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European securitisations face S&P downgrade
January 17, 2011--Nearly half of all European securitisations could be downgraded following changes in the criteria Standard & Poor’s uses to measure the creditworthiness of deals.
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The criteria, which cover how third parties involved in deals are evaluated, are global but the new changes will more heavily affect European deals because of their higher use of counterparties to provide interest rate and currency swaps.
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Source: FT.com
Deutsche launches research for index investors
A research service specifically for index investors has been launched by Deutsche Bank.
January 17, 2011--Deutsche claimed the launch was a first for the investment research industry.
Fundamental Index Views, the first of which analyses prospects for the German Dax30 equity index, will become a regular feature of the bank’s research output for institutional investors.
Deutsche Bank said with more investors seeking to take market exposure via exchange-traded funds (ETFs) in particular, as well as other index-based products, it has identified demand for a service dedicated to regular analysis of the index market.
The reports will be published without individual product recommendations, and will focus purely on analysing indices.
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Source: FTAdvisor
Turkish banks to electronically transfer gold
January 14, 2011--?stanbul Gold Exchange (?AB) Chairman Osman Saraç has said they are working on a project enabling Turkish banks to transfer gold between accounts.
Saraç, the head of ?AB, told the Anatolia news agency on Friday that they are working on a system where people can transfer gold, similar to how they send money with the Electronic Fund Transfer (EFT) system. The amount of gold transferred will then appear in their accounts and they will be able to physically withdraw their gold from the ?AB.
Within the framework of forming the gold exchange system, the ?AB has conducted talks with the Turkish Banks Association (TBB) and the Association of Turkish Participation Banks (TKBB).
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Source: Todays Zaman
ECB: MFI statistics 2011: the number of monetary financial institutions in the euro area and in the EU decreases further
January 14, 2011--On 1 January 2011 the total number of monetary financial institutions (MFIs) [1] in the euro area stood at 7,865. There is a net decrease of 211 units (2.6%) in comparison with the situation a year ago. The decline was spread across the whole of the euro area. The number of MFIs in the euro area went up by 37 units when Estonia joined the euro area on 1 January 2011. There were 9,921 MFIs in the European Union (EU) as a whole, a net decrease of 271 units.
Number of MFIs
On 1 January 2011 there were 7,865 MFIs resident in the euro area, compared with 8,076 on 1 January 2010. In relative terms, the decrease in France and Greece of 7.1% and 6.7% respectively was particularly pronounced. In absolute terms, France (-92), Ireland (-31), Luxembourg (-28) and Italy (-25) were the main contributors to the net decrease of 211 units in the euro area.
Despite the enlargement of the euro area through the accession of Greece (2001), Slovenia (2007), Cyprus and Malta (both 2008), Slovakia (2009) and Estonia (2011), the number of MFIs in the euro area has decreased by 20.2% or 1,991 institutions since 1 January 1999. On 1 January 2011 Germany and France accounted for 40.8% of all euro area MFIs, a share similar to that recorded on 1 January 2010.
On 1 January 2011 there were 9,921 MFIs resident in the EU, a net decrease of 271 units (-2.7%) since 1 January 2010. Compared with the situation on 1 January 1999 (10,909 MFIs in the EU), there has been a net decrease of 988 units (-9.1%), despite the addition of 1,608 MFIs on 1 May 2004, when ten new Member States acceded, and of a further 72 MFIs on 1 January 2007, when Bulgaria and Romania joined the EU.
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Source: ECB
CESR publishes Consultation on CESR’s Guidelines on Risk Measurement and the Calculation of Global Exposure for certain types of structured UCITS
January 13, 2011--Publication of the responses to the Consultation on CESR’s Guidelines on Risk Measurement and the Calculation of Global Exposure for certain types of structured UCITS
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Source: CESR
‘Turkey to grow twice world economic growth in 2010’
January 13, 2011--The World Bank suggests that Turkey will double the world economic growth, which is estimated at 3.9 percent, with a growth figure of 8.1 percent in 2010.
According to the January edition of the Global Economic Prospects 2011 report prepared by the World Bank, Turkey’s gross domestic product (GDP) growth is expected to register 8.1 percent for this past year.
