European Central Bank President Mario Draghi hinted that the ECB is getting closer to slowing, stopping or even scaling back its stimulus efforts. As Europe's economic prospects improve, the ECB will gain flexibility to adjust its interest-rate policies and bond-buying scheme, he said.
The diversification and resilience of the UK's financial system could be compromised if Britain's withdrawal from the EU results in a fragmentation of cross-border financial services, the Bank of England said in its Financial Stability Report. Governor Mark Carney said the central bank will oversee "contingency planning to mitigate risks to financial stability" as Brexit talks move forward.
German Chancellor Angela Merkel praised a proposal by US Commerce Secretary Wilbur Ross to restart negotiations on a free trade agreement between the US and the EU. Obstacles to US-EU trade "can only be dealt with in structured trade negotiations with each other", Merkel told an economic symposium in Berlin.
Securities and Exchange Commission Chairman Jay Clayton and Labor Secretary R. Alexander Acosta told lawmakers that they will cooperate on drafting a fiduciary rule for investment advice. Clayton said he wants to regulate investment advice in "a way that is coordinated so that our Main Street investors have access to investment advice and access to investment products."
Federal Reserve chief Janet Yellen told an audience in London that another financial crisis "in our lifetime" is unlikely and that banks are much stronger than before. Yellen also rejected calls to significantly ease financial regulations.
The capital markets subcommittee of the House Committee on Financial Services heard testimony Tuesday from market executives on the structure of equity markets. Charles Schwab Senior Vice President Jeff Brown noted a conflict of interest emerging from exchanges' dual role as market facilitators and data providers and called for a rethinking of the market's self-regulatory structure.
Transparency rules embodied in Europe's revised Markets in Financial Instruments Directive, which will require banks to clearly outline the costs and profit margins that are bundled in derivatives quotes, have met an apparently lukewarm response from buy-side firms. The rules are intended to encourage competition and curb overcharging, but some asset managers have dismissed the requirement as irrelevant, while others have argued that it could hamper their ability to achieve best execution.
Numerous analysts have offered dire predictions for London's status as a global financial hub as Brexit draws nearer, but former banker and market commentator Satyajit Das puts forward several reasons why its predominance is likely to be maintained.
The Bank for International Settlement's Committee on Payments and Market Infrastructures and the International Organisation of Securities Commissions are inviting market participants to comment on their proposals for reporting over-the-counter derivatives trades. The proposals are part of a long-term global effort to establish reporting and data-gathering standards that will enable regulators to monitor and control OTC derivatives activity.
The Bank of England announced plans to increase the countercyclical capital buffer for UK lenders to 1% in November, which will raise the capital requirement by £11.4 billion. The central bank is also set to issue consumer-lending guidelines to maintain control over a recent spike in consumer credit and prepare for contingencies that may arise due to Brexit.
- Page 1