Weil’s David Elphinstone has written an interesting article exploring a resolution passed last month by the European Parliament adopting, with amendments, the European Commission’s proposal for a regulation relating to short selling and certain aspects of credit default swaps.
International Financial Regulation
The Financial Stability Board (FSB) has identified the institutions that it will designate as Globally Systemically Important Financial Institutions (G-SIFIs). The announcement was made today around the G-20’s Cannes Summit. In a related communication, the FSB stated: [click to continue…]
Alert: International Financial Regulation
Early this morning, the UK’s Independent Commission on Banking (“ICB”), chaired by Sir John Vickers, issued its final report on the reform of British banking. The ICB largely reiterated the measures first outlined in its interim report in April and summarized in a previous Alert. Whilst banks may not be initially rushing to relocate overseas, there is no doubt implementation of the ICB’s conclusions will be expensive (estimated at around £6 billion annually). The ICB believes that incremental benefits will exceed costs by “a very large margin,” a view perhaps not widely held as London’s FTSE 100 reportedly fell by over 2.3% in early trading following the report’s release, with bank shares the biggest fallers. The ICB’s challenge was twofold. As well as creating a more stable and competitive basis for UK banking, it was also tasked with ensuring an “effective and efficient” banking service to safeguard retail deposits. The report notes the global events and goals to which the UK is subject and recognizes that part of the challenge is reconciling the UK’s position as an international financial centre with stable banking in the UK. It remains to be seen whether the report will lead to enhancement or divestment of the UK’s reputation as a pre-eminent financial centre.
Financial Stability
The report proposes a combination of measures requiring structural reform and greater capital/other loss-absorbing capacity. The ICB intends risks associated with banking should not …
by Peter King
As regulators seek to avoid a repeat of the 2008 financial crisis, attention is focused on a small group of financial institutions whose operations are so international and so significant that their collapse could adversely affect all financial markets. The Basel Committee on Banking Supervision has been at the forefront of attempts to agree global standards in this area. Following on from its papers on the so-called Basel III framework, it has now published a paper on how regulators should determine what are global systemically important banks or G-SIBs.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank or the Act) was enacted one year ago. At that time, it was heralded as perhaps the most dramatic set of regulatory reforms since the 1930s. The Act was expected to have significant effects in both the short and long term. Dodd-Frank’s provisions, however, are not confined to the US market. The Act is intended to have significant implications for non-US companies doing business in the United States or whose securities are listed on a US stock exchange. What is more, the Act purports to regulate certain transactions and entities with little direct connection to the United States.