The growth of the world’s output in 2010 is estimated to be around 3.9 percent, while the growth figures for Organization for Economic Cooperation and Development (OECD) countries is estimated at 2.7 percent. The estimates for the GDP growth of the eurozone sit at 1.7 percent. This shows that Turkey is expected to double the GDP growth of the world.
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Source: Todays Zaman
Deutsche Börse and Clearstream launch joint funds trading on exchange
January 13, 2011--More than 80,000 mutual funds can be made eligible for trading via Xetra - Major advantages: cost reduction, immediate execution, price transparency and reduction of operational risks - Potentially 700 billion euros of new collateral through re-use of funds shares
Deutsche Börse and Clearstream, the central securities depository (ICSD) within Deutsche Börse Group, have launched their joint funds trading on Deutsche Börse’s cash market Xetra.
As of today, more than 80,000 investment funds that are currently on Clearstream’s order routing platform Vestima+ can be introduced for trading via Xetra by market makers (funds specialists). After execution, the funds will be settled through Clearstream’s post-trade facility for mutual funds, the Central Facility for Funds (CFF).
Currently, in the primary market, the value of an individual funds share can only be identified the next day, i.e. once the net asset value has been calculated. Stock exchange execution will allow individual funds units to be priced and monetized immediately. Accordingly, customers trading investment funds on exchange and pooling them within Clearstream can use their funds units as collateral to efficiently secure financial transactions involving counterparty risk.
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Source: Clearstream:
Commerzbank unveils debt for equity swap
January 13, 2011--Commerzbank has taken long-awaited action to shore up its capital base, buying back some of its debt and issuing €626m ($835m) of shares.
The measure is short of the substantial capital increase that Commerzbank is still expected to carry out to repay more than €18bn of government aid, which the bank needed two years ago to carry it through its takeover of German rival Dresdner Bank at the height of the financial turmoil.
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Source: FT.com
Spain passes critical debt test
January 13, 2011--Spain passed a major test on Thursday in its first bond auction of 2011, bolstering its case that it has no need for an emergency bailout that would rock the entire eurozone.
Spain sold its maximum target of 3.0 billion euros ($3.9 billion) in five-year bonds with demand oustripping supply by two-to-one.
The Treasury had to fork out an average interest rate of 4.542 percent to lure investors, a competitive rate when compared to the previous day's market close of 4.767 percent.
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Source: EUbusiness
Enhancing safety of European financial markets: common rules for Central Securities Depositories (CSDs) and securities settlement
January 13, 2011--As part of its work in creating a more transparent and stable financial system, the European Commission Services have today launched a consultation on Central Securities Depositories (CSDs) and on the harmonisation of certain aspects of securities settlement in the European Union. The purpose of this consultation is to gather input from all stakeholders in order to inform the legislative proposals due in June 2011. The deadline for replies is 1 March 2011.
CSDs are systemically important infrastructures in modern securities markets. They perform crucial services that allow at a minimum the registration, safekeeping, settlement of securities in exchange for cash and efficient processing of securities transactions in financial markets. While securities markets traditionally relied on the physical exchange of paper, CSDs now assume a critical role to guarantee a safe and efficient transfer of securities that exist to a large extent only in book entry form. In many ways, they are a central point of reference for an entire market. Given the systemic importance of CSDs, there is a strong need for an appropriate regulatory framework for CSDs.
The initiative is an important part of the Commission's agenda to enhance the safety and soundness of the financial system. Together with the proposal for a Regulation on "OTC derivatives, central counterparties and trade repositories" (EMIR) adopted by the European Commission on 15th September 2010 and the Markets in Financial Instruments Directive (MiFID, currently under review), it will form a framework in which systemically important securities infrastructures (trading venues, central counterparties, trade repositories and central securities depositories) are subject to common rules on a European level.
This need for an appropriate regulatory framework for CSDs is agreed internationally. In its meeting of 20 October 2010, the Financial Stability Board re-iterated the call for updated standards for more robust core market infrastructures and asked for the revision and enhancement of existing standards for financial market infrastructures. Recommendations have been adopted by Central Banks and Securities Regulators both at global1 and at European2 level. While these rules are important, they remain of a high-level and non binding nature.
Due to an increase in cross border investment over the last years, the European Commission considers that the time has come to install a common and binding regulatory framework for CSDs on a European level.
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Source: Europa
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