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The EBA details the EU measures to restore confidence in the banking sector
October 26, 2011--The European Banking Authority (EBA) supports the agreement at EU level on measures to restore confidence in the banking sector. These measures form part of a broader package aimed at addressing the current situation in the EU by restoring stability and confidence in the markets. Their implementation is conditional on the other components of the package being fully clarified and endorsed.
The EBA’s contribution to the overall package focuses on the capital and term funding needs in the EU banking sector against the backdrop of the increasing concerns regarding sovereign debt.
Term funding guarantee scheme
Notwithstanding the European Central Bank’s (ECB) support for banks short term funding needs, additional steps are required to restart the term unsecured funding market. This would help banks to continue their lending activities in 2012 and to avoid a spiral of forced deleveraging and the ensuing credit crunches, which would affect the real economy.
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Source: European Banking Authority
Largest ever EU rebellion rocks British PM
October 25, 2011--David Cameron on Monday suffered his largest parliamentary rebellion since becoming prime minister as 79 Conservative MPs defied their leader to vote in favour of holding a referendum on Britain's EU membership.
Cameron's government, which is against holding a referendum, in the end won the House of Commons vote 483-111 due to support from the Liberal Democrats -- the Conservatives' euro-friendly junior coalition partners -- and the main opposition Labour Party.
But the eurosceptic wing of the Conservative Party delivered Cameron a blow by ignoring whip pressure to vote in favour of a referendum in the biggest show of internal party dissent since he took office in May 2010.
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Source: EUbusiness
Eurozone private sector activity deteriorates
October 25, 2011--The real economy across the eurozone is suffering a painful contraction amid deep uncertainty over Europe's response to the debt crisis, analysts said Monday after the release of downbeat new data.
Private sector activity across the 17 states that share the single currency slid further in October, a deterioration highlighting the threat of recession, a closely-watched survey showed.
The survey of 4,500 eurozone companies indicated a second consecutive month of contraction amid weaker demand for goods and services, according to the Purchasing Managers Index (PMI) compiled by Markit research firm.
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Source: EU business
iShares launches global equity ETF offering emerging market exposure
October 25, 2011--iShares, the Exchange Traded Funds (ETF) platform of BlackRock, Inc, has launched the iShares MSCI ACWI (All Country World Index) ETF, offering exposure to companies from up to 45 developed and emerging markets.
Listed on the London Stock Exchange (LSE) today, the fund is physically replicating meaning it holds the underlying physical securities and aims to track the MSCI All Country World Index Net USD. The fund is optimised, holding a subset of the index constituents for efficient portfolio management.
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Source: ETF Express
Unscheduled free float adjustment in SDAX
Adjustment for Derby Cycle as of 28 October 2011
October 25, 2011--Deutsche Börse has announced an unscheduled adjustment to the free float of Derby Cycle AG O.N. in SDAX®. Due to the takeover of Derby Cycle AG O.N. by PON Holding Germany GmbH, the free float of the SDAX member altered by more than 10 percentage points.
According to the index rules, the company’s free float will be decreased from the current 69.68 percent to 35.33 percent.
The adjustment will become effective on Friday, 28 October 2011.
The next regular review of the Deutsche Börse equity indices is scheduled for 5 December 2011.
Source: Deutsche Börse
European Parliament-Global finance and its institutions need a facelift
October 25, 2011--In the run-up to the November G20 summit in Cannes, Parliament on Tuesday adopted its contribution to reviewing global economic governance by a large majority. The resolution calls for an overhaul of the IMF, primarily to make it a more political body, a halt to political meddling with exchange rates, and global rules to separate speculative banking activities from traditional retail ones. The G20 is also called upon to agree on the elements for a global financial transaction tax.
The resolution, drafted by Gunnar Hokmark (EPP, SV) also calls for stronger global financial regulation and supervision to close loopholes, and highlights the need to address existing imbalances between world economies so as to avoid further turbulence, something the G20 has so far struggled hard to do.
A political IMF
The resolution calls on the IMF to fulfil its growing role by becoming more legitimate, transparent and accountable. To this end, the resolution proposes that its managing director be elected through an "open and merit based" process and also calls for a fairer distribution of voting rights. Finally the text calls for a widening of the IMF's mandate, primarily to monitor single economies of systemic importance and not only cross-country surveillance.
More broadly, the resolution calls for better democratic accountability to be developed for the IMF, World Bank and the "G" formations, particularly the G20 and for all these financial institutions to coordinate their work better.
A financial sector of service to the economy
Among the various elements proposed for making the global financial sector safer and better controlled, the resolution advocates two crucial items. Firstly, it calls for the G20 to conclude discussions "without further ado" on the basic components of a global financial transaction tax. This call was backed by a large majority (594 in favour, 62 against, 3 abstentions).
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Source: European Parliament
Bankers fear political moves will kill off CDS
October 25, 2011--It has been blamed by politicians for causing the eurozone debt crisis and attacked as the favoured asset of “evil speculators”.
Now, politicians are seeking to take their revenge: not just with the recent introduction of bans on some trading of credit default swaps but also in their attempts to ensure that any haircut on Greek government bonds does not trigger a credit event.
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Source: FT.com
The Independent Commission on Banking: six weeks on1
October 24, 2011-Six weeks on from the publication of its final report, Angela Knight reminds policy makers that the ICB is a body that recommends, not a body that decides.
The BBA Chief Executive reviews ICB recommendations in a blog posted on the BBA website today. Her comments focus on the retail ring-fence and an increase in loss-absorbing capital and emphasise the real cost of these proposals to the economy, to banks and to customers.
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Source: BBA
Eurex completes migration to new data centre
Matching engine successfully migrated
October 24, 2011--The international derivatives exchange Eurex has completed the re-location of its active matching engines into a new single data centre.
With this step, Eurex achieved a further milestone of its technology roadmap. The active Eurex trading and clearing infrastructure is now located in the International Business Exchange (IBX) data centre of the international IT company Equinix Inc., a global provider of data centre services. Eurex and Equinix have already been offering the co-location solution Proximity Services since 2006.
As part of the migration, Eurex upgraded and replaced all of the matching engines with the latest high-performance hardware. As consequence, all Eurex members benefit from an increased throughput of the Eurex system.
Since Deutsche Börse had already moved the Xetra cash market in July 2011 the migration of the Eurex system enables Deutsche Börse Group to offer its clients co-location services for derivatives and cash markets from a single location. Clients also benefit from the fact that as one of the largest global providers of data centre services, Equinix bundles a large number of exchange-related service providers, including data vendors, under one roof. Moreover, through the linkage of many telecommunication providers, Eurex participants can choose the access to the Equinix data centre that is the most cost-effective for them.
Source: Eurex
Bank of England's Paul Tucker calls for reform of clearing houses
October 24, 2011--Laeders must agree on effective regimes to wind down the world's clearing houses in the event of collapse, or risk "mayhem" on financial markets, a Bank of England policymaker has warned.
Paul Tucker, a deputy governor of the Bank, said the issue needed attention because clearing houses had become centres of systemic risk in their own right, with potentially huge consequences in the event of failure.
Speaking at a European Commission conference in Belgium, he said: "There is a big gap in the regimes for central counterparties (CCPs).
"What happens if they go bust? I can tell you the simple answer: mayhem. As bad as, conceivably worse than, the failure of large and complex banks."
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Source: Telegraph
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