Week InReview:  September 5, 2014

IN THE INDUSTRY 

Swaps Rule: (Sept. 5) U.S. banks would need $644 billion in collateral to offset risks in swaps traded among themselves, according to an analysis of rules re-proposed by regulators. Read more. 

Derivatives: (Sept. 5) More than a dozen global financial institutions face first class-action lawsuit over claims they colluded to manipulate ISDAfix, a benchmark used to set rates for interest rate derivatives and other financial instruments. Read more. 

Cyber Security: (Sept. 5) JPMorgan suffered an exodus of tech talent before breach by hackers, as their new cybersecurity chief was just getting acquainted with his employer and its sprawling tech infrastructure. Read more.

Tax Inversions: (Sep. 4) Treasury Secretary calls for ending tax provisions that encourage U.S. companies to create jobs overseas, raising the minimum wage and investing in public infrastructure. Read more.

CME Group Files Rule:(Sep. 4) Barring a challenge by the CFTC, CME Group Inc. will adopt a new rule Sept. 15 designed to deter a wide range of disruptive market practices. Read more.

Comings & Goings:(Sept. 4) Edward J. DeMarco, who worked to shrink Fannie and Freddie as their overseer at the FHFA after the 2008 financial crisis, started a new job this week: senior fellow at the Milken Institute's Center for Financial Markets. DeMarco said he'll still be pushing for an overhaul of the U.S. housing-finance system in his new role. Read more. 

(Sept. 3) Tony West, the No. 3 Justice Department official who won almost $37 billion in settlements from U.S. banks over shoddy mortgage practices, is leaving the government. West, who hasn't said what he'll do next, will step down Sept. 15 after five years. Read more.

Swaps/Liquidity: (Sept. 3) The Fed, the FDIC, and the OCC proposed to ease collateral requirements for swaps traded between banks, manufacturers and other firms by seeking to limit the impact on smaller companies and global liquidity. In a separate proposal, the regulators move to strengthen liquidity requirements for banks with assets of $50 billion and up, with compliance ordered by 2017. Read more. 

Living Wills: (Sept. 3) Banking regulators issued important living will guidance in August after designating the resolution plans filed by 11 banks as deficient. Ex-FDIC Chief says the rules add complexity. Read more.

BlackRock to Advise ECB: (Sep. 2) The ECB has hired BlackRock Inc. to advise on developing a program to purchase "simple, transparent and real" asset-backed debt in the absence of clear European or international standards on what constitutes a high-quality, transparent product worthy of preferable regulatory treatment. Read more.

REITs: (Sep. 2) FHFA rules would kick REITs out of home-loan banks and keep investment firms and lenders lacking customer deposits out of the U.S. government-chartered system. Read more.

FDIC Suit Dismissed: (Sept. 2) Deutsche Bank and RBS won dismissal of an FDIC suit on mortgage loans; the court ruled the FDIC waited too long to file the lawsuit. Read more.

Cyber Security: (Aug. 30) If cyber-terrorists try to wreck the financial system's computer networks taxpayers will probably have to cover much of the damage. Treasury officials quietly told bank insurers about a government backstop that doesn't explicitly cover electronic intrusions. Read more.

ON THE HILL

Non-Bank SIFIs: (Sept. 4) After MetLIfe "strongly disagrees" with FSOC systemic ruling, Rep. Scott Garrett, chairman of the House Financial Services Committee's capital markets panel said the FSOC's MetLife decision is "irresponsible" and "inappropriate." Read more. 

(Sept. 3) Republican lawmakers accused the FSOC of holding insurers and asset managers to different standards in its deliberations over whether to designate certain companies as systemically important financial institutions. Read more.

AT THE AGENCIES

FHFA (Comments due: Sept. 8, 2014)  Request for comment on Fannie Mae and Freddie Mac draft private mortgage insurer eligibility requirements. Read more.

SEC (Effective date: Sept. 8, 2014)  Final rule applying security-based swap dealer and major security-based swap participant definitions to cross-border security-based activities. Read more.

CFPB (Comments due: Sept. 10, 2014)  Request for information on the use of mobile financial services by consumers and its potential for improving the financial lives of vulnerable consumers. Read more.

SEC (Comments due: Sept. 17, 2014)  Temporary rule regarding principal trades with certain advisory clients. Read more.

CFPB (Comments due: Sept. 22, 2014)  Extended deadline on a plan to expand complaint narrative data regarding consumer financial products and services via its web-based, public-facing database. Read more.

FDIC, OCC, Fed (Effective date: Oct. 1, 2014)  Final rule adopting a technical correction of the definition of "eligible guarantee" in the agencies' risk-based capital rules. Read more.

SEC (Effective date: Oct. 14, 2014)  Final rule on money-market fund reform and amendments to Form PF. Read more.

SEC (Comments due: Oct. 14, 2014)  Proposed rule removing certain references to credit ratings and an amendment to the issuer diversification requirement in the money-market fund rule. Read more.

COMMENT LETTERS: (Sept. 3) The Financial Services Roundtable and SIFMA asked the three banking agencies to expand a review of outdated rules and include the CFPB in the interagency effort meant to relieve regulatory burdens. Read more.

This is not an all-inclusive list of congressional, agency and market participant actions related to these issues. It is a snap-shot of what we believe is of most interest to institutional investors. Some links are to subscriber-only sites.

Be sure to check our website for this InReview, upcoming events, and all our INVESTORS updates.  www.association.institutionalinvestors.org