Regulators wilted on Big Bang derivatives enforcement
Regulators in the US and Europe announced they would only look to see efforts being made to comply – rather than actual compliance – when it comes to the new “Big Bang” rules covering bespoke over-the-counter swaps used to hedge risk in derivatives portfolios that are set to take effect March 1. While agreeing to ease their approach, European regulators made it clear they were none too happy with the effort industry participants have made thus far:
“The timeline for implementation has been known in EU since 2015, and it is unfortunate that the financial industry has not managed to prepare for the implementation. Furthermore, a delay of 9 months was already granted by BSBC-IOSCO in 2015 on the basis of similar arguments from the industry.
That delay was agreed with the clear expectation that the financial industry would be ready to prepare the implementation within two years.”
The Financial Times reports that according to ISDA, despite the lead time outlined by the European regulators, just 15% of the 159,000 affected contracts have thus far been updated in preparation for the new rules. I guess the Big Bang remains just a theory at this point.
That’s one way to “retire”
Bloomberg is reporting that the Trump administration is considering tapping US Bancorp CEO Richard Davis to fill one of the three open seats on the Federal Reserve Board. Davis, who had already announced plans to retire later this year, steered US Bancorp through the financial crisis and has long played an active role in Beltway policy discussions.
Is FinTech coming or going?
PwC released the results of its Annual Corporate Directors Survey. There is loads of good intel in the report, but one thing in particular caught my eye. The survey found that 95% of banks think part of their business is at risk of being lost to standalone FinTech companies. That data point begs two questions:
- How does that 95% data point jibe with what this New York Times piece that popped yesterday? The Times reveals how FinTech firms are actually struggling to truly displace banks. In fact, many FinTech firms in the US are finding they have to collaborate with – or be acquired by – the big banks to grow.
- Do banks really mind if some of their business is taken by FinTech firms? For example, are banks really all that bummed that the likes of SoFi and Quicken Loans are taking on the loan origination piece of the securitization process? Given all the fines and bad PR that followed the housing meltdown, I suspect some banks aren’t crying to see FinTech firms “disrupting” that segment of business.
When a $2 trillion company is really only a $400 billion company
When Saudi Aramco offers 5% of its business to investors in an IPO planned for 2018, the stake is expected to fetch as much as $100 billion. Bloomberg New Energy Finance looks at how those nose-bleed numbers have some experts taking a hard look at how factros like long-term demand for oil and geopolitical uncertainty could weigh on the company’s overall valuation.
Anonymity in the workplace … its a thing!
Imagine if you could disguise your voice while participating in all your work conference calls? What if no one knew it was you when you posted all your brilliant/stupid/wild/mundane work ideas on platforms like Slack? Well, some companies are making all that happen. And it seems the freedom that comes with employee anonymity might even be good for overall corporate productivity. I reckon there are some former LIBOR traders and “Burn baby burn” energy traders who wish such technology had come along years ago. (Hat tip to James daSilva)
When Brexit news isn’t “fake news” but it’s not really “news” either
We have all seen story after story about financial services firms preparing to move personnel out of the UK in the aftermath of the Brexit vote. It seems like these stories make headlines nearly every day. But can we please establish some kind of threshold to gauge whether such a move is actual news – or just banks making noise via complicit journalists. For example, this Bloomberg story details how Morgan Stanley is considering moving 300 employees from the UK to Frankfurt or Dublin. However, 300 employees represents just one half of one percent of Morgan Stanley’s global workforce (we aren’t even talking about ALL the 1 percenters!). Now I know what really matters is who those 300 people are and what kind of tax revenue they will take with them, but c’mon. Is news that a company – any company – is thinking about moving one half of one percent of its workforce really “news?” Can we maybe raise the threshold to a whopping 1% – or maybe even 5% (gasp!) – before we take to writing breathless headlines?
Soccer coaches and job security
For those who follow soccer and have ever wondered if a manager in the English Premier League should prioritize European competitions over performance in the EPL, I give you the following data points:
- Claudio Ranieri, who guided Leicster City on their 5,000-1, fairy tale EPL title-winning season last year and whose team is still alive in this year’s prestigious Champions League, was fired today. His team is currently 17th in the EPL standings.
- Mauricio Pochettino, who has never won the Preimeir League and tonight saw his team crash out of the lower-profile Europa League, is not nervous about his job security. His team is currently 3rd in the EPL standings.