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AFME And ICMA Announce New Co-Operation Agreement
September 20, 2011--The Association for Financial Markets in Europe (AFME) and the International Capital Market
Association (ICMA) have announced the signing of a Memorandum of Understanding (MoU) which
will strengthen their co‐operation on matters of mutual interest in European financial markets. The
agreement is focussed on streamlining communication between the two associations and eliminating
any operational inefficiency which could arise through duplication of effort. The aim is to maximise
the influence of each association on behalf of its individual members.
AFME and ICMA represent different sectors within the capital markets and different, although
partially overlapping, membership bases. Under the new arrangement, each retains its current
structure and independence.
Collaborative efforts will be directed towards agreeing a common approach to regulatory developments in Europe which affect both associations’ members. Examples would include the sharing of information and responses to consultations and attending each other’s relevant committees and councils as observers.
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Source: Association for Financial Markets in Europe (AFME)
Germany plans crisis group for euro emergencies: draft law
September 20, 2011--Germany is poised to establish a small group of deputies empowered to give rapid parliament decisons, such as buying bonds, in future debt crises, according to a draft bill seen by AFP Tuesday.
The draft legislation, drawn up by lawmakers from Chancellor Angela Merkel's ruling coalition, would allow a sub-committee of the parliament's budgetary group to give its assent in situations where extreme speed is required.
Members of this committee "will be able to take the necessary decisions quickly and confidentially," the draft says, adding that the number of people should be kept "as small as possible."
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Source: EUbusiness
The debt crisis in the eurozone
August 19, 2011--Key dates in the latest phase of Europe's financial crisis:
JULY
- 21: Eurozone leaders agree on a new bailout of Greece totalling 159 billion euros ($216 billion), involving for the first time private bondholders such as banks. Greece's debt comes to some 350 billion euros, more than 150 percent of gross domestic product.
AUGUST
- 3: New market pressure on Italy, whose debt comes to more than 1,900 billion euros, and on Spain. Borrowing costs for the two countries hit record heights.
- Fears emerge that France could be the next country to suffer a debt crisis.
- 11: Stock exchange authorities in France, Italy, Spain and Belgium ban the financial technique known as "short selling".
- 12: Italy's cabinet approves a 45.5-billion-euro austerity budget.
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Source: EUbusiness
Scandal at UBS points to mix of failures
September 19, 2011--Who and what are to blame for the $2bn in “unauthorised” trading losses that have hit UBS, the latest in a line of rogue trading scandals to rock the investment banking industry?
Was it lax risk management and controls across the Swiss group, whose once-sterling reputation was all but destroyed during the crisis by $50bn in toxic writedowns and a bruising investigation into whether it helped wealthy clients to evade US tax?
Was it a failure of senior UBS executives to understand the complexity of some of the trades being made by relatively junior employees such as Kweku Adoboli, 31, the director who was remanded in custody on Friday after being charged with fraud and false accounting in connection with the losses?
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Source: Financial Express
High deficit exposes Turkey to shocks
September 18, 2011--Turkey is vulnerable to external shocks because of its high current account deficit, but the risk will diminish as the economy slows from its blistering rate of growth, Mehmet Simsek, the country’s finance minister, has told the Financial Times.
"Yes, we have a very large current account deficit and we are concerned about it . . . and I do take on board that a large current account deficit makes us more vulnerable to external shocks,” he said in an interview. “But at the same time other fundamentals in Turkey are strong enough to manage things.”
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Source: FT.com
UBS Provides More Detailed Information On Unauthorized Trading
September 18, 2011--On September 15, 2011 UBS announced that it had discovered unauthorized trading in its Investment Bank. This trading was conducted by a trader in its Global Synthetic Equity business in London. The trader in question has been charged by UK authorities with fraud by abuse of position.
Before making a further announcement, we needed to be certain that we understood the positions that were booked and that we knew the amount of our resulting loss.
