Monday 24th November 2014
NEWS TICKER – FRIDAY NOVEMBER 21ST 2014: The director of the National Security Agency, Navy Admiral Michael Rogers, says he expects to see adversaries launch a cyber-attack in the next few years aimed at severely damaging America's critical infrastructure. "I fully expect that during my time as commander, we're going to be tasked to help defend critical infrastructure within the United States because it is under attack by some foreign nation or some individual or group," Rogers told the House Select Committee on Intelligence this morning (EST). Rogers, who also serves as commander of the US Cyber Command, says the government is better prepared to defend against those attacks than it was two years ago.On November 24th, the Federal Reserve will conduct a fixed-rate offering of term deposits through its Term Deposit Facility (TDF) that will incorporate an early withdrawal feature. This feature will allow depository institutions to obtain a return of funds prior to the maturity date subject to an early withdrawal penalty. The Federal Reserve will offer eight-day term deposits with an interest rate of 0.29000% and a maximum tender amount of $20,000,000,000. The penalty for early withdrawal is 0.75%, the minimum tender per institution is $20,000,000,000 - The Straits Times Index (STI) ended +29.72 points higher or +0.90% to 3345.32, taking the year-to-date performance to +5.70%. The FTSE ST Mid Cap Index gained +0.64% while the FTSE ST Small Cap Index gained +0.83%. The top active stocks were SingTel (+0.51%), UOB (+1.37%), DBS (+1.64%), Keppel Corp (+0.22%) and OCBC Bank (+1.16%). The outperforming sectors today were represented by the FTSE ST Basic Materials Index (+1.70%). The two biggest stocks of the FTSE ST Basic Materials Index are Midas Holdings (+1.72%) and Geo Energy Resources (+3.02%). The underperforming sector was the FTSE ST Technology Index, which gained +0.16% with Silverlake Axis’s share price gaining 0.41% and STATS ChipPAC’s share price unchanged. The three most active Exchange Traded Funds (ETFs) by value were the IS MSCI India (+1.70%), SPDR Gold Shares (+0.34%), DBXT MSCI Singapore IM ETF (unchanged). The most active Real Estate Investment Trusts (REITs) by value were Suntec REIT (unchanged), Ascendas REIT (unchanged), CapitaCom Trust (+0.89%) - In an interview with US online service Careers Info-Security News Greg Shannon, chief scientist at the CERT Division of Carnegie Mellon University's Software Engineering Institute says that to defeat cyber-adversaries, cybersecurity professionals should adopt a contrarian attitude, says. "Having that contrarian point of view allows you to get into the mindset of the adversary," Shannon says in an interview with Information Security Media Group. "How would this technology work if it did something the designer of it didn't think of?" he asks. "Certainly, that's the way the adversary is thinking, coming up with new attacks, new threats. They're looking at an app, a piece of software or some websites, [and they think] 'What can I do here that the designer didn't think of? Is there a way to get information through channels, through tricks that weren't anticipated? Is there some frailty of humans that I can exploit to get information out of them that they wouldn't normally give me?'" – Raiffeisen Bank International warned in an analyst conference call yesterday that profits in its Russian business would be challenged in Q4 versus Q3. The bank’s Chief Financial Officer Martin Gruell said higher risk provisioning and increased operating expenses could cut profits in its single most profitable market. "I would expect the fourth quarter to be a bit lower than the third quarter," he said. He believes the worst of the rouble's devaluation is over, but explained that the impact on the group’s capital from the dip in the ruble, could push RBI's core capital below 10% of risk-weighted assets by the end of this year - The performance of the Dutch residential mortgage-backed securities (RMBS) market remained stable during the three-month period ended September 2014, according to the latest indices published by Moody's Investors Service. The 60+ day delinquencies of Dutch RMBS, including Dutch mortgage loans benefitting from a Nationale Hypotheek Garantie, decreased to 0.95% in September 2014 from 0.98% in June 2014. At the same time, the 90+ day delinquencies decreased to 0.72% during the three-month period compared with 0.75% in June 2014. Cumulative defaults continued to increase to 0.54% of the original balance, plus additions (in the case of Master Issuers) and replenishments in September 2014, compared with 0.47% in June 2014, says the ratings agency. Cumulative losses slightly increased to 0.11% in September 2014 from 0.10% in June 2014 – According to a Clearstream client bulletin on November 18th, the US Internal Revenue Service and the US Treasury published an amendment to the current temporary regulations (TD9657) regarding FATCA. The amendment impacts Foreign Financial Institutions (FFIs) who have entered into an agreement with the IRS to become a participating FFI. It amends the determination date and timing for reporting with respect to the 2014 calendar year.

IOSCO consults on internal controls and procedures of credit rating agencies

Friday, 25 May 2012
IOSCO consults on internal controls and procedures of credit rating agencies The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published a consultation report, Credit Rating Agencies: Internal Controls Designed to Ensure the Integrity of the Credit Rating Process and Procedures to Manage Conflicts of Interest. This Consultation Report describes certain internal controls and procedures that credit rating agencies (CRAs) use to promote the integrity of the credit rating process and address conflicts of interest, with a view to promoting a better understanding of these practices. The views of stakeholders and CRAs on these questions will assist the IOSCO with further analysis of the internal controls and procedures used by CRAs. http://www.ftseglobalmarkets.com/

The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published a consultation report, Credit Rating Agencies: Internal Controls Designed to Ensure the Integrity of the Credit Rating Process and Procedures to Manage Conflicts of Interest. This Consultation Report describes certain internal controls and procedures that credit rating agencies (CRAs) use to promote the integrity of the credit rating process and address conflicts of interest, with a view to promoting a better understanding of these practices. The views of stakeholders and CRAs on these questions will assist the IOSCO with further analysis of the internal controls and procedures used by CRAs.

The report is based on an IOSCO review of CRAs that focused on the internal controls established by CRAs to enhance the integrity of the credit rating process and on the procedures to manage conflicts of interest. The review was motivated by the role of CRAs in the 2008 financial crisis, which raised concerns about the quality of credit ratings and credit rating methodologies, the timeliness of adjustments to credit ratings, and, more generally, the integrity of the credit rating process.  The 2008 financial crisis also raised concerns about how conflicts of interest are being managed by CRAs.

The internal controls and procedures described by the Consultation Report are divided into six categories.



 Internal Controls:

Quality of the rating process

Structural support to ensure the quality of the rating process

Monitoring and Updating

Integrity of the Rating Process

Procedures:

Managing Firm-Level Conflicts

Managing Employee-level Conflicts  

Despite concerns about their performance during the crisis, CRAs continue to play an important role in most modern capital markets. Issuers and corporate borrowers rely on the opinions of CRAs to raise capital. Lenders and investors use credit ratings in assessing the likely risks they face when lending money to, or investing in, securities of a particular entity.  Institutional investors and fiduciary investors, likewise, use credit ratings to help them allocate investments in a diversified risk portfolio.  Finally, laws and regulations use credit ratings to distinguish creditworthiness.

This report seeks to describe the operational practices of the CRAs that are designed to give effect to the relevant provisions of the IOSCO Code of Conduct Fundamentals for Credit Rating agencies, which was published in December 2004 and revised in May 2008.

The closing date for responses to the consultation is on Monday  July 9th 2012.

  

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