G20 watchdog FSB to set out shadow bank measures Nov. 10; Bank of England updates on non-banks on Nov. 7; UK regulators eye domestic action on liquidity
Britain,
rattled by the recent near meltdown of some pension funds, is pressing
ahead to tighten oversight of the so-called shadow banking sector,
taking the lead ahead of possible co-ordinated international action.
UK
regulators could preempt recommendations by the G20's Financial
Stability Board (FSB) to require permanently higher liquidity buffers
for Liability Driven Investment (LDI) funds - used by UK defined benefit
pension schemes - backed by regular stress tests, two sources said.
The Bank of England in September had to buy UK government bonds
after the 1.6 trillion pound ($1.85 trillion) LDI sector struggled to
come up with extra collateral to cover crashing bond prices.
It
once again shone a spotlight on patchily regulated non-bank financial
intermediaries such as investment funds, insurers and pension schemes,
now totalling over $200 trillion globally.
The
BoE last month called for "effective policy outcomes" from the FSB to
improve resilience and remediate "structural vulnerabilities" in
non-banks...
more at Reuters
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