Week InReview | FSB agrees on proposals meant to reduce asset-management risks | Fund boards face broad threats, SEC's White warns | Banks get chance to show just-finished trading rule is too tough | In Case You Missed It + Binge Reading
Friday, April Fools Day, 2016
Let's recap
In case you missed it . . .
Reducing asset management risks
FSB to start consultation in mid-2016
(Mar 31) At a meeting in Tokyo this week on their 2016 priorities, including the work it will deliver to the G20 leaders at the summit in Hangzhou in September, global regulators agreed on proposals for how to deal with risks to the financial system "structural vulnerabilities from asset management activities." The Financial Stability Board, created by the Group of 20 nations in the aftermath of the financial crisis, plans to publish its policy recommendations by the end of the year, according to Chairman Mark Carney, also governor of the Bank of England. The FSB encourages "stress testing to assess the individual and collective ability of funds to meet their redemption under stressed market conditions." Their recommendations are designed to address risks posed by:
  • Funds' liquidity mismatch
  • Leverage within funds
  • Operational risk and challenges in transferring investment mandates in a stressed situation
  • Securities lending activities of asset managers and funds
Fundamental Review of the Trading Book
The rule banks think is too tough
(Mar 31) A global panel of regulators, including the U.S. Federal Reserve and the Bank of England, will meet with representatives of the world's largest banks next month to receive feedback on a rule that forces lenders to have sufficient capital to back bonds, derivatives and other securities they intend to trade. The rule, known as the Fundamental Review of the Trading Book (FRTB), was published in January by the Basel Committee on Banking Supervision. Banks want to persuade regulators to make revisions to the rule.
Mutual fund directors face broad challenges
SEC chair recalls stark lessons
(Mar 29) The challenges facing mutual fund directors are broader than ever, and boards need to be proactive and nimble in addressing risks across a wide range of subject areas, Securities and Exchange Commission Chair Mary Jo White told a conference of fund directors. "As areas such as cybersecurity, derivatives, liquidity, trading, pricing and fund distribution become increasingly complex, boards need to assure that they are equipped to address those challenges," White told the Mutual Fund Directors Forum in Washington. The SEC has proposed several rules affecting asset managers, including one that would require funds to enhance their liquidity risk management and one to limit funds' use of derivatives. White told reporters it was a priority to finish those rules this year.
Binge reading disorder
Hand-curated, chosen with love
Inflating Asset Bubbles Spread Like a Zombie Virus

Ethereum, a Virtual Currency, Enables Transactions That Rival Bitcoin's

The Rise and Fall of Tim Leissner, Goldman's Big Man in Malaysia

A Guide to Cool Teen Slang

Lenders 'Freak Out' at London Luxury-Home Woes, Hike Loan Costs
Transparency.
Inclusiveness.
Consensus.