Sunday 19th April 2015
NEWS TICKER FRIDAY APRIL 17TH 2015: -On June 9, 2015, the Federal Trade Commission will host a workshop to examine competition, consumer protection, and economic issues raised by the proliferation of online and mobile peer-to peer business platforms in certain sectors of the economy, often referred to as the “sharing economy.” The workshop will take place in Washington, D.C., at the FTC’s Constitution Center conference space. Peer-to-peer platforms, which enable suppliers and consumers to connect and do business, have led to the emergence of new business models in industries that have been subject to regulation. The FTC’s sharing economy workshop will explore how regulatory frameworks can accommodate new sharing economy business models while maintaining appropriate consumer protections and a competitive marketplace. “We are seeing a dramatic growth in products and services that are built on peer-to-peer platforms, such as ride-sharing and property rentals, as more entrepreneurs harness the power of technology to reach more consumers,” says FTC Chairwoman Edith Ramirez. “The resulting business models have great potential to benefit our economy and consumers. Through our workshop, we want to better understand the competitive impact of these new business models, as well as their interactions with existing regulatory frameworks.” - he Straits Times Index (STI) ended 6.42 points or 0.18% lower to 3525.19, taking the year-to-date performance to +4.76%. The top active stocks today were Keppel Corp, which declined 2.01%, DBS, which gained 0.91%, SingTel, which gained 0.23%, UOB, which gained 0.38% and ComfortDelGro, with a 1.70% advance. The FTSE ST Mid Cap Index fell 0.30%, while the FTSE ST Small Cap Index rose 0.06%. The outperforming sectors today were represented by the FTSE ST Utilities Index, which rose 1.60%. The two biggest stocks of the Index - United Envirotech and Hyflux – ended 5.12% higher and 2.09% lower respectively. The underperforming sector was the FTSE ST Basic Materials Index, which slipped 1.82%. Midas Holdings shares declined 2.56% and Geo Energy Resources remained unchanged - It has been a testing day in the markets, with most stock markets reporting substantial losses. The spectre of another crisis in Greece as the IMF talked tough on the country adhering to its repayment schedule, a terminal outage at Bloomberg and a clampdown on OTC and short selling in China combined to test investor sentiment. The FTSE 100, fell briefly below 7000 to end up finding support at 7007; however Spain's Ibex and Italy's FTSE MIB were both 2% down while the German DAX 30 slid 1.8% and France's CAC 40 fell 1.2% - The outage impacted the UK DMO’s offer of £300m 1 month bill, due 18-May-2015(ISIN GB00BDNKWT09); the £1,000m 3-months bill due 20-Jul-2015 (ISIN GB00BDNLZ833), and the £1,500m 6-months bill due 19-Oct-2015 (ISIN GB00BDNNDG38) was conducted between midday and14.30 today. Any bids submitted in the aborted operation earlier this morning were deemed null and void - Catastrophe bond issuance is forecast to have risen almost 30% so far this year, though the size of the market remains modest. The increase in demand for cat bonds means that some bonds are now trading at a discount to their original issue price for the first time in years. Issuance for the year through to mid-April is predicted to be up 27% on 2014, at around $2.1bn, The full-year trend also looks positive, following on from a record cat bond issuance of $8.4bn in 2014 - Moody's Investors Service has described in detail the approach it takes to allocating expected credit losses across the various classes of debt issued by banks in the US, the EU and Switzerland. The liability hierarchy or "waterfall" that Moody's employs to allocate estimated losses to debt classes in these three jurisdictions incorporates the implications of key structural differences in their bank resolution and bail-in frameworks. In this way, the liability hierarchy aims to capture the prioritisation authorities will give different debt classes when apportioning losses to creditors in the event of a bank's failure. The construction of a given bank's liability structure at failure serves as the starting point of Moody's Loss Given Failure (LGF) analysis, instituted as part of its new bank rating methodology. The LGF framework is used to assess and differentiate creditor risk across banks' liability structures, as detailed in Moody's report "How Resolution Frameworks Drive Our Creditor Hierarchies." The bank resolution and bail-in frameworks in the US, EU, and Switzerland all aim to limit the use of public funds in bank resolutions while mitigating risks to financial stability. Important differences in these frameworks include the degree of power authorities have to write down or convert capital instruments, differences in depositor preference, and variations in the obligations of holding companies to their operating companies - Close Brothers has reportedly acquired advisory firm Mackay Stewart & Brown for an undisclosed amount. Andy Cumming, head of advice at Close Brothers Asset Management, said the acquisition would strengthen the national advice firm’s Scottish operation.
Europe

According to Eurostat, annual inflation is up to -0.1% in the euro area in March, up from -0.3% in February. In March 2014 the rate was 0.5%. European Union annual inflation is also reported to be -0.1% in March 2015, up from -0.3% in February.

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A  new report from Celent looks at what is remaining from EMIR for central counterparties (CCPs) and the impact of CSDR on central securities depositories (CSDs).

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Gordon Brothers Europe, a firm specialising in restructurings for the retail, commercial and industrial sectors has appointed Simon Bamford and announced the opening of a new office in  Bristol.

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In a letter to the European Commission (EC) from the 25 March, the High Yield Division of the Association for Financial Markets in Europe (AFME) shares its views on developments related to European insolvency laws, and provides a brief response to the EC’s recommendation of March 12th last year on a new approach to business failure and insolvency. AFME says differences between national insolvency and restructuring regimes create uncertainty and increase costs for issuers and investors, discourage cross-border investment and often lead to liquidation rather than providing an opportunity to restructure a company in financial difficulty

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The launch of quantitative easing (QE) by the European Central Bank, increasingly attractive corporate financing conditions, and record inflows into European high-yield funds begs the question: how close is Europe's leveraged finance market to boiling over? Ratings major Standard & Poor’s analysts say they are struck by the level of discipline exhibited by both arranging banks and European institutional investors at this mid-point in the financial cycle.

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ESMA has issued a formal consultation on the terms of Article 25(10) of MiFID II [EU Directive 2014/65] which requires the European market regulator to develop comprehensive guidelines for the assessment of bonds and other forms of securitised debt and money market instruments (and which specifically incorporate a structure which makes it difficult for the client to understand the risk involved) as well as structured deposits (specifically incorporating a structure which makes it difficult for the client to understand the risk of return or the cost of exiting the product before term). 

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The record corporate high-yield issuance of $30bn last year from Italy, Spain, Portugal, Greece and Ireland is  unlikely to be repeated in 2015 as caution returns to debt capital markets, says Moody's in a report today.

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In today’s speech by Mario Draghi, president of the European Central Bank (ECB) he explained the operation of the central bank’s quantitative easing program and said that according to recent data and survey evidence, growth in Europe is gaining momentum.

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