The Financial Regulation Forum

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European Finance Ministers Reach Compromise

With a $2 billion loss by JPMorgan Chase in London serving as a reminder that risky trading has not gone away, European Union finance ministers broke an impasse Tuesday and agreed on a plan to force banks to hold more capital as a buffer against the unexpected. The unanimous move came after a compromise that [...]

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Bernanke college lecture series

In March 2012, Chairman Ben S. Bernanke delivered a four-part lecture series about the Federal Reserve and the financial crisis that emerged in 2007. The series began with a lecture on the origins and missions of central banks, followed by a lecture that discussed the role and actions of the Federal Reserve in the period [...]

Accountability of the Bank of England

Response from the Court of the Bank of England to the recommendations made by the Treasury Committee and Joint Committee on the draft financial services bill on the accountability of the Bank of England. On 8 November 2011, the Treasury Select Committee of the House of Commons published a Report on the “Accountability of the [...]

E-learning interactive graphic: Basel III

International regulatory framework for banks (Basel III). What is Basel III? Around the world, central bankers, regulators and governments have responded to the financial crisis with new regulation and legislation. The cornerstone of this global initiative to contain risk is Basel III – sweeping new regulatory standards for banks on capital adequacy and liquidity. Basel [...]

Snippets

• 15 May. Trading desks face tighter regulations. The size and scale of the surprise $2bn loss at JPMorgan Chase last week is likely to accelerate plans by global regulators to force banks to improve their trading risk models – a move that could sharply push up costs and capital requirements for large banks worldwide. While initial reactions to the JPMorgan loss last week focused on how it could reshape the US debate over implementing the “Volcker rule” ban on proprietary trading, the misstep by one of the world’s largest banks could have far broader consequences. (more...) #
• 15 May. At JPMorgan, the Ghost of Dinner Parties Past. What goes around comes around. Sometimes it happens sooner than you’d think. That round wheel turned on JPMorgan Chase last week, which disclosed that it had suffered a $2 billion trading loss in credit derivatives. That such a hit had befallen the mightiest of banks was perhaps more stunning than the size of the loss. So where does the karma come in? The loss, and the embarrassment it held for Jamie Dimon , the bank’s imperious chief executive, came just one month after a private dinner party in Dallas at which he assailed two respected public figures who have pushed for policies that would make banks like JPMorgan smaller and less risky. (more...) #
• 10 May. Economists split on Bank of England's QE decision. Pressure for more quantitative easing has intensified amid the recent deepening of the eurozone crisis. Bank of England policymakers are set to reveal whether they plan to prop up the UK economy with more emergency support. Members of the bank's monetary policy committee (MPC) will announce on Wednesday whether they plan to increase their quantitative easing (QE) stock from £325bn - after injecting £50bn in February. Economists said the decision of the nine-member committee was a close call and that more QE by August looked inevitable if they did not vote in favour this month. Interest rates will be kept at a record low of 0.5%. (more...) #
• 08 May. Reforming International Financial Safety Nets. At the Asian Development Bank 45th Annual Meeting, Manila, Philippines. Opening Remarks by Naoyuki Shinohara, IMF Deputy Managing Director,May, 2012. Good afternoon. I am very pleased that we have come together today for the second in the series of annual seminars organized jointly by the Asian Development Bank and the International Monetary Fund. This year, we are also fortunate to be partnering with the Bangko Sentral ng Philipinas—the Central Bank of the Philippines. Today’s topic—Reforming International Financial Safety Nets—may seem obscure to some of you. But I assure you it is highly relevant for all of us. As we heard during the ADB meetings these past few days, positive economic news continues to come out from Asia and emerging markets in other parts of the world. Indeed, at our own Spring Meetings two weeks ago in Washington, many of the IMF’s 188 member countries confirmed that growth prospects appear considerably brighter than they did only a few months back. (more...) #
• 04 May. IMF Launches Institute for Capacity Development. The International Monetary Fund launched the Institute for Capacity Development today to spearhead its enhanced strategy for capacity-building services for its member countries. These capacity-development efforts are aimed at helping member countries develop their skills base and build more robust economic and financial institutions. The Institute, a new department incorporating the former IMF Institute and Office of Technical Assistance Management, will enable stronger synergies and better coordination between IMF technical assistance, training, and other elements of capacity development, to better adapt to member countries’ priorities and needs, and facilitate fund raising. (more...) #
• 02 May. The Financial Stability Board enhances its process for ongoing monitoring of compensation practices. The 2011 FSB peer review on compensation indicated that good progress has been made in implementing the FSB Principles and Standards on Sound Compensation Practices (“Principles and Standards”), but that more work is necessary to overcome constraints to full implementation by individual national authorities and to address concerns by firms of an uneven playing field. Following the completion of the peer review, the Financial Stability Board (FSB) was tasked by the G20 to undertake ongoing monitoring and public reporting on further progress in compensation practices. (more...) #
