Week InReview | SEC warns investors about complexity of exchange-traded notes | Banks are worried about trading book capital rules review | Eight FSOC members to testify at house hearing | ICYMI + Binge Reading

Friday, December 4, 2015

Let's recap

In case you missed it . . .

Regulators show interest in blockchain to monitor risk (12/2)

Few takers for junk bond plunge (12/2)

Meet the new currency arbitrageurs: corporate treasurers (12/1)

There's a big drop in U.S. Treasury debt supply coming in 2016 (11/30)

At the New York Fed: Conference on the evolving structure of the U.S. Treasury market (12/4)

Banks are worried about trading book capital rules review

Basel Committee due to publish by year end

(Dec 2) Banks have been so deeply concerned about what the consequences of final revisions to trading book capital rules might be for them they have sent their regulatory affairs teams to discuss their concerns with authorities throughout the world. The Fundamental Review of the Trading Book (FRTB) was on the agenda when the Basel Committee on Banking Supervision met for two days in New York this week. The regulator is expected to publish the FRTB, as well as proposals focused on operational risk, by year-end.

Eight FSOC members to testify at house hearing

Treasurer & Fed Chair expected to be MIA

(Dec 1) Eight of the 10 voting members of the Financial Stability Oversight Council will appear before the House Financial Services Committee on Tuesday, Dec. 8 to testify about the FSOC's "agenda, operations and structure." Witnesses include Securities and Exchange Commission Chair Mary Jo White, Commodity Futures Trading Commission Chairman Timothy Massad and Consumer Financial Protection Bureau Director Richard Cordray. Also slated to appear are Comptroller of the Currency Thomas Curry, Federal Deposit Insurance Corporation Chairman Martin Gruenberg, National Credit Union Administration Chairman Debbie Matz, Federal Housing Finance Agency Director Mel Watt and independent member Roy Woodall Jr. Treasury Secretary Jacob J. Lew, who chairs the council, and Fed Chair Janet Yellen won't participate.

SEC issues exchange-traded notes warning

Concerned about these & other structured products

(Dec 1) The Securities and Exchange Commission warned about the complexity of exchange-traded notes as it pushes investors to better understand the intricacies of structured products. The SEC emphasized the unique features of ETNs, suggesting they have a different set of risks than exchange-traded funds and corporate debt, though they incorporate elements of both. Investors should understand how an ETN's linked index and its fees are calculated, the SEC said. Complexity was mentioned three times in the alert, echoing a concern about these and other structured products. The Financial Industry Regulatory Authority put out a similar notice in 2012.

Binge reading disorder

Hand-curated, chosen with love

The dictator's daughter and a $2 billion tale of greed and graft (Bloomberg)

To get more creative, become less productive (Harvard Business Review)

Even Michael Lewis was surprised Hollywood bet on 'The Big Short' (Vanity Fair)

Hacking a hedge fund: there are worse things than a market crash (Chief Investment Officer)

The brain's 'on-off switch' for human consciousness is even more intriguing than we thought (Extreme Tech)

Transparency.

Inclusiveness.

Consensus.