Saturday 5th September 2015
NEWS TICKER, THURSDAY, September 3rd: The Straits Times Index (STI) ended 28.3 points or 0.98% higher to 2906.43, taking the year-to-date performance to -13.63%. The top active stocks today were SingTel, which gained 0.82%, DBS, which gained 0.80%, UOB, which gained 1.40%, OCBC Bank, which gained1.13% and CapitaLand, with a 0.36%advance. The FTSE ST Mid Cap Index gained 0.55%, while the FTSE ST Small Cap Index rose 0.24% - Madrid City Hall announced it would dedicate €10m out of its 2016 budget to a "welcome plan for refugees" to include housing, integration, psychological support and legal aid, City Hall spokeswoman Rita Maestre (Ahora Madrid) said during a press conference on Thursday. Maestre said a budget had been decided upon but that specific numbers had not: "We want to welcome all those who are fleeing from war", adding that given their situation "a permanent housing solution" would be needed in the city. The Mayor of the Spanish capital, Manuela Carmena, said on Wednesday that a decision would be taken at the city government meeting today: "The city of the hug must, of course, be ready to welcome refugees" - The European Bank for Reconstruction and Development (EBRD) is joining international efforts to clean up Tunisia’s Lake Bizerte with a €20m loan and technical assistance to support the expansion and rehabilitation of the sewerage network of the Bizerte region and the rehabilitation of three wastewater treatment plants located near the lake. The EBRD’s investment is part of an integrated environmental programme aimed at de-polluting Lake Bizerte and reducing sources of pollution through investments in wastewater, solid waste and industrial effluents. This programme is labelled by the Union for the Mediterranean and is part of the Horizon 2020 Initiative, which aims to de-pollute the Mediterranean by the year 2020. The European Investment Bank is providing a €40 million sovereign loan to the programme while the European Union Neighbourhood Investment Facility is contributing a €15m grant for both capital expenditure and technical cooperation - Analysis of illicit financial flows (IFFs) by Global Financial Integrity (GFI) shows that over the period 2003-2012 the global volume of IFFs grew by more than 9% annually (. In 2012 (the most recent year for which data are available), illicit flows were estimated at close to $1trn. In response to this unfettered surge in illicit capital leaving developing nations, the UN has endorsed target 16.4 in the Sustainable Development Goals (SDGs), which commits the global community to “significantly reduce” IFFs by 2030. This UN action “represents an historic moment in development policy given that it is the first time the international community has recognized the illicit flows problem and pledged to address it,” says GFI President Raymond Baker - US Secretary of Commerce Penny Pritzker named Eduardo Leite, Chairman of the Executive Committee of Baker & McKenzie LLP, as the new chair of the US section of the US-Brazil CEO Forum. “Mr. Leite has served on the U.S. section of the CEO Forum for several years, and I am pleased that he has agreed to serve as Chairman,” said Secretary Pritzker. The new US section chair was named after the former chair, Ms. Patricia Woertz, Chairman of the Board of Directors of Archer Daniels Midland Company, submitted her resignation from the role. However, Woertz will remain a member of the U.S.-Brazil CEO Forum, and Leite will complete the current three-year term, which ends on August 13th 2016 - MarketAxess Holdings Inc. (Nasdaq:MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced total monthly trading volume for August 2015 of $75.5 billion, consisting of $43.7 billion in U.S. high-grade volume, $26.7bn in other credit volume, and $5.1 billion in liquid products volume. MarketAxess is providing both the reported and adjusted estimated US high-grade TRACE volumes on its website. The Company believes that the adjusted estimated volumes provide a more accurate comparison to prior period reporting.

Latest Video

Blog

Regulatory Update

The Euro: Preparing for the Unthinkable

Tuesday, 26 June 2012 Written by 
The Euro: Preparing for the Unthinkable One day in 1974, payments failed to move across the leading US dollar payment mechanism, CHIPS, operated by The New York Clearing House. Earlier that day, German regulators had closed a relatively small bank, Bank Herstatt, in Cologne.  Following this closure, banks stopped sending funds to one another; no bank knew whether the recipient might have exposure to Herstatt (and thus might experience unacceptable losses). To their credit, bank regulators spent much of the following decades addressing this risk, both in the payments market and in the FX market through the CLS system. http://www.ftseglobalmarkets.com/

One day in 1974, payments failed to move across the leading US dollar payment mechanism, CHIPS, operated by The New York Clearing House. Earlier that day, German regulators had closed a relatively small bank, Bank Herstatt, in Cologne.  Following this closure, banks stopped sending funds to one another; no bank knew whether the recipient might have exposure to Herstatt (and thus might experience unacceptable losses). To their credit, bank regulators spent much of the following decades addressing this risk, both in the payments market and in the FX market through the CLS system.

Although I was General Counsel of the Clearing House and CLS, participating in these and related developments, it took the events of 2007 and 2008 to drive home their significance. Now, with  a slow-down in the world economy and even the possible demise of the euro, do we once again need to prepare for the unthinkable? And how can any individual firm do so?

At the very least firms need to recognize that these types of risks cannot be managed in silos; there must be a cohesive approach across all business areas and breakpoints – from liquidity and credit risks to regulatory and reputational risks.  If the euro is redenominated, businesses may face market closures, reversion to and rapid devaluation of legacy currencies, mandatory bank holidays, restrictions on convertibility, and a lack of liquidity.  A scenario analysis can help identify how such developments might impact key clients, key markets, and most critically –in the short term – liquidity needs. The information gathered in this analysis should be factored into credit and risk management plans. But most importantly, it needs to be communicated to key people. Your board and your staff need to be prepared for various scenarios, and you may also need to communicate with regulators and suppliers.  A careful analysis of and preparation for all contingencies can help a firm survive even the unthinkable.

Deborah Prutzman

Deborah Prutzman is the founder and CEO of The Regulatory Fundamentals Group (RFG), a New York-based firm that designs and implements business and risk solutions for alternative asset managers and institutional investors. RFG's senior-led team employs a robust suite of tools, including practical alerts on new and potential industry developments and its powerful RFG Pathfinder® knowledge management platform which simplifies the challenges of operating in a regulated environment.  To learn more about The Regulatory Fundamentals Group call (212) 537-4058, email a representative at Information@RegFG.com or visit RegFG.com

Related News

Related Articles

Related Blogs

Related Videos

Current Issue

Tweets by @DataLend

DataLend is a global securities finance market data provider covering 42,000+ unique securities globally with a total on-loan value of more than $1.8 trillion.

What do our tweets mean? See: http://bit.ly/18YlGjP