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United Kingdom: Financial System Stability Assessment
August 1, 2011--EXECUTIVE SUMMARY
The past four years have witnessed a crisis of unprecedented proportion in the U.K. financial sector and its regulatory framework. Significant risks posed by large, complex,
and interconnected financial institutions crystallized, exposing weaknesses in the policy and
regulatory framework that had enabled their expansion and complexity, both domestically and internationally. This report is written at a time when the key decisions on the role of the
financial sector and the regulatory framework are still being formulated.
Given the gaps in the crisis management framework, the authorities initially resorted to ad hoc solutions, but thereafter rapidly introduced a new framework. The lack of crisis
management mechanisms meant disruptive and expensive outcomes in the early stages of the crisis. However, decisive actions were taken and an improved framework, including an
enhanced deposit insurance scheme and a new Special Resolution Regime, was implemented to resolve or restructure failing institutions.
view the United Kingdom: Financial System Stability Assessment report
Source: IMF
Boerse Stuttgart generates monthly turnover in excess of EUR 8.3 billion
Turnover up by around 15 percent / Strong growth in bonds, investment funds and equities
July 1, 2011--According to the order book statistics, turnover on the Stuttgart Stock Exchange in July ended the month at over EUR 8.3 billion, approximately 15 percent up on both the previous month and July 2010. The figures for every single asset class showed an increase on June of this year.
At over EUR 4.2 billion, almost 10 percent up on June 2011, securitised derivatives accounted for the biggest share of trading. Leverage products generated turnover in excess of EUR 2.2 billion, while investment products contributed over EUR 2 billion to the overall figure.
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Source: Boerse Stuttgart
FSA publishes new rules for platforms
July 1, 2011--The Financial Services Authority (FSA) has today published rules on platforms regulation. This follows a review of the regulation of platforms in the context of the objectives of the Retail Distribution Review (RDR).
The rules published today extend the consumer protection elements of the RDR into a rapidly developing area of investment services. These new rules have two key aims; firstly, to ensure that consumers receive a better service and, secondly, for the market to be more transparent and operate more efficiently.
The key rules designed to provide better service for consumers:
require platforms and other nominee companies to transfer, within a reasonable time and in an efficient manner, assets held on behalf of customers to another person, when requested; and
require platforms and other nominees to pass on fund information to the end investor.
view PS11/9: Platforms
Source: FSA.gov.uk
Average daily volume of 10 million contracts at Eurex Group in July
July volumes grew at Eurex Exchange and ISE/ Eurex Exchange: KOSPI Product with new peak in volumes
August 1, 2011-- In July 2011, the international derivatives exchanges of Eurex Group recorded an average daily volume of 10 million contracts (July 2010: 8.1 million) – an increase by 24 percent. Of those, 7.2 million were Eurex Exchange contracts (July 2010: 5.6 million), and 2.9 million contracts (July 2010: 2.5 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 151.9 million contracts were traded at Eurex Exchange (an increase of 23 percent) and 57.3 million at ISE (an increase of 8.3 percent).
At Eurex Exchange, the equity index derivatives segment grew by 28.5 percent and totaled 72.5 million contracts (July 2010: 56.4 million). The single largest contract was the future on the EURO STOXX 50 Index with 31.3 million contracts. The option on this blue chip index totaled 29.3 million contracts. Futures on the DAX index recorded 3.0 million contracts while the DAX options reached another 4.2 million contracts. The Eurex KOSPI Product achieved a new monthly record with more than 1.7 million contracts, an ADV of more than 81,000 contracts. On 12 July, a new daily peak was recorded with 170,456 contracts.
The equity derivatives (equity options and single stock futures) segment at Eurex Exchange reached 24 million contracts (July 2010: 30.1 million). Thereof, equity options totaled 18.8 million contracts and single stock futures equaled 5.1 million contracts. Equity derivatives volume y-o-y is influenced by the change of contract specifications: in Q1 2011, Eurex Exchange increased the contract size of most equity options and single stock futures to match international standards, with the effect of potentially lower turnover in these products. The adjusted figure of monthly volume in the equity derivatives segment in July would have been approximately 27 million contracts based on an extrapolation.
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Source: Eurex
Turnover on Xetra grows by 27 percent in July
August 1, 2011--Order book turnover on Xetra and the Xetra Frankfurt specialist trading stood at €118.8 billion in July – an increase by 25 percent year-on-year (July 2010: €94.9 billion). Of the €118.8 billion, €113.3 billion were attributable to Xetra (+27 percent y-o-y, July 2010: €89.3 billion). €5.5 billion were attributable to the Xetra Frankfurt specialist trading, a slight decrease of 3 percent y-o-y (July 2010: €5.7 billion). Order book turnover on Tradegate Exchange totaled €2.6 billion in July, more than doubling y-o-y (+110 percent, July 2010: €1.3 billion).
In equities, turnover reached €96.0 billion on Deutsche Börse’s cash markets (Xetra: €93.7 billion, Xetra Frankfurt specialist trading: €2.3 billion). Turnover in bonds was €1.7 billion, and in structured products €2.2 billion (including Scoach). Order book turnover in mutual funds and exchange-traded funds (ETFs) amounted to €18.9 billion.
A total of 18.3 million transactions were executed on Xetra in July, an increase of 25 percent y-o-y (July 2010: 14.6 million).
The DAX security with the highest turnover in July was Deutsche Bank AG at €6.3 billion. Continental AG led the MDAX equities at €926 million, while Deutz AG topped the SDAX equity index with €65.8 million, and Aixtron SE headed TecDAX with €648.4 million. The ETF with the highest turnover on Xetra was iShares DAX with €5.5 billion.
