• CFTC alerting banks of impending 'big bang' of uncleared swaps margin rules
    08 November 2018
    Banks are being warned by the US Commodity Futures Trading Commission and banking regulators that final margin standards for uncleared derivatives are due to take effect in September 2020, Commissioner Rostin Behnam said.

    “We see the tip of the iceberg on the horizon and are doing our best to alert others,” he told bankers at a recent Tokyo conference.

    US regulators also are seeking feedback from industry on the status of their preparations “to ensure that we avoid catastrophe,” said Behnam, a Democrat.

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  • SEC advisory panel calls for riskier ETPs to be identified in approval-streamlining plan
    07 November 2018
    A US Securities and Exchange Commission advisory panel recommended that a proposal to streamline approvals for exchange-traded funds identify riskier products for investors, such as those that use derivatives.

    These risky exchange-traded products, or ETPs, include some securities linked to the CBOE Volatility Index that lost billions during stock market gyrations last February, the SEC’s Fixed Income Market Structure Advisory Committee said.

    The private-sector panel “has concerns regarding the use of the term 'ETF' by products that have materially different risks embedded in their structures than traditional ETFs,” its recent letter to the SEC said.

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  • Fed advisory panel says 'stress capital buffer' plan doesn’t go far enough to ease requirements
    05 November 2018
    A US Federal Reserve advisory panel has recommended that requirements be eased further in the central bank’s proposal to align firms’ capital standards with their stress test results.

    The bankers panel, whose members include Bank of America Chief Executive Brian Moynihan and Citigroup Chief Executive Michael Corbat, met with the Fed board to voice concern that firms wouldn’t have enough flexibility to distribute dividends, according to a meeting record posted recently.

    The 12-member Federal Advisory Council, which meets with the Fed in Washington four times a year, also said this “stress capital buffer” proposal aimed at simplifying the capital regime doesn’t make stress tests transparent enough to industry.

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  • Central banks exploring blockchain use to counter cyberattacks, payment inefficiency, BIS chief says
    02 November 2018
    Central banks are experimenting with use of distributed ledger technology to help payment systems recover from cyberattacks and improve the efficiency of payments, clearing and settlements, said Agustin Carstens, head of the Bank for International Settlements.

    “There’s much unheralded innovation going on,” Carstens, BIS general manager, told a Miami conference*. “Central banks are working overtime to make the existing payment infrastructure more robust, more resilient and more timely.”

    He added that current versions of blockchain and other distributed ledger technology, or DLT, “are not any better than what we already have today".

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  • Fed to soon weigh Dodd-Frank 'tailoring' for foreign banks with US presence
    01 November 2018
    The US Federal Reserve will soon consider proposing a scale-back of Dodd-Frank requirements for foreign banks with US footprints based on the four size and risk categories applied in the proposal Wednesday for US banks, said Michael Gibson, the Fed’s supervision and regulation chief.

    These new categories augur possibly significant changes in liquidity and stress-test requirements for banks with between $100 billion and $700 billion in assets, though virtually no change for banks larger or deemed systemically important.

    Overseas banks are hoping that, though dozens may have more than $700 billion in global assets, they could still win relief from particular standards such as liquidity requirements if their US operations are much smaller.

    “The staff intends to present three further tailoring proposals to the board in the near future,” Gibson told the Fed board Wednesday. “The first would consider tailoring of prudential standards for the US operations of foreign banking organizations based on the categories in the proposals, taking into consideration the structures through which these foreign firms conduct business in the US.”

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