Week InReview | Fiduciary rule divide remains wide at congressional hearing | FSB plans to disregard industry opposition & retain structured-note ban | OFR: Repo data collections 'voluntary & incomplete' | G-20 finance ministers and central bankers sketch out results of Ankara summit | Binge Reading Disorder
Friday, September 11, 2015
Fiduciary rule divide remains wide
Witnesses appear not to sway lawmakers' positions
(Sep 10) The impassioned fight over the Department of Labor's fiduciary rule showed no signs of cooling as lawmakers and witnesses at times hotly debated the proposal at a congressional hearing. One of the focal points of the hearing, held jointly by two subcommittees of the House Financial Services Committee, was a bill put forward by Rep. Ann Wagner (R-Mo.) that would block the DOL from going forward until the Securities and Exchange Commission completes its own fiduciary rulemaking. The lone witness who opposed Wagner's bill, Mercer E. Bullard, president and founder of Fund Democracy Inc. and a law professor at University of Mississippi School of Law, had angry words to match Wagner's. "The SEC for the last 15 years has exhibited a level of rulemaking paralysis that is unprecedented, and for the Capital Markets Subcommittee to want to delay anything while the SEC does rulemaking, I think is the height of hypocrisy," he said. The hearing was held by the Capital Markets and Government Sponsored Enterprises Subcommittee, as well as the Oversight and Investigation panel.
FSB plans to retain structured-note ban
Disregards industry opposition
(Sep 7) The Financial Stability Board plans to retain a ban on structured notes in new rules intended to keep taxpayers off the hook when the world's biggest banks fail, disregarding industry opposition.
  • An Aug. 24 FSB document on the total loss-absorbing capacity, or TLAC, standards cites a "strong consensus" among regulators to exclude structured notes from the list of eligible liabilities.
  • In a June 4 working paper, the FSB had said admitting the notes was an "option under exploration."
  • The FSB, which brings together regulators and central bankers from the Group of 20 nations, plans to deliver the final TLAC rules for endorsement by G-20 leaders in November.
  • FSB Steering Committee members "expressed differing views on the calibration" of the TLAC minimum standard, according to the document. The two-stage phase-in approach is a response to this divergence of opinion.
  • The regulator also proposed an "implementation review" by end-2019 or later.
Repo data collections 'voluntary & incomplete'
OFR says in new report
(Sep 9) While regulators collect "granular" data on tri-party and GCF repo, it still omits bilateral trades and isn't publicly available, according to a working paper published by Office of Financial Research.
  • Collection also lacks data on counterparties or collateral management that are "essential for market monitoring purposes."
  • Data also collected in an "inconsistent manner."
  • "Reference Guide to U.S. Repo and Securities Lending Markets," a reference guide on U.S. repo and securities lending markets, discusses the main institutional features of these markets, their vulnerabilities, and data gaps that prevent market participants and regulators from addressing known vulnerabilities.
G-20 summit's final communique
Finance ministers & central bankers sketch out results
(Sep 9) G20 Finance Ministers and Central Bank Governors convened for the third time under the Turkish Presidency in Ankara on 4-5 September 2015. Attended by the Finance Ministers and Central Bank Governors of the G20 members, invited countries, and the heads and senior representatives of the relevant international organizations, the meeting provided an opportunity to make a comprehensive evaluation of the progress on the agenda and Finance Track deliverables to be submitted to G20 Leaders at the Antalya Summit, and discuss actions required to achieve G20's goals for this year.

Highlights:
Binge reading disorder
Hand-curated, chosen with love
Transparency.
Inclusiveness.
Consensus.