The U.S. Fed has set up a taskforce to look into how the industry can further automate the US$1.6 trillion triparty repo market as part of its overall push to bring down levels of systemic risk in the financial markets. Good thing then, that the Asset Managers Forum (AMF) and the International Securities Association for Institutional Trade Communication (ISITC US) have been working on updated guidelines for the market practices underlying the triparty repo market over the last couple of years.
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What have the legislators learned from the Durbin Amendment? By the looks of the new Prepaid Card Consumer Protection Act, not much. It is not easy to be a politician and have to balance serving the interest of the people and at the same time create positive conditions to allow businesses to create new jobs or at least maintain the ones they are providing today. These two factions, consumers and businesses, need to be balanced constantly by politicians, for both are important: It is the people that elect them while businesses increase prosperity through job creation, taxes, or other contributions to their communities, not to mention direct and indirect donations to the politicians’ campaigns.
Senator Robert Menendez is at it again. Just when we thought that banking regulation would go on hiatus for the holiday season, the senator has introduced The Prepaid Card Consumer Protection Act. The primary aspects of the bill center on consumer disclosure of all fees, and require Reg E compliance on lost or stolen cards. A core component of the legislation is the elimination of some fees and the imposition of limits on other fees.
Basel III bank-capital-adequacy proposals are leaving large banks feeling cold. For the 29 “systemically important” global banks, Basel (Switzerland) regulators are expected to tack on an additional 1% to 2.5% of capital cushion to the required 7% capital base (as a percentage of risk-weighted assets) required for all banks. As such, banks (assets of less than US$50 billion) not deemed “systemically important” must be champing at the bit.
In the spirit of forced global deleveraging (and then some -- regulators cannot be any clearer about their intentions), risk-taking is to be made more costly. Concurrently, though, sovereign policymakers want banks to open up their lending spigots; in other words, to hit the brakes while speeding up.
Via a recent Securities Technology Monitor article by Peter Chapman, "SEC Strengthens Market Structure Crimes Unit," we became aware that this is first time a large regulatory agency has recognized the need to employ former industry (non-lawyer) trading specialists as field investigators to sniff out potential trading abuses by various securities markets participants. The SEC ended up hiring five individuals for this Market Abuse Unit, out of a total of 55 staff members, within its Division of Enforcement, which employs between 1,300 and 1,400 people.