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The Volcker strip – making banking less regulated again

US regulators have disclosed the much awaited revision of the Volcker Rule that had been taken on by the Trump administration. Wall Street has undoubtedly received a huge win, but who is likely to bear the losses? The Volcker Rule was implemented after the financial crash to stop banks from engaging in proprietary trading (buying […]

All change for EU investment firm supervision

The European Commission has published a proposal for significant changes to the Prudential Regime for EU investment firms, amending the framework set out in the capital requirements directive and regulation (CRD IV/CRR) and in MiFID2/MiFIR. The proposal will impact the Prudential Requirements on individual firms and the categories to which they belong. A full review […]

Another day- another change to the CSA

In yet another development driven by the remorseless exigencies of Regulatory Capital requirements, banks are looking to move currently clearing-exempted clients to cash-only CSAs. In order to bridge the pricing-gap between cash and non-cash collateralised swaps, banks are offering insurers and pension funds the option to post securities with an automatic switch to cash at […]

Clearing members’ exposure to clients: EBA says “Keep it simple”

On 4 July 2014, EBA published the final draft RTS on the clearing members’ exposure to clients. The RTS addresses the minimum margin periods of risk (MPOR) that financial institutions acting as clearing members may use as input for the calculation of their capital requirements for exposure to clients. MPOR reflects the time period from […]

Basel III Stress-Testing: One Model to Rule Them All…

Reports suggest that cracks may be beginning to appear over Basel III.  Less than three months after approving the use of internal risk models for the 8 largest banks in the US, concerned that firms will “monkey with their risk models to boost profit”, the Fed is allegedly looking set to perform a volte face […]

Basel Committee to brighten banks’ New Year

The Basel Committee on Banking Supervision will meet this Sunday, the 12th January.  They are close to a final decision on their June 2013 draft proposals to exclude all collateral from leverage ratio calculations and ban netting for repo agreements, irrespective of national rules. The decision is material- according to its 2012 Annual Report, JP […]

Bank of England leaps on Leverage Controls

George Osborne has surprised markets with his second U-turn in as many days. In a published exchange of letters with the Governor of the Bank of England, the Chancellor asked the Bank to begin an immediate review as to “whether and when” it required formal powers to mandate leverage ratios for banks. Mr Osborne had […]

Not toxic, just “lazy”

A short article in Risk magazine details a new practice amongst some of the larger swap dealers, of posting so-illiquid-as-to-be-solid assets as initial margin; Risk quotes the banks involved as putting “lazy” assets to work. Banks sign bilateral agreements with each other, arranging to post a static portfolio of assets to a third-party account. The […]

E-Day has dawned

15 September 2013. The deadline for compliance EMIR portfolio reconciliation and CCP registration is here. Portfolio Reconciliation: The deadline falls six months after ESMA’s technical standards were published, requiring counterparties to “”agree in writing or other equivalent electronic means with each of their counterparties on the arrangements under which portfolios shall be reconciled. Such agreement […]

India comes in from the cold

A scant six days before the submission window closes, the Reserve Bank of India has confirmed that it will allow its country’s CCP’s to apply for ESMA approval. Once the initial application is made, the CCP’s are then granted up to 30 business days to finalise their application; ESMA then has 180 working days to […]

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