
the most experienced advisers in the market -- to talk
strategy, structuring, pricing and
regulationdriving these deals. Join us at the Royal
College of Surgeons in London to hear thought leaders from
Kohlberg Kravis Roberts, Oaktree Capital Management,
Taconic Capital Advisors, WL Rossand JC
Flowersshare their views on key
issuesfacing this unprecedented reallocation of capital.
See further details, or book your place.
