• Fed’s Quarles says derivative clearing offset should be considered in new leverage ratio
    15 November 2018
    Randal Quarles, the US Federal Reserve’s vice chairman for supervision, said that the central bank should consider including a derivative clearing offset in new capital requirements — a move that could encourage banks to clear more derivative contracts for customers.

    “My personal view is that we ought to be open to changing our treatment of initial margin,” Quarles told the House Financial Services Committee this week.

    “We have rules at the Fed … that address some of these concerns. We ought to use those.”

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  • CFTC’s Giancarlo plans to 'move forward' on SEF rule despite Democratic dissent
    14 November 2018
    Christopher Giancarlo, head of the US Commodity Futures Trading Commission, said he plans to push ahead with rule changes on derivative trading platforms despite a partisan split among commissioners.

    “I will work with all my commissioners, Republican or Democrat, as much as I can, but I also intend to move forward,” he said in a recent interview with MLex. “That’s the way Congress designed it.”

    Giancarlo, a Republican appointed by President Donald Trump who has typically welcomed a range of views, said he plans to take the same aggressive approach on all policies on which there is significant internal dissent.

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  • ECB derivatives-clearing orders would get time limit in EU compromise bid
    12 November 2018
    Clearinghouses could face only temporary regulatory orders from EU central banks, limited to 6 months plus another half year’s extension, in a proposed compromise among governments on the supervision of derivatives markets after Brexit.

    The time limit, in amendments being discussed by national negotiators tomorrow, would dial back the proposed powers for the European Central Bank and other monetary authorities to intervene in areas such as margin requirements.

    Reining in the ECB could be key to reaching a first-stage deal among the member states this year. Countries including France are pushing for the ECB to play a greater role, but Germany and others are seeking to keep those rules in the hands of market regulators.

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  • US Volcker proposal includes 'accounting prong' that expands scope of rule, Fed panel complains
    09 November 2018
    A US Federal Reserve advisory panel voiced displeasure that the Volcker rule proposal to simplify current requirements includes an “accounting prong” that would expand prohibitions on proprietary trading to encompass derivatives.

    The 12-member bankers committee met with the Fed to also complain about a section that “does not go far enough in meaningfully tailoring” requirements to banks that hold moderate amounts of trading assets and liabilities, a record of the meeting shows.

    The blowback from CEOs of some leading banks shows that the May proposal from Trump-appointed regulators has not fully quieted industry concerns about the complexity and reach of a major section of the post-crisis Dodd-Frank Act.

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  • Insurers may face orders on 'collective' risks in plan by global standards body
    08 November 2018
    Insurers could face orders to cut back on commonly held assets such as government bonds, out of fear about collective risks to the financial system, under a proposal due next week from global standard-setters.

    The International Association of Insurance Supervisors’ proposal will seek to go beyond rules designed to ensure the health of individual insurers, a senior regulator told a Luxembourg conference* today. The proposal will call for “collective actions” to be taken as soon as 2020 when an activity deemed low-risk for a single company is magnified across the industry.

    “The policy measures we are thinking about are focused on the risk exposure,” for a more “holistic” approach, said Alberto Corinti, chairman of the IAIS’s Macroprudential Committee and board member at the Italian regulator, the Institute for the Supervision of Insurance.

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