• Fed's 'living will' plan may have overlooked possibility of regional bank failures, Systemic Risk Council says
    19 July 2019
    The US Federal Reserve may have proposed easing “living will” requirements for big regional banks without adequate study of the likelihood of their collapse or the difficulty of unwinding them, the nonpartisan Systemic Risk Council said.

    “With so much focus on the very largest institutions since the crisis, it is unclear whether the banking authorities have planned and prepared adequately for the failure of large regional banks,” the Washington-based group headed by Paul Tucker, a former Bank of England deputy governor, said.

    In a letter this week, the group said that if a big regional bank collapsed, “[t]here could plausibly be a run on similar banks. If that occurred, the supply of credit and other services would be impaired, with wider costs to the regional or even national economy.”

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  • Investment-research consultation might be first step to relaxing Mifid unbundling rules
    18 July 2019
    Asset managers forced to separate their spending on research and trading under EU rules have been asked by the bloc’s securities-market authority to give their views ahead of a 2020 review, in a consultation which could be the first step to relaxing those rules.

    The move could also come to aid the EU in its efforts to improve capital-market finance for the small-business segment.

    Add-on services — like providing information about companies — started as a way for brokers, forced to charge fixed execution fees, to compete. Prising apart something that had been an industry norm for more than a century has not proved easy.

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  • Foreign banks with US branches pan Fed's idea of applying liquidity standards
    17 July 2019
    The US Federal Reserve’s preliminary plan for extending liquidity rules to foreign banks’ US branches would likely increase global fragmentation and create overlapping regulation, according to European, Japanese and Canadian banking groups.

    “This is not necessary, as those branches are legally part of the home legal entity and covered by the home jurisdiction’s liquidity regulations as well as [US] oversight,” the groups said in a recent letter.

    The European Banking Federation, Japanese Bankers Association and Canadian Bankers Association said that if other jurisdictions adopted similar restrictions, “all capital and liquidity would become ring-fenced and fragmented along geographic lines.”

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  • Banks campaign for Fed extension of 'living will' filing deadline
    16 July 2019
    Banking groups are making a concerted effort to get the US Federal Reserve to relax a year-end deadline for firms to file a “living will” in light of its proposal to reduce the frequency of these submissions by small and regional banks.

    A filing extension is “necessary to avoid placing organizations in the untenable position of having to prepare” a 2019 resolution plan that “could be rendered moot” if the Fed’s plan is made effective Nov. 24, as proposed, Capital One, PNC and US Bancorp wrote recently. Groups including the Bank Policy Institute and Securities Industry and Financial Markets Association made a similar point in a letter last month, in a May 17 meeting with Fed and Federal Deposit Insurance Corp. officials, and in a May 1 letter.

    "We request that the agencies immediately issue a statement that no resolution plan submissions will be required prior to July 1, 2021," the Institute of International Bankers wrote.

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  • Stock exchanges' data fees are too high, commission says as ESMA sits on sidelines
    15 July 2019
    Investment banks complaining of rocketing costs for equity data have been offered support from antitrust officials at the European Commission, as the bloc’s securities-market watchdog studiously sits on the fence.

    High fees and prices “persist” in the market for information about equity trades, commission staff said in an annual report published today.

    The acknowledgment from the competition watchdog that data prices are too high will come as a comfort to those who complain stock markets have been abusing their quasi-monopoly to hike the fees to get access to real-time price and volume information.

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