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Claim of short-selling ban victory in Europe
February 27, 2012--It came in with a bang and departed with more of a whimper
Imposed with fanfare in the dead of night, the first attempt by European countries at a co-ordinated ban on short selling of financial stocks turned out to be less momentous than either its proponents had hoped or its critics had feared. That is the verdict of market participants, academics and regulators.
Spain's 2011 budget deficit exceeds 8.5%
February 27, 2012--Spain's public sector deficit reached 8.51 per cent of the country's gross domestic product last year, well beyond the 6 per cent target agreed with the European Union and even higher than the estimate made by the centre-right government after it took power in December.
“We are going to put the measures in place so that this overshoot is not repeated,” Cristóbal Montoro, budget minister, said in Madrid on Monday night after revealing “the number we will send to Brussels”.
S&P: Greece in 'selective default'
February 27, 2012--Ratings firm Standard & Poor's on Monday declared Greece in "selective default" after banks agreed to write off more than half of their Greek debt holdings in a second EU bailout of the country.
The rating was lowered from S&P's already junk-level "CC" grade for Greece, which has been seeking to avoid an outright default on its massive debt by negotiating a "voluntary" debt exchange with creditors.
Standard & Poor's cuts euro rescue fund outlook to negative
February 27, 2012--Standard and Poor's on Monday cut its rating outlook on the EFSF, the eurozone bailout fund, to 'negative', meaning it could be downgraded outright in the future as the eurozone debt crisis develops.
"We have concluded that credit enhancements sufficient to offset what we view as the reduced creditworthiness of the European Financial Stability Facility (EFSF) guarantors are not likely to be forthcoming," S&P said.
Credit Suisse Provide Q4 Market Commentary on European ETFs
European ETFs ended a challenging 2011 with total assets of USD 259.88 bn and net new assets of USD 18.23 bn.
Positive inflows in the first seven months of the year began to reverse in August. A divide opened up between physically replicated funds, with continued positive inflows, and synthetically replicated ETFs which - coming under intense regulatory scrutiny - experienced large outflows. Relatively speaking, the European ETF market weathered the storm much better than the larger UCITS industry.
February 26, 2012--Credit Suisse ETFs Sales Strategist Ursula Marchioni reviews the ETF industry trends in her quarterly market commentary. Key findings of the quarter are:
Political uncertainty in Europe
Political uncertainty and the lack of a comprehensive solution to the euro sovereign debt crisis continued to impact European ETFs in Q4. After a flat October, outflows accelerated in November and December. In contrast, the US ETF market - facing similar underlying macroeconomic issues to Europe - did not experience the same crisis of confidence. Most likely due to its more mature and less fragmented status, the US ETF market, recorded a very different year to Europe, with inflows of USD 115.76 bn and only one negative month (May).
view the Year-end 2011 Market Commentary on European ETFs
Investment Fund Assets Withstood Turbulence which Engulfed Financial Markets in 2011
February 26, 2012--The European Fund and Asset Management Association (EFAMA)published its latest Quarterly Statistical Release for the fourth quarter of 2011.
These final quarter statistics describe the trends in the European investment fund industry for the fourth quarter and overall in 2011.
Based on the report, please see the following highlights for 2011:
Asset growth and net sales in 2011:
Investment fund assets in Europe decreased by 2.8 percent to EUR 7,920 billion: overall, net assets of UCITS decreased by 6.2 percent to EUR 5,634 billion, after registering net outflows of EUR 88 billion during the year. Net assets of non-UCITS increased by 6.8 percent to EUR 2,286 billion, on the back of continued strong net inflows into special funds (EUR 101 billion).
Long-term UCITS experienced a sharp decline in demand: long-term UCITS experienced net outflows of EUR 55 billion in 2011, against net inflows of EUR 290 billion in 2010. This reversal started in August when the downgrading of the U.S. government debt and the euro crisis unraveled financial markets, leading to strong withdrawals from equity, bond and balanced funds.
Intense competition from the banking sector affected demand for money market funds: money market funds continued to record net outflows in 2011, albeit less than in 2010 (EUR 33 billion compared to EUR 122 billion).
ECB-Monetary developments in the euro area January 2012
February 26, 2012--The annual growth rate of the broad monetary aggregate M3 increased to 2.5% in January 2012, from 1.5% in December 2011.1
The three-month average of the annual growth rates of M3 in the period from
November 2011 to January 2012 stood at 2.0%, unchanged from the previous period.
Greece to launch bond swap
February 24, 2012--Greece will launch a bond swap on Friday under a deal with private investors to write off €107bn from its debt mountain of €350bn.
The bond swap, in effect a cancellation of nearly a third of debt owned by Greece, is a critical part of a debt rescue stitched together with immense difficulty by the eurozone and International Monetary Fund (IMF) to avert imminent default.
ESMA readies guidelines on automated trading- application deadline starts
February 24, 2012--ESMA today publishes the official translations of its final "Guidelines on systems and controls in an automated trading environment for trading platforms, investment firms and competent authorities" (ESMA/2011/456), first published on 21 December 2011. High Frequency Trading (HFT) is one form of automated trading.
By having translated the guidelines into all the official languages of the EU, today’s publication triggers a transitional period of two months within which national supervisors have to declare whether they intend to comply with the guidelines or otherwise explain the reasons for non-compliance which would be made public by ESMA.
Derivatives: Council's position updated ahead of talks with EP
February 24, 2012--The Council today1 adjusted its position in negotiations with the European Parliament on a draft regulation aimed at increasing transparency on all derivatives and reducing risk in the
over-the-counter2 (OTC) derivatives market. This is designed to facilitate rapid agreement with the Parliament, so as to enable the regulation to be adopted in first reading.
The main change to a general approach agreed by the Council in October relates to the procedure for authorising central counterparties (CCPs)3, in particular to the powers of the CCP's "home" member state, i.e. the member state of establishment, versus those of the college of supervisors4 and the European Securities and Markets Authority (ESMA).
A general approach agreed in October specified that a CCP authorisation by a member state competent authority could only be blocked by a negative opinion of the college supported by a "unanimity minus one" vote (i.e. all the members of the college, excluding the authorities of the "home" member state). However, in order to facilitate agreement with the Parliament, which is pushing for a stronger role for the college and for ESMA, the Council today approved a proposal by the presidency which would introduce two additional safeguards, whereby:
