Financial Regulation Roundup: February 12, 2018

Rupert Eyles  Follow

Here are the top stories on the financial regulatory landscape in the U.S., EU and around the world over the past two weeks.

U.S. News:

  • Fed Economic Outlook: Federal Reserve Bank of New York President William Dudley said recent stock-market declines weren’t significant enough to change his outlook for the U.S. economy. While U.S. central bankers didn’t come out with a formal statement during the turmoil, St. Louis Fed President James Bullard played it down during a public event on Tuesday, calling the decline the “most predicted selloff of all time.” (Bloomberg: read more)
  • White House Briefed On Derivatives Rules: President Donald Trump met with the top U.S. derivatives regulator in the Oval Office on Wednesday, amid tensions between American and European policy makers on their efforts to coordinate on post crisis regulation. At issue in Wednesday’s briefing: a 2016 deal struck between regulators in Washington and Brussels in which European policy makers agreed to recognize certain U.S. rules as equivalent to those in Europe. U.S. officials now fear Brexit negotiations might essentially override that agreement, the person said, as European officials seek to maintain oversight of certain firms based in or operating out of London post-Brexit. (The Wall Street Journal: read more)
  • Lack of Bitcoin Oversight Putting Investors At Risk: U.S. regulators on Tuesday said Congress should consider expanding federal oversight of bitcoin and other cryptocurrency trading, as market cops amplify alarms about an asset class that is largely exempt from investor-protection laws. The chairmen of the Securities and Exchange Commission and the Commodity Futures Trading Commission told senators that cryptocurrency trading has outgrown the state-based regulation that covers many platforms. (The Wall Street Journal: read more)

EU News:

  • Instant break from key European Union regulations possible post Brexit: According to various sources, the British government are drawing up plans for an instant break from key European Union regulations after Brexit, with some financial services regulations expected be a priority. (Bloomberg: read more)
  • Lawmakers threaten FCA with powers to publish RBS report: The Treasury select committee has threatened to force the City regulator to publish a contentious report into alleged mistreatment of small businesses by the Royal Bank of Scotland unless the Financial Conduct Authority commits to a deadline. Nicky Morgan, the head of the select committee, told the FCA’s top brass on Wednesday that she would write over the next couple of days “with a clear request to publish, and a timescale”. It is the latest salvo from the committee to the regulator over the independent report, commissioned by the FCA four years ago into allegations that RBS mistreated small businesses it was meant to help in the wake of the financial crisis. (Financial Times: read more)
  • FCA to investigate third-pillar pension system:The UK regulator is to investigate the country’s third-pillar pension system amid fears that products are overly complex and consumers are not being protected. The Financial Conduct Authority recently published a discussion paper seeking feedback from the pensions industry and consumer groups about weaknesses and competitiveness among providers of individual pension products. It said it wanted to “better understand the market for non-workplace pensions: the providers and consumers, and the relationship between them, with a view to assessing the potential presence, nature and extent of harm”. (IPE: read more)

International:

  • S&P Seeking to Offer Services In China Bond Market: S&P Global Inc. plans to offer its ratings services in the Chinese domestic bond market, with an eye on buying a majority stake in a local agency or setting up a new entity there to do so, its chief financial officer said. The world’s largest credit rater’s plan to assess the yuan-denominated bonds of Chinese firms follows the People’s Bank of China’s decision last year to allow international ratings companies to set up their own businesses in the nation. (Bloomberg: read more)
  • China to Sanction Increased Presence Of Foreign Asset Managers: China is moving to open up its booming wealth management sector to foreign asset managers looking to break into the domestic market. But it will take a combination of dedication to courting local savers, and regulators’ continued crackdown on risky investment vehicles, for them to capture a meaningful share of the country’s growing middle class. (Financial News: read more)
  • Hong Kong Announces New Regulation For Digital Banks: Hong Kong's efforts to encourage a wave of new digital banking providers advanced today when the territory's central bank published a set of revised guidelines for new entrants. The banks will be subject to the same set of supervisory principles and key requirements applicable to conventional lenders, needing at least HK$300 million (US$38 million) in capital. They will also need to submit an exit plan. (Finextra: read more

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