A collection of stories from SmartBrief publications and around the web…
JPMorgan software identifies potentially rogue workers: Bloomberg reports on a Reagan-esque initiative at JPMorgan to “trust, but verify” the actions of its employees. Sally Dewar, JPMorgan Chase’s head of regulatory affairs for Europe, is overseeing an algorithmic program that identifies employees who might go rogue. The software considers dozens of factors, including whether an employee violates trading rules or fails to attend compliance classes. “It’s very difficult for a business head to take what could be hundreds of data points and start to draw any themes about a particular desk or trader,” Dewar said. “The idea is to refine those data points to help predict patterns of behavior.”
Treasury Market Practices Group says HFT might be no bueno for Treasurys: High-frequency and other types of automated trading have increased risk to trading Treasurys, according to the Treasury Market Practices Group, which is sponsored by the Federal Reserve Bank of New York. “The increased adoption of automated trading has also led market participants and regulators to articulate concerns about the potential for greater operational risk, disruptive market practices and trading strategies, and the risk of sharp, short-term disruptions to the Treasury securities market,” according to a TMPG white paper.
BIS says domestic policies could make financial instability permanent: Domestic policies are unable to head off significant imbalances that end in financial crises, creating great vulnerability for the international financial and monetary system, says Claudio Borio, head of the Bank for International Settlements Monetary and Economic Department. This threatens to make instability a permanent feature of the system, according to Borio.
Revolving door helps Wall Street beats back Dodd-Frank reform: Reuters reports on the shocking news that Wall Street has infiltrated regulatory agencies to help delay and defeat Dodd-Frank reforms. This piece focuses heavily on the efforts at accounting reform, but the playbook is the same as other sectors within finance.
Merrill Lynch’s Thiel weighs in — quite bravely — on fiduciary duty: John Thiel, head of Merrill Lynch Wealth Management, sure has courage. Speaking at a SIFMA conference earlier this week, Thiel said financial firms should take a collaborative approach to a proposed fiduciary standard for brokers. Saying what he said where he said it is particularly brave considering industry groups like SIFMA have opposed the Department of Labor’s effort to impose a fiduciary duty on financial professionals who give retirement advice.