9 – 13 January 2017

Regulatory and Legislative Developments from Across the Globe

Global

BIS Releases Working Paper on Interbank Exposure
The Bank for International Settlements' Monetary and Economic Department released a working paper entitled "Multiplex Interbank Networks and Systemic Importance: An Application to European Data." The authors use the dataset of exposures between large European banks to illustrate that both the methodology and the specific level of network aggregation may matter both in the determination of interconnectedness and in the policy making process
Working Paper

FSB Publishes Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities
The Financial Stability Board (FSB) today published a report titled “Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities.” The document sets out 14 final policy recommendations to address the following structural vulnerabilities from asset management activities that could  potentially present financial stability risks.
Press Release

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NORTH AMERICA

White House Publishes Blog Post on Financial Reform During the Obama Administration
The White House published a blog post entitled "In Review: Why President Obama Reformed Wall Street and What Reform Has Accomplished." The post discusses the Dodd-Frank Act and other post-crisis reforms that are credited with making the financial system more stable and supportive of long-term growth.
Blog Post

FSOC Holds Executive Session and Releases November 16 Meeting Minutes
Treasury Secretary Jacob J. Lew presided over an executive session to discuss, among other things, an update on market developments, the quantitative thresholds applied in Stage 1 of the Council's nonbank financial company designation process, the Council's 2017 annual report and recent developments relating to money market mutual funds. The FSOC also released minutes from its meeting held on November 16, 2016, during which the Council discussed, among other things, stress tests of central counterparties conducted by the CFTC and an update on the annual re-evaluation of the designation of a nonbank financial company.
Readout | Minutes | Press Release

FDIC and Fed Release Public Sections of Resolution Plans
The FDIC and the Federal Reserve released the public portions of reduced content resolution plans submitted by institutions with less than $50 billion in total U.S. assets and limited U.S. operations subject to the December 31, 2016 deadline.
FDIC | Federal Reserve

Fed Releases Revised Discussion Paper on Credit-Market Conditions
The Federal Reserve Divisions of Research & Statistics and Monetary Affairs released a revised discussion paper entitled "Credit-Market Sentiment and the Business Cycle." Unlike much of the current literature on the role of financial frictions in macroeconomics, this paper suggests that investor sentiment in credit markets can be an important driver of economic fluctuations.
Discussion Paper

OFR Director Berner Writes Blog Post on LEI
The Office of Financial Research has published a blog post written by Director Richard Berner entitled “Promoting Higher Quality and Lower Cost in Financial Regulatory Reporting.” Berner writes about the progress of the Legal Entity Identifier (LEI) and the importance of regulators using shared data standards to avoid inefficient and costly collections of data.
Blog Post

NY Fed Publishes Blog Post on Credit Arbitrage Trades
The Federal Reserve Bank of New York's Markets Group and Research and Statistics Group published a Liberty Street Economics blog post entitled "Trends in Arbitrage-Based Measures of Bond Liquidity." The authors examine recent trends in arbitrage-based measures of liquidity in corporate bond and credit default swap (CDS) markets and evaluate potential explanations for the deterioration in these measures that occurred between the middle of 2015 and early 2016. 
Blog Post

NY Fed Publishes Blog Post on Credit Market Arbitrage and Regulatory Leverage
The Federal Reserve Bank of New York's Markets Group and Research and Statistics Group published a Liberty Street Economics blog post entitled "Credit Market Arbitrage and Regulatory Leverage." The authors turn to the mechanics of the CDS-bond arbitrage trade and explore how the costs and profitability of such trades might be affected by the finalization of the supplementary leverage ratio (SLR) rule in September 2014. 
Blog Post

Timothy Massad Speaks on Financial and Regulatory Reform
CFTC Chairman Timothy Massad delivered a speech on post-crisis financial reform and the impact of recent events on the international regulatory framework at the London School of Economics in London, United Kingdom.
Speech

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Europe

EBA Releases Updated Risk Dashboard for EU Banking Sector
The European Banking Authority (EBA) published today a periodical update of its Risk Dashboard summarising the main risks and vulnerabilities in the EU banking sector by a set of Risk Indicators in Q3 2016. Together with the Risk Dashboard, the EBA published the results of a Risk Assessment Questionnaire, which was conducted among banks and market analysts between October and November this year.
Press Release

