| News on the global financial markets |  |
| Morning Bell |  |  |
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- Major banks push Euribor and Libor alternative with ECB
A delegation of leading global banks has proposed to the European Central Bank an alternative to the Euro Interbank Offered Rate and the London Interbank Offered Rate, amid a threat of regulation and low interbank lending. The group supports a benchmark that would be based on "secured market" trades. "The unsecured [interbank] market is ... disappearing, so we need an alternative. A secured index makes a lot of sense," said one person involved in the discussions. Reuters
(07 Nov.)      
- Investors expect Obama win to boost global stocks and bonds
One outcome of the re-election of US President Barack Obama, at least for investors, is relief that there won't be upheaval at the Federal Reserve. Investors say they expect global stocks and bonds to fare well as a result. The Fed is expected to continue its weak-dollar stance, which has led to escalating prices for global equities and precious metals, as well as emerging-market and high-yield bonds. Reuters
(07 Nov.)
- Another roadblock emerges in clearing
EU buy-side firms plan to meet central-clearing rules by using indirect clearing. However, the US Commodity Futures Trading Commission allows only one kind of collateral protection, and it is not one of two allowed in Europe for indirect clearing. Lawyers say the matter can be resolved if European Securities and Markets Authority rules are interpreted a certain way, but it is unclear whether ESMA will allow that. Risk.net (subscription required)
(07 Nov.)
- Move to OTFs raises concerns
A lack of resources and dealer involvement might inhibit trading of some European derivatives on organised trading facilities, which will eventually be required, said panellists at the OTC Derivatives Clearing Summit Europe. Of particular concern is the prospect that banks will not have a part in developing infrastructure. Risk.net (subscription required)
(07 Nov.)
- Earnings double at BNP Paribas
BNP Paribas' profit more than doubled in the third quarter compared with Q3 of 2011. The result, attributed to a decline in euro-zone losses and strong capital-markets trading, helped the bank hit balance-sheet goals ahead of schedule. Earnings reached €1.32 billion, compared with €541 million in Q3 of 2011. Reuters
(07 Nov.)
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| Regulatory Roundup | | |
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- BoE official warns CCPs against risk and margin secrecy
Central counterparties' refusal to detail risk and margin models on the grounds of proprietary information cannot be justified, Edwin Schooling Latter, head of payments and infrastructure at the Bank of England, said at the OTC Derivatives Clearing Summit Europe. Citing the entry of small derivatives users, Schooling Latter said, "Not every client can be on the risk committee. Not every client can attend board discussions on segregation. So it is very important those that can't are able to benefit from full and appropriate disclosure by the CCP on how it is managing its risks." Risk.net (subscription required)
(07 Nov.)
- BoE's Haldane threatens bank breakups to enforce ring fencing
The possibility of breaking up the UK's biggest banks should be considered a means of encouraging them to properly implement ring fencing, said Andy Haldane, executive director of financial stability at the Bank of England. Haldane called on Parliament to put such a provision into law to reinforce the threat. The Telegraph (London) (tiered subscription model)
(07 Nov.), Reuters
(07 Nov.)
- ECB's bond-buying pledge has no limit, Draghi says
Unlimited buying is an option under the European Central Bank's bond-purchase programme, President Mario Draghi said. He noted the pledge's success, citing money inflow into the euro zone, including debt-strapped members. Draghi expects inflation of less than 2% next year. Reuters
(07 Nov.)
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