| News on the global financial markets |  |
| Morning Bell |  |  |
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- EU proposals could increase banks' funding costs, AFME says
AFME warned that EU proposals to force banks to set up legally separate trading entities likely would drive up lenders' funding costs and prompt them to rein in lending. The proposals were made by an advisory group led by European Central Bank Governing Council member Erkki Liikanen. "If the Liikanen proposals are implemented as they stand, there is a serious risk that the capital markets will be unable to meet Europe's financing needs at this time of very subdued bank lending," according to AFME. Bloomberg
(14 Nov.), The Wall Street Journal/Dow Jones Newswires
(14 Nov.)      
| Industry News | | |
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- European group outlines best practices for CMBS
The Commercial Real Estate Financial Council Europe finalised general standards for best practices in commercial mortgage-backed securities, dubbed CMBS 2.0. The council intends for CMBS 2.0 to be adopted industrywide. "It will ultimately be a matter for market participants to decide whether or not to endorse them by applying them to transactions," according to the guidelines' preamble. Reuters
(14 Nov.)
- CLOs carry inherent danger again
Collateralised loan obligations have bounced back, but market participants say CLOs might be getting more dangerous as managers invest in riskier assets to extend the life of funds. Financial Times (tiered subscription model)
(14 Nov.)
| Regulatory Roundup | | |
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- OTF disagreement emerges in MiFID II debate
The breadth and functionality of organised trading facilities likely will be main points of difference as the European Council and the European Parliament debate a revised Markets in Financial Instruments Directive, Parliament member Kay Swinburne said. The exclusion of equities from OTFs in Parliament's MiFID II document is a likely point of contention. The Trade News (U.K.)
(14 Nov.)
- Bundesbank challenges ECB's role in banking union
In June, European leaders decided to give the European Central Bank authority to establish a banking union and therefore supervise all 6,000 euro-zone banks. Germany's Bundesbank is questioning whether the ECB can legally have that role. The banking union is scheduled to launch on 1 January, but the ECB is seeking more time, saying it might need until 2014 to be operationally ready. Bloomberg
(14 Nov.)
- ECB demands revamp of system for setting Euribor
In the wake of issues concerning the London Interbank Offered Rate, the European Central Bank and national central banks in the euro zone called for an overhaul of the system that determines the Euro Interbank Offered Rate. "In the short term, the focus should be on improving the governance process, as well as on providing a clear road map for both the regulation and supervision of Euribor," according to an ECB paper. Reuters
(14 Nov.)
- Firms criticise Europe's short-selling rules
Europe's restrictions on short selling have caused frustration among buy-side firms, some to the point that they've stopped trading credit default swaps and certain equities. Market participants said at an industry conference that some instruments have become untradeable because regulators have changed their minds capriciously. Risk.net (subscription required)
(14 Nov.)
| Spotlight on China | | |
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- China's QFII quota reaches a record $2.75B
A record $2.75 billion quota was granted last month for China's Qualified Foreign Institutional Investor programme, topping the previous high of $2.1 billion in March. The big opening by the State Administration of Foreign Exchange indicates that China is accelerating plans to pull more foreign money into capital markets. AsianInvestor.net
(14 Nov.)
| AFME News | | |
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- José Manuel Campa, former Spanish secretary of state for the economy, will present the keynote address at the AFME 4th Annual Spanish Funding Conference -- 27 November in Madrid
In 2009 and 2011, José Manuel Campa was the secretary of state for the economy in the Spanish Ministry of Economy and Finance. Campa has been a consultant in several global organisations, including the International Monetary Fund, the Inter-American Development Bank, the Bank for International Settlements and the European Commission. Campa is a professor of financial management and international economics at the University of Navarra's IESE Business School and is a member of the Liikanen group, which is evaluating structural reforms for Europe's banking policy. Delegates will hear his thoughts on the situation and plans for preparing for 2013 and beyond. In addition, key industry figures will debate the economic situation and the future for Spanish and European markets, including the role of securitisation and covered bonds in recovery of the European economy. A networking reception will follow the conference, providing excellent networking opportunities and giving attendees a chance to discuss key topics of the day with peers. See further programme information and register.
| ASIFMA News | | |
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Event announcement: Members-only teleconference: Joint ASIFMA, CMTC and ISDA briefing on FATCA -- 9pm HKT on Tuesday
To register for the briefing on the US Foreign Account Tax Compliance Act, contact Denise Chan at dchan@asifma.org.
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