EBA Releases Report on Updated Recommendations on Confidentiality Regimes to Include Additional Non-EU Authorities
The European Banking Authority (EBA) has published an amended recommendation on the equivalence of confidentiality regimes. Several additional non-EU supervisory authorities were added to the list of non-EU or third country supervisory authorities whose confidentiality regimes can be regarded as equivalent.
Final Report | Press Release

EBA Issues Opinion on EC Equivalence Decisions for Turkey and New Zealand
The European Banking Authority (EBA) has published its opinion addressed to the European Commission following its assessment of non-EU countries' equivalence with the EU prudential supervision and regulatory requirements, whereby it concluded that the supervisory and regulatory framework applicable to credit institutions in Turkey and New Zealand can be regarded as equivalent to that applied in the Union.
Opinion | Press Release

ESMA Calls for Consistent Application of MiFIR Product Intervention Powers
The European Securities and Markets Authority (ESMA) has issued today an opinion regarding the scope of the product intervention powers under the Markets in Financial Instruments Regulation (MiFIR). These powers can be exercised by both national competent authorities (NCAs) and ESMA from 3 January 2018.
Press Release

ESMA Releases Report on MiFID Best Execution Requirements
The European Securities and Markets Authority (ESMA) finds that national regulators are giving greater attention to best execution requirements under the Markets in Financial Instruments Directive (MiFID) in the follow-up report to its Peer Review published in 2015.
Report | Press Release

Bank of England Releases Andrew Tyrie's Letter to John Vickers on the Approach to Stress Testing
The Bank of England released Governor Andrew Tyrie's letter sent on December 19, 2016 to Sir John Vickers on proposals to supplement the Bank's current approach to stress testing by publishing parallel results that take market-based measures of equity capital, rather than regulatory capital, as a starting point.
Letter | Press Release

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Asia-Pacific

IMF Releases Staff Report on Hong Kong Fiscal and Regulatory Policies
The International Monetary Fund (IMF) released a Staff Report today (January 13) which, substantiated by a more detailed analysis, reinforces the conclusions of its assessment of Hong Kong's economic and financial positions published on December 7, 2016. The IMF complimented the Government's strong policy frameworks, including prudent fiscal policy and vigorous regulation and supervision of the financial system.
IMF Staff Report | HK Government Press Release

MAS Consults on Proposed Amendments to the Capital Framework for Securitisation Exposures and Interest Rate Risk in the Banking Book
The Monetary Authority of Singapore has released a consultation paper on proposed amendments to the capital framework for securitization exposures and Interest Rate Risk in the Banking Book (IRRBB). The proposed amendments to the securitisation framework, to take effect from 1 January 2018, will strengthen capital standards for securitisation exposures, while providing a preferential capital treatment for simple, transparent and comparable securitisations. The proposed framework for IRRBB, to take effect from 31 December 2017, sets out Pillar 2 requirements for the identification, measurement, monitoring and control of IRRBB, and disclosure requirements under prescribed interest rate shock scenarios. Comments are due by February 10, 2017.
Consultation Paper

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GFMA & GFMA - Affiliate News & Events

Join the GFMA & EFAMA LEI Webinar – February 1, 2017
This complimentary Webinar will bring you up-to-date on the global LEI system, which has grown to half a million identifiers. The Webinar will provide updates from key officials on the current status and future regulations that will impact buy and sell side market participants globally, including continued work by the Global LEI Foundation (GLEIF) on implementation of the LEI Regulatory Oversight Committee (ROC) standards on immediate and ultimate parent, as well as the implementation of the EU’s Markets in Financial Instruments Directive (MiFID) in the EU, which will mandate the use of LEI.
Register for the LEI Webinar

Subscribe to GFMA’s Legal Entity Identifier Update Newsletter
Published quarterly, the LEI Update newsletter provides updates on developments surrounding the implementation of the global legal entity identifier (LEI). A unique ID associated with a single legal entity, LEIs allow for consistent identification of parties to financial transactions, facilitating a consistent and integrated view of exposures. The establishment of an LEI system is a foundational and critically important element towards the improved measurement and monitoring of systemic risk. 
GFMA's LEI Page | Sign-Up Now

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