• 28 Apr. Outlay of $14 Trillion Hasn't Solved Problem of Debt. The amount of money thrown at rescuing the world economy since the beginning of the current crisis is truly staggering — probably more than $14 trillion — and the financial spigots are still open. Over the weekend, industrialized and emerging countries pledged an additional $430 billion to bolster the International Monetary Fund’s reserves for loans, doubling the size of the organization’s war chest in the event of a worsening European debt crisis to almost $1 trillion. Three weeks earlier, E.U. leaders had set aside $1 trillion for a European bailout fund seeking to prevent the euro zone’s sovereign debt problems from spreading. (more...) #
• 18 Apr. IMF: Full World Economic Outlook (WEO). Growth Resuming, Dangers Remain. The April 2012 edition of the World Economic Outlook assesses the prospects for the global economy, which has gradually strengthened after a major setback during 2011. The threat of a sharp global slowdown eased with improved activity in the United States and better policies in the euro area. Weak recovery will likely resume in the major advanced economies, and activity will remain relatively solid in most emerging and developing economies. However, recent improvements are very fragile. Policymakers must calibrate policies to support growth in the near term and must implement fundamental changes to achieve healthy growth in the medium term. (more...) #
• 17 Apr. Bank bonus clampdown threatened by European Commission. Europe's Internal Markets Commissioner, Michel , has said that "tougher action" is needed to curb bank bonuses. He said that he was "seriously worried" by the proportion of pay awarded as bonuses in some countries, and said it encouraged excessive risk-taking. It follows a report from the European Banking Authority that said existing bonus rules were not being implemented consistently by different EU countries. Mr Barnier said parts of the report made for "startling reading". (more...) #
• 17 Apr. IMF Global Financial Stability Report: A Report by the Monetary and Capital Markets Department on Market Developments and Issues. Last Updated Wednesday April 11 2012. Global Financial Stability Report. The Quest for Lasting Stability April 2012 Chapter 3 of the April 2012 Global Financial Stability Report probes the implications of recent reforms in the financial system for market perception of safe assets. Chapter 4 investigates the growing public and private costs of increased longevity risk from aging populations. (more...) #
• 16 Apr. Muslims on Wall Street, Bridging Two Traditions. Naiel Iqbal’s co-workers couldn’t figure him out. He’d just started at a Midtown Manhattan hedge fund — the kind of elite enclave where overachievers in button-downs go to make a few hundred grand before heading off to Harvard Business School. But Mr. Iqbal, 27, a graduate of the Wharton School, wasn’t acting like a typical finance guy. He didn’t introduce himself around the office. Nor did he grab lunch with the other traders. In fact, he didn’t eat at all. Or drink. Not coffee, not soda, not even a sip of water from a Nalgene bottle on his desk. All day, he just sat there, staring into his Bloomberg terminal. Was he sick? Nervous? A modern Bartleby? (more...) #
• 14 Apr. IMF Managing Director Christine Lagarde: Global Risks Remain, More Work Needed. Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), today said that despite recent improvements in the global economic outlook, more work is required to support the still fragile recovery. “We have seen some improvement in the economic climate. But let me also underline this point: the risks remain high; the situation fragile.” She called on policymakers to take this “opportunity to push on and take the further actions that are certainly needed to keep the crisis at bay and finally put it behind us.” (more...) #
• 14 Apr. Supervisory policies and bank deleveraging: a European perspective. Speech by Andrea Enria, Chairperson of the European Banking Authority at the 21st Annual Hyman P. Minsky Conference on the State of the U.S. and World Economies, Debt, Deficits and Financial Instability. Ladies and gentlemen, This evening I would like to share with you some thoughts on the future landscape of the banking sector and discuss how policy makers could accompany the process of de-risking that banks are undertaking. I will present my assessment of what is currently happening in the EU banking sector and what we expect may happen over the next years. In particular, I will try to address three questions. (more...) #
• 11 Apr. Bernanke Warns Of Risks In Money-Market Funds. More regulatory action may be needed to safeguard the money-market mutual-fund industry, Federal Reserve Chairman Ben Bernanke said in remarks prepared for a speech on Monday night, putting his weight behind other officials who want to toughen oversight of the $2.7 trillion industry. In an address largely focused on scrutinizing murky corners of the financial system, the shadow banking system, Bernanke emphasized the need to establish regulations that protect the system as a whole from the risks that threatened it during the financial crisis. (more...) #
• 11 Apr. The The Islamic Financial Services Board (IFSB) Council Adopts Two New Guiding Principles for the Islamic Financial Services Industry. Manama/Kuala Lumpur, 29 March 2012 - The Council of the Islamic Financial Services Board (IFSB) has resolved to approve the adoption of two new Guiding Principles in its 20th Meeting in Manama, Bahrain today. The two documents are: IFSB-12: Guiding Principles on Liquidity Risk Management for Institutions offering Islamic Financial Services (excluding Islamic Insurance (Takāful) Institutions and Islamic Collective Investment Schemes) IFSB-13: Guiding Principles on Stress Testing for Institutions offering Islamic Financial Services (excluding Islamic Insurance (Takāful) Institutions and Islamic Collective Investment Schemes) (more...) #