• CFTC clearinghouse proposal lights new transatlantic path
    12 July 2019
    The US Commodity Futures Trading Commission sent a signal yesterday to France and Germany that a new EU post-Brexit clearinghouse law can still be shaped to satisfy regulators on both sides of the Atlantic.

    A CFTC proposal would defer oversight of foreign clearinghouses to the home country if these facilities do less than 20 percent of their business with American banks and companies.

    This plan, if finalized, would allow large clearinghouses such as France-based LCH SA and Germany-based Eurex to be supervised exclusively at home if the regulatory regimes are deemed comparable to that in the US.

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  • Fed's foreign bank liquidity plan should draw on states' input, New York says
    11 July 2019
    The US Federal Reserve should hold off on proposing to extend liquidity requirements to foreign banks’ US branches until it consults with appropriate state regulators, the New York State Department of Financial Services said.

    Some states, including New York, have licensing and supervisory authority over these foreign banking organizations’ branches to ensure repayment of depositors in a crisis, the recent letter to the Fed said.

    “It is critical that the federal agencies consult and coordinate closely with all domestic and international regulatory agencies that have licensing and/or supervisory responsibilities over the branches and agencies of FBOs, including state licensing agencies,” New York state said.

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  • Better resolution plans for failed banks needed, FSB official says, flagging EU agency
    10 July 2019
    A top Financial Stability Board official urged banks and national regulators to ensure adequate funding is available to unwind firms that collapse in a crisis, pointing to challenges the EU resolution authority faces.

    For the EU’s Single Resolution Board, FSB Vice Chairman Klaas Knot said “the public backstop funding mechanism is still very much a work in progress.”

    “There are quite a few challenges that need to be overcome,” he added.

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  • Libor shift will reward banks that do it first, Bank of England's Hauser says
    09 July 2019
    A Bank of England official appealed to banks’ financial self-interest in urging reluctant market participants to transition from Libor to other interest-rate benchmarks.

    “There is a business, as well as a risk, imperative to shift,” said Andrew Hauser, the Bank of England’s executive director for markets. “Those who get there first stand to gain the most. Those who don’t, risk getting caught napping.”

    Hauser’s pitch pivots from the risk-based exhortations to date by UK, US and global authorities seeking a move from scandal-plagued Libor by the end of 2021.

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  • US Office of Financial Research gets permanent chief, but doubts persist about commitment to agency's mission
    08 July 2019
    Dino Falaschetti took the helm of the US Office of Financial Research recently at a time when the independent agency that was created to sound early warnings of financial crises has been starved of resources by the Trump administration.

    Some progressive nonprofits fear Falaschetti, who was chief economist of the House Financial Services Committee when it passed a 2017 bill to eliminate the research office, will subvert its mission.

    “The Trump administration has made it difficult for OFR to do anything,” said Marcus Stanley, policy director of Americans for Financial Reform.

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