Further details are available online in Deutsche Börse’s cash market statistics at www.deutsche-boerse.com. For a pan-European comparison of trading locations, see the statistics provided by the Federation of European Securities Exchanges (FESE) at www.fese.be.
Source: Deutsche Börse
ESMA Publishes The Responses Received To The Consulation On The Technical Advice On Possible Delegated Acts Concerning The Prospectus Directive Spain: Selected Issues
2. Rebalancing is a concept in search of a theory. There is limited literature on rebalancing per se. There is an ongoing discussion on rebalancing at the global level, for example within the G20, but the country level discussion of rebalancing is incipient. 2 Still, if rebalancing is sometimes hard to define (what does it cover? what is the balance we are looking for? have economies ever been balanced?), imbalances are slightly easier to identify. view the Spain: Selected Issues paper Moody's Sees Contagion Risks, Puts Spain Under Review In comments that underline concerns over the impact of last week's deal for a second Greek bailout package on other troubled European economies, Moody's said the arrangement--which includes provisions for private-sector debt holders to swap Greek bonds for others with longer maturities--may fail to remove pressure on Spanish ratings. Moody's added the Greek agreement has mostly negative implications for sovereign debt in the euro zone as a whole. read more
Flash estimate - July 2011 Euro area inflation estimated at 2.5%
Euro area inflation is measured by the Monetary Union Index of Consumer Prices (MUICP). To compute the MUICP flash estimates, Eurostat uses early price information relating to the reference month from Member States for which data are available4 as well as early information about energy prices.
The flash estimation procedure for the MUICP combines historical information with partial information on price developments in the most recent months to give a total index for the euro area. No detailed breakdown is available. Experience has shown the procedure to be reliable (19 times exactly anticipating the inflation rate and 5 times differing by 0.1 over the last two years). Further information can be found in Eurostat News Release 113/2001 of 5 November 2001. view more STOXX Limited launches Global Rare Earth Index The STOXX Rare Earth Index is designed to underlie exchange-traded funds and other investable products, as well as to be used to assess the performance of global equity portfolios.
“The demand for rare earth metals is increasing exponentially as they are used in a wide range of modern technology, from iPods to hybrid cars, wind turbines and batteries,” said Hartmut Graf, chief executive officer, STOXX Limited. “With the launch of the STOXX Global Rare Earth Index, we offer market participants an innovative, transparent and completely rules-based tool to participate in the performance of companies that are involved in this rapidly growing sector.” Rare earth metals are part of a group of 17 chemically similar elements found in the earth’s crust. Despite their name, rare earth metals are more abundant than gold, platinum or lead. The term “rare” is derived from the fact that these elements are rarely found in high concentration in a single reserve and are primarily mined in China at present. The metals are found almost exclusively in connection with other minerals or metals, as they are often extracted as a by-product in the mining of other raw materials.
All companies that generate at least 30% of their revenues in the rare earth sector globally, or are estimated to do so based on their current operating activities, and have an average daily value traded (ADVT) of at least 1 million US dollars are eligible for inclusion in the index. The rare earth sector covers companies with operations involving exploration, extraction, transport, processing or any other business involving any of the following 17 rare earth elements: Scandium, Yttrium, Lanthanum, Lutetium, Ytterbium, Thulium, Erbium, Holmium, Dysprosium, Terbium, Gadolinium, Europium, Samarium, Promethium, Neodymium, Praseodymium, and Cerium.
The STOXX Global Rare Earth Index is weighted by free-float adjusted market capitalization. The index currently consists of 14 components. It is rebalanced quarterly, and component review takes place semi-annually in March and September. The new index is available in price, gross and net return versions in euro and U.S. dollar. Daily history is available back to June 19, 2009.
For further information on the STOXX Global Rare Earth Index, please visit www.stoxx.com. If you are looking for a particuliar article and can not find it, please feel free to contact us for assistace.
July 29, 2011--To see the responses,
please click here.
Source: ESMA
July 29, 2011--I. HOW MUCH HAS SPAIN’S PRIVATE SECTOR REBALANCED?
EXITING FROM A CREDIT AND HOUSING BOOM1
Rebalancing is underway, with flows adjusting significantly, but with more modest progress on reducing stocks. The weight of construction and real estate in GDP, employment, and new lending has largely adjusted from previous excessive levels, but will likely remain weak as overhangs (including of housing prices and unsold units) persist. Private sector debt levels
have stabilized at high levels – how much they have to fall is unclear, but it could be significant and long lasting.
Source: IMF
July 29, 2011-- Rise in funding costs remains central concern
Regional deficit risk is a big factor
Greek bailout package seen as ratings negative for Spain, others
Moody's Investors Service Friday put Spain's Aa2 ratings on review for possible downgrade, saying the euro zone's fourth-largest economy faces rising contagion risks as the area's debt crisis may keep funding costs on the upswing.
The warning hit Spanish debt. In early trade Friday, the yield on Spain's 10-year government bond was up 1.7 percentage points to 6.136%. The spread between this Spanish bond and similar German debt widened to 354.2 basis points.
Source: Wall Street Journal
July 29, 2011--Euro area1 annual inflation2 is expected to be 2.5% in July 2011 according to a flash estimate issued by Eurostat, the statistical office of the European Union. It was 2.7% in June3.
Computation of flash estimates
Source: Eurostat
July 28, 2011--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today introduced the STOXX Global Rare Earth Index, which consists of companies that generate at least 30% of their revenues in the rare earth sector globally.
The importance of what is known as “rare earth” metals is growing as these elements are used in a multitude of high-tech products such as mobile telephones, hard drives, lasers and electric car batteries.
Source: STOXX
