The new year gives compliance professionals a fresh opportunity to make sure their firm is staying up to speed on recordkeeping and other supervision regulations, Marianna Shafir from Smarsh says. "If your firm is not collecting all the communications of your brokers (including text and IM), and if your firm does not have a [Written Supervisory Policy] that accurately and adequately supervises those communications, your firm is at risk for fines," she writes.
The six leading US banks all saw their shares rise after earnings reports released this week showed they achieved unprecedented combined profits in excess of $100 billion in 2018. Individually, JPMorgan Chase and Bank of America each reported record years, Goldman Sachs and Citigroup enjoyed their best profits since the financial crisis, and JPMorgan Chief Financial Officer Marianne Lake expressed confidence that the positive trend will continue, albeit at a marginally slower pace. Morgan Stanley, however, posted its earnings this morning, which fell short of analysts' expectations for profit and revenue.
A substantial number of large financial institutions in London anticipate moving at least a portion of business to the EU after Brexit, according to a survey by Practice Insight. The most popular choice for a European hub is Amsterdam, although Paris, Dublin and Frankfurt, Germany, also are popular.
Roberto Gualtieri, chairman of the European Parliament committee overseeing the European Central Bank, says the ECB should avoid pushing banks into "financial distress" with punitive capital requirements. The ECB's Single Supervisory Mechanism has given banks until roughly the middle of the next decade to increase equity coverage for nonperforming loans.
A no-confidence motion that could have removed Theresa May as Britain's prime minister has been narrowly rejected in a 325-306 vote. May has called for cross-party talks to search for a compromise on Brexit terms that could gain parliamentary approval.
A gain in sterling after parliamentary rejection of UK Prime Minister Theresa May's proposed Brexit deal indicates markets believe that there is less risk of a no-deal Brexit or that the process will be extended, Bank of England Governor Mark Carney says. The pound rose to the highest level against the euro in about two months Wednesday and gained almost a cent against the US dollar before ending the day flat.
Tabula, a specialist in European fixed-income assets, has introduced an exchange-traded fund that buys high-yield debt issued by European companies. The Tabula European iTraxx Crossover Credit UCITS ETF is linked to the European Crossover Credit Index.
UniCredit, the largest bank in Italy, says the European Central Bank's requirements for banks to set aside additional capital to cover nonperforming loans could hurt UniCredit's CET1 ratio for the next five years. The bank says that it has cut more than €36 billion in soured loans from its balance sheet since 2016 and that capital buffers remain adequate.
The European Parliament isn't waiting to see what the UK does about Brexit before overhauling supervision of foreign derivatives clearinghouses. Documents prepared for talks indicate Parliament and the Council of the EU mostly agree on how to oversee clearinghouses including LCH in the UK and CME Group and Intercontinental Exchange in the US.
The banking industry is mixed on whether the Basel Committee on Banking Supervision's reset of thresholds of two modelling tests for market-risk capital will improve the Fundamental Review of the Trading Book. The effect of changes to nonmodellable risk factors and the profit-and-loss attribution test "needs to be fully assessed, with a specific focus on areas where no changes have been made", says Panayiotis Dionysopoulos, head of capital at the International Swaps and Derivatives Association.
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