• EU law's impact on US clearinghouses in London still up in the air, CFTC's Quintenz says
    21 March 2019
    A new EU law’s impact on US clearinghouses after Brexit remains uncertain and subject to negotiation in years ahead, even after a joint transatlantic statement conveying an expectation of deference between the two sides, a US derivatives regulator said.

    “It’s going to take a long time before we get some clarity on this subject,” Brian Quintenz, a US Commodity Futures Trading Commission member, said in an interview at an industry conference* last week. “We need to stand firm while recognizing that Europe deserves a chance to respond to this pretty unique circumstance.”

    Quintenz, a Republican, expressed hope that the EU comes to recognize the CFTC’s authority over US-based clearinghouses in London.

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  • US Libor transition panel sets 'aggressive deadline' for mortgage model with alternative rates
    20 March 2019
    The US Federal Reserve-sponsored panel overseeing the transition from the London Interbank Offered Rate in the United States has asked for a computerized model to be submitted by June that could include an alternative benchmark for mortgages, a panel member said.

    “It’s a really aggressive deadline,” Daniel Coates, a Federal Housing Finance Agency official and member of the Fed-backed Alternative Reference Rates Committee, said at a conference last week*.

    Once ARRC receives the recommended adjustable-rate mortgage model from its consumer products working group, he said, the full committee will decide whether to issue it for public comment.

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  • Global LEI authority making only 'glacial' progress, CFTC's Giancarlo complains
    19 March 2019
    The global authority that oversees firms’ adoption of identification codes has been dragging its feet for years, leaving jurisdictions without adequate insight into post-crisis credit risks, said Christopher Giancarlo, head of the US Commodity Futures Trading Commission.

    “The progress is glacial,” he told reporters at an industry conference last week.* “We’re running out of patience.”

    Giancarlo, whose agency regulates derivatives trading, faulted the Basel-based Regulatory Oversight Committee created to oversee implementation of legal entity identifier (LEI) standards in the wake of the financial crisis.

    *FIA Boca 2019 International Futures Industry Conference; Boca Raton, Florida; March 13, 2019.

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  • CFTC should try to change SEF regime by 2020 presidential election, Quintenz says
    18 March 2019
    The US Commodity Futures Trading Commission should push to alter swap execution facility rules by the November 2020 presidential election to capitalize on the pro-market bent of the current Republican majority, Commissioner Brian Quintenz said.

    “We just need to be aware of the certainty that exists over the next year-and-a-half to get priorities done that for very legitimate reasons will have philosophical differences among commissioners,” he said in an interview at an industry conference* last week.

    “The longer we wait to take on those things, the less stable foundation they have if passed.”

    *Boca 2019: 44th International Futures Industry Conference. Futures Industry Association. Boca Raton, Florida. March 14, 2019.

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  • Brainard's multiple dissents break from Fed's nearly decade-old practice
    15 March 2019
    Democratic US Federal Reserve Governor Lael Brainard has broken from the central bank’s practice of consensus decision-making, casting multiple dissents in the past year that push back against Trump appointees’ deregulatory agenda.

    Brainard has dissented four times since last April, including twice this month, breaking a streak of 337 unanimous Fed votes on regulatory and enforcement matters dating to 2011.

    “The old regime of no dissent was unhealthy,” Darrell Duffie, a Stanford University finance professor, said in an interview. “In those days, a dissent was so unprecedented that a governor might have avoided a valid dissent merely in order to avoid the appearance of a big change in the character of the Board.”

    A difference of opinions is nothing new for the Fed, according to Karen Shaw Petrou, a banking consultant at Federal Financial Analytics. Post-financial-crisis rules were hotly debated, she said, but issues were typically resolved prior to board votes, which allowed the decisions to appear unanimous.

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