We have now covered the risk resulting from the unauthorized trading, and the equities business is again operating normally within its previously defined risk limits. The loss arising from this matter is USD 2.3 billion. As previously stated, no client positions were affected.
The loss resulted from unauthorized speculative trading in various S&P 500, DAX, and EuroStoxx index futures over the last three months. The positions taken were within the normal business flow of a large global equity trading house as part of a properly hedged portfolio. However, the true magnitude of the risk exposure was distorted because the positions had been offset in our systems with fictitious, forward-settling, cash ETF positions, allegedly executed by the trader. These fictitious trades concealed the fact that the index futures trades violated UBS's risk limits.
Following inquiries directed to him by UBS control functions that were reviewing his positions, the trader revealed his unauthorized activity on September 14, 2011.
UBS's Board of Directors has set up a special committee to conduct an independent investigation of the unauthorized trading activities and their relation to the control environment. The committee will be chaired by David Sidwell, the Senior Independent Director, and will report to the Board of Directors. The other members of the committee are Ann Godbehere and Joseph Yam.
UBS news: http://www.ubs.com/1/e/about/news.html
Source: UBS
Eurozone-only transaction tax possible: Germany
September 17, 2011--A proposed tax on financial transactions could be introduced in the eurozone alone, German Finance Minister Wolfgang Schaeuble said in an interview to be published Sunday.
"The ban on 'naked' short selling was only the beginning of the measures we are taking," Schaeuble told Bild am Sonntag.
"Before the end of the autumn we are going to create a tax on financial transactions. If necessary, I'm sure, just in the eurozone," he added.
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Source: EUbusiness
Calls for ETF ban in wake of UBS rogue trader scandal
September 16, 2011--City veterans called for a ban of Exchange Traded Funds (ETFs) yesterday as the UBS rogue trading scandal put a spotlight on to the financial market's latest money-spinning wheeze.
ETFs have become increasingly popular, and until recently were the only place trading desks were hiring. Yet they have also been dogged by criticism from some in the City and faced scrutiny both in London and on a European and global level, and regulators have been threatening to derail their recent spectacular rise.
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Source: The Independant
NASDAQ OMX Starts Trading In New China ETF From XACT Fonder
September 16, 2011 — NASDAQ OMX Stockholm, part of the NASDAQ OMX
Group (NASDAQ:NDAQ), today starts trading in a new exchange traded fund (ETF), XACT China (short name: XACT Kina). The new ETF issued by XACT Fonder is based on the Hang Seng China Enterprises Index (HSCEI), which tracks the performance of the 40 largest Chinese companies listed on the Hong Kong exchange.
Henrik Norén, CEO XACT Fonder, said: “China's strong economic development is
going to be a feature of the financial markets for many years to come, and
through this new product we can offer our customers the opportunity to take
part in that journey in a simple way. XACT China responds to the increasing
demand for new EFTs that together can form the basis of a complete investment
portfolio with a good diversification of risk.”
Jenny Rosberg, Senior Vice President NASDAQ OMX, commented: “XACT China provides investors with an easy and cost-efficient means to gain exposure against one of the world's most traded indexes. Our Nordic ETF portfolio today covers many international indexes allowing private investors to build a global portfolio at low costs.”
An ETF is an index fund which trades like a stock on an exchange. ETFs are a
complement to actively managed funds and provide investors with the possibility to invest in well known global indices in the local currency.
Source: NASDAQ OMX
Moody's continues to mull Italy downgrade
September 16, 2011--Rating firm Moody's said Friday it was still weighing whether to cut Italy's credit rating amid increasing uncertainty in the eurozone over sovereign debt.
"Moody's will strive to conclude the review within the next month," the firm said in a statement, three months after it announced the review of Italy's credit for a possible downgrade.
Italy, the eurozone's third-largest economy, has a credit rating of Aa2, two notches below Moody's top triple-A rating.
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Source: EUbusiness
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