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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 […]

BRRD 2 “improvements”

Risk magazine reports that the Bulgarian Presidency of the Council of the EU[1] has suggested a reduction in the proposed “BRRD 2” pre-resolution stay period to two days, along with a recommendation that derivatives be included within the power’s scope. The Commission’s November 2017 proposal called for a pre-resolution power of moratorium, enabling national authorities to […]

Multi-tool for bail-in amendments now available

On 1 August 2016, the Association for Financial Markets in Europe (AFME) published a full set of model clauses for the contractual recognition of bail-in under article 55 BRRD. The 55-page package follows the September 2015 release, which was then limited to one jurisdiction. The expanded package now includes: Generic version of model clauses for […]

BRRD Level II OJ’d

The Delegated Regulation (DR) supplementing the BRRD was published in the OJ on the 8 July 2016, having passed consideration by the Council and the Parliament, triggering its entry into force on 28 July 2016. The draft RTS was submitted to the EC by the EBA in December 2015, then adopted by the Commission under its […]

German JMP joins the party

ISDA has today published the German Jurisdictional Module to the ISDA Resolution Stay Jurisdictional Modular Protocol (the ISDA JMP). The ISDA JMP provides a framework to facilitate jurisdiction-specific compliance with contractual stay regulations for contracts governed by third-country laws; its structure and mechanism is reviewed in detail in this blog post. The German Jurisdictional Module […]

Approaching Terminal Complexity? ISDA Publishes JMP

Introduction On 3 May 2016 The International Swaps and Derivatives Association (ISDA) launched the “ISDA Resolution Stay Jurisdictional Modular Protocol” (the “JMP”).  The JMP is designed to enable market participants to comply with regulations in a number of jurisdictions which, broadly, require banks to obtain consent from their counterparties for the inclusion of statutory stays […]

TBTF alive and well in the US

The Federal Reserve and the FDIC announced today that the living wills of five large American banks are determined as “non-credible”. Citigroup’s was the sole systemically-important bank whose submission passed the scrutiny of both Regulators. Bank of America, Bank of New York Mellon, JPMorgan, State Street and Wells Fargo each have until 1 October 2016 […]

Art 55 BRRD- PRA no action permanent

The PRA yesterday issued a consultation paper (CP)proposing to make permanent its time-limited 25 November 2015 waiver of Article 55 BRRD compliance, in respect of phase 2 liabilities. The waiver took effect via modification by consent, the consent being that of the PRA. If granted, the modification is valid until the earlier of 30 June 2016, […]

BoE announces SRB detail

On 29 January, the BoE announced a public consultation defining new capital requirements for all ringfenced retail lenders. The consultation proposes the imposition of a “systemic risk buffer” (SRB) on banks and building societies, ensuring that critical financial services are maintained even in highly-stressed periods. The buffer is scaled in according to total risk-weighted assets, […]

Art. 55 BRRD – No-Action Letter Brit-style

The PRA has today issued a short-term waiver in respect of phase 2 liabilities under its transposition of Article 55 BRRD. Its rules require firms to amend contracts with 3rd country counterparties, to include a term that subordinates liabilities to the Bank’s resolution authority, a contractual recognition of bail-in. The requirement was imposed via a […]

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