• Global LEI body asks Fed to include codes in new fund transfer messages
    11 September 2018
    The global authority that manages legal entity identifiers asked the US Federal Reserve to include the codes in new messages proposed for use in real-time settlements of fund transfers among banks and other financial institutions.

    The Global Legal Entity Identifier Foundation’s nonbinding request is its latest effort to get the ID codes incorporated into specific international and domestic proposals. Firms' adoption of the tags has stalled.

    The Switzerland-based foundation’s letter asked that the 20-digit codes be included as an identifier for each party in the new format of messages accompanying large-value, time-critical credit transfers.

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  • CFTC plan to ease audits of industry exams doesn't go far enough, self-regulators say
    10 September 2018
    A US Commodity Futures Trading Commission proposal to relax outside audits of derivatives industry self-policing groups doesn’t go far enough, a committee of self-regulatory organizations said.

    The organizations called for less frequent audits of their examinations of futures brokers’ customer-fund safeguards.

    The current time-frame for the audits is once every three years. The CFTC proposal would relax that to every five years.

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  • Global cyber glossary for foiling financial attacks should be anchored in two bodies, exchanges say
    07 September 2018
    The Financial Stability Board should root its plan to develop a worldwide cyber glossary in terms already used by two major standard-setting bodies, a group of exchanges and clearinghouses said in a letter.

    The lexicon to be used in a program to thwart electronic attacks on the financial sector should be based on work done by the International Organization for Standardization and the US National Institute of Standards and Technology, the letter said.

    These two are the “most distinguished sources” of cyber standards, said the World Federation of Exchanges, whose dozens of members include Intercontinental Exchange, Nasdaq and Japan Exchange Group.

    The FSB dictionary being developed “would be more effective and consistent if the definitions were anchored exclusively” in the two standards bodies, the letter said. Their “glossaries of key terms are more comprehensive than other sources.”

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  • CFTC's Giancarlo ties overseas deference plan to EU retreat on US clearinghouse oversight
    06 September 2018
    Christopher Giancarlo, head of the US Commodity Futures Trading Commission, linked his new plan to defer to overseas regulators on derivatives oversight to the EU’s willingness to back down from expanding its authority over US clearinghouses.

    “The prospect of my course being fully implemented will be greatly enhanced if the European Union, as well as our other non-US counterparts, pursue a common approach and harmed if they do not,” he told a Vienna conference* Thursday.

    Giancarlo said that the US and Europe could achieve “true regulatory coordination.”

    “It is time to seize that opportunity,” he added, “by putting in place the relevant laws, standards and policies to reciprocate our path of deference with a European recommitment to that most beneficial approach".

    *Eurofi Financial Forum; Vienna, Austria; Sept. 6, 2018.

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  • Banks that lend to energy sector have more problem assets, FDIC officials say
    05 September 2018
    Banks that lend heavily to oil and gas producers have seen significant increases in problem assets and “financial stress” as a result of a steep drop in energy prices in recent years, US Federal Deposit Insurance Corporation officials said.

    The officials, in an article in the latest FDIC quarterly, said some of these banks showed “evident” risk-management weaknesses, including underwriting laxity, a loosening of credit terms, and limited coverage of lending exposures in loan policies.

    “The ongoing recovery and uncertainty in [oil and gas] prices may continue to challenge banks with direct or indirect exposure to this sector,” said the article by Lisa Garcia and Kenneth Weber, both of the FDIC’s risk management supervision division.

    The article released Wednesday, based in part on FDIC examinations of hundreds of banks between Texas and North Dakota, added: “Banks with significant direct lending exposure to the [oil and gas] sector have seen greater increases in problem assets than other banks".

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