Latest articles from Simon Turmaine

Newsletter February 2011: US regulatory round-up

Some of the recent developments generated by the crisis and the American regulatory reform agenda

Newsletter February 2011: EU rules proposed on banks’ swap clearer exposures

BRUSSELS – The European Commission is putting in place another piece of the jigsaw of its regulatory framework for derivatives with a consultation on counterparty risk proposals. During the financial crisis banks greatly under-estimated the level of counterparty credit risk stemming from their privately-negotiated over-the-counter (OTC) derivative deals.

Newsletter February 2011: Canadian banks on target for Basel III deadline

OTTAWA – Although Canada’s banks and deposit-taking trust companies are on target to meet the Basel III capital requirements comfortably ahead of the 2019 transition deadline, a top regulator has urged them to maintain prudent earnings retention policies and avoid actions that weaken their capital position.

Newsletter February 2011: Chiefs appointed to EU watchdogs after further row

BRUSSELS – The European Parliament finally endorsed, in early February, the heads of the three new EU financial watchdogs after withholding approval for two days, demanding reassurances over selection procedures, the calibre of candidates and the independence and budgetary resources of the fledgling agencies they are being chosen to chair.

Newsletter February 2011: Academics urge higher bank capital and more CoCos

LONDON – A dozen European academics involved in financial regulatory issues are urging the Basel Committee to raise bank minimum capital levels by more than currently proposed, but allow a higher proportion to be in the form of contingent capital. In a statement issued in London in late January, the European Shadow Financial Regulatory Committee (ESFRC) calls on the Basel Committee to “acknowledge the important and attractive characteristics of contingent capital instruments and to allow these instruments to be a more substantial part of banks’ Tier 1 capital.” Not only would such instruments make it less costly for banks to increase their capital ratios, the academics say, “but they would have significant effects on market discipline as well.”

Newsletter February 2011: Governance challenges faced by central banks

MADRID – Central banks face a challenge in developing the governance rules that will ensure they retain the independence they need to conduct both monetary policy and financial stability policy in the wake of the global financial crisis, according to a top international banking supervisor.

Newsletter February 2011: Basel III for all banks everywhere

CAPE TOWN – The world’s top banking regulator sought in January to quell the “common misconception” that the tough new Basel III banking rules are intended only for industrialised economies with large complex banks.

Newsletter February 2011: EU closes in on auditors; UK proposes code

BRUSSELS/LONDON – As European Union regulators promised legislative proposals on the auditing profession later this year, the UK consulted on a draft code of practice designed to improve the dialogue between auditors and supervisors.

Newsletter February 2011: Procyclical dangers in VaR-based bank capital

BASEL – The procyclical nature of bank capital requirements based on Value at Risk (VaR), the risk metric that’s become standard in the financial world, may induce cyclical lending by banks, according to a survey of the literature on the topic by global banking regulators.

Newsletter February 2011: Accounting trustees becoming irrelevant

LONDON – The IFRS Foundation trustees, the 22 distinguished individuals charged with ensuring the integrity of the international accounting rule-making process, are being pushed into irrelevance, according to a leading researcher.