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ESMA TRV: market conditions improve, as systemic risks persist
September 20, 2013-The European Securities and Markets Authority (ESMA) published today its Trends, Risks, Vulnerabilities (TRV) Report (Ref. 2013/1138) and a Risk Dashboard for the second quarter of 2013.
The TRV examines the performance of securities markets in the first half of 2013, assessing both trends and risks in order to develop a comprehensive picture of systemic and macro-prudential risks in the EU, to assist both national and EU bodies in their risk assessments. ESMA's TRV contributes to promoting financial stability and enhancing consumer protection by regularly looking into cross-border and cross-sector trends, risks and vulnerabilities, both at the wholesale and retail level.
The TRV finds that EU securities markets and investment conditions in the EU have improved for a second quarter in a row since the 4th quarter of 2012, although systemic risk persisted at medium to high levels. Amongst other risk factors, uncertainty remained high due to concerns over funding sources, low interest rates and recent market fluctuations, resulting in increased market risk, while liquidity, credit and contagion risk continue to be significant.
view more view the ESMA report- Trends, Risks, Vulnerabilities (TRV) Report Banks Face Fines for Benchmark Safeguard Breaches in EU Plan Euro area investment fund statistics Proposal for a Regulation on indices used as benchmarks in financial instruments and financial contracts-FAQs
Benchmarks determine the value of many financial instruments and payments under many financial contracts as well as being used to measure the performance of investment funds; e.g. the interest rate paid on a mortgage can be set by reference to an interest rate benchmark, and the investment and pension funds in which many citizens invest use benchmarks. Estimates suggest that the value of financial instruments and contracts referenced by benchmarks exceeds 1 000 trillion euro. If benchmarks do not reflect accurately what they are meant to measure, the price or payments will not be fair. Benchmarks can fail to measure what they are meant to when they are manipulated or are not representative. Confidence in their use may also be undermined when they are not robust and reliable.
New measures to restore confidence in benchmarks following LIBOR and EURIBOR scandals The manipulation of the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) has resulted in multi-million euro fines on several banks in Europe and the US, and allegations of manipulation of commodity (e.g. oil, gas and biofuel) and exchange-rate benchmarks are also under investigation. The prices of financial instruments worth trillions of euro depend on benchmarks, and millions of residential mortgages are also linked to them. As a result, benchmark manipulation can cause significant losses to consumers and investors, distort the real economy, and undermine market confidence.
European ETFs: Recent Trends & Challenges Ahead: from Lipper Assets under management grew by €34.84bn or 15.23% over the last twelve months (30.06.2012 -30.06.2013) up to €263.57bn Only 41 of the 1743 European ETFs hold assets above €1bn. The majority of these funds (28) are equity funds, followed by bond funds (11) and commodity funds (2) that invest in physical gold The largest ETF (iShares DAX) holds 5.29% of overall AUM
The ten largest ETFs account for 24.96% of overall assets under management in the European ETF segment. The 41 ETFs with more than 1 billion in assets under management account for 44.55% of the overall AUM DB-Synthetic Equity & Index Strategy-Europe-ETF Research-European Weekly ETF Market Review NYSE Euronext announces new ETFs on European markets-Lyxor ETF Symbol: WIG NYSE Euronext now has 652 listings of 562 ETFs listed on its European markets.
Boost Research-'Unstoppable QE exit undermines gold and silver' Silver's high correlation to gold implies macro uncertainties continue to overwhelm its fundamentals. Silver remains a leveraged bet on gold. Peter Kaufmann to join BNP Paribas as head of high yield trading
September 18, 2013--Banks risk fines as high as 10 percent of their yearly sales for failing to set up adequate safeguards to combat benchmark rigging, under European Union anti-manipulation rules presented today.
Michel Barnier, the EU's financial services chief, called for the sanctions as part of sweeping plans to toughen regulation of benchmarks underpinning more than 1,000 trillion euros ($1,335 trillion) of financial contracts ranging from oil and sugar to mortgages and foreign-exchange swaps.
September 18, 2013--In July 2013, the amount outstanding of shares/units issued by euro area investment funds other than money market funds was €132 billion higher than in June 2013.
This increase was due almost equally to increases in share/unit prices and to net issues of shares/units.
The amount outstanding of shares/units issued by euro area investment funds other than money market funds increased to €6,943 billion in July 2013, from €6,812 billion in June
2013. Over the same period, the amount outstanding of shares/units issued by euro area money market funds decreased to €844 billion, from €849 billion.
September 18, 2013--General questions
1. What are indices and benchmarks and how are they used in financial markets?
An index is a statistical measure, typically of a price or quantity, calculated from a representative set of underlying data.
When this index is used as a reference price for a financial instrument or financial contract it becomes a benchmark. Notable examples are the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) which serve as benchmarks for interest rates. The manipulation of LIBOR and EURIBOR has sparked concerns about the integrity of benchmarks around the world.
September 18, 2013--The Commission has today proposed draft legislation to help restore confidence in the integrity of benchmarks. A benchmark is an index (statistical measure), calculated from a representative set of underlying data, that is used as a reference price for a financial instrument or financial contract or to measure the performance of an investment fund.
The new rules will enhance the robustness and reliability of benchmarks, facilitate the prevention and detection of their manipulation and clarify responsibility for and the supervision of benchmarks by the authorities. They complement the Commission’s proposals, agreed by the European Parliament and Council in June 2013, to make the manipulation of benchmarks a market abuse offence subject to strict administrative fines (see MEMO/13/774).
September 17, 2013--The European ETF market is highly concentrated and this pattern will not change in the foreseeable future, according to Detlef Glow, Lipper's head of EMEA research, in his latest analysis.
Highlights include:
September 17, 2013--The report includes key statistics on the European ETF market as well as global ETF market highlights.
request report
September 17, 2013--NYSE Euronext is pleased to announce that Lyxor has listed two new ETFs on NYSE Euronext Paris on September 17, 2013:
ETF Symbol: SP5H
Listing date:17/09/2013
ETF Trading name: LYXOR ETF S&P 500
Underlying index: S&P 500 Net Total Return Index
TER: 0.15%
Listing date:
17/09/2013
ETF Trading name: LYXOR ETF WIG 20
Underlying index: WIG 20 Price Return
TER: 0.45%
September 17, 2013--Summary: The downside risk to gold increases as the possibility of a political settlement in Syria and improving job market conditions prevent delaying a QE exit.
Implied volatility of gold since its April price plunge remains elevated. At a 10% premium to equities, gold remains vulnerable to the stimulus withdrawal. Equities’ low volatility signals macro risks are manageable.
September 17, 2013--BNP Paribas has hired Peter Kaufmann as head of high-yield credit trading, reporting to Olivier Renart, the deputy head of credit trading, according to sources.
Kaufmann's hire comes alongside that of Matt Smith as head of loans and distressed trading Europe, and George Spierings as a senior leveraged loan and distressed-sales person.
