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25 September 2008

This week in "Brussels"

Articles from 18 September 2008 - 25 September 2008

G-7 welcomes US bail-out plan
The G-7 welcomed the US bailout plan. “We recognize the importance of making regulation more effective and bringing investors back into a liquid and stable marketplace”, the Group said.  View Article

FASB Herz - regulatory architecture needs to be re-thought
Balkanized regulatory systems, both in the US and across international financial markets, may have made it difficult, if not impossible, to rein in the exuberance driving the markets, the FASB chairman said.  View Article

Bernanke, Paulson call for urgent implementation of bailout plan
Financial markets remain under extraordinary stress, and action by the Congress is urgently required, Bernanke said. Secretary Paulson called to avoid slowing the plan down with other provisions that are unrelated or don't have broad support.  View Article

US Senate Banking Committee to amend Paulson Plan
The Chairman of the US Senate Banking Committee Chris Dodd, is concerned that the Treasury proposal is asking for $700 billion to purchase any asset without any transparency as to the process, and issued an alternative proposal.  View Article

Goldman Sachs and Morgan Stanley gave up investment banking status
Pending a statutory five-day anti-trust waiting period, the Federal Reserve approved the applications of Goldman Sachs and Morgan Stanley to become bank holding companies regulated by the central bank.  View Article

Proposed Treasury authority to purchase troubled assets
The Treasury Department has submitted legislation to the Congress requesting authority to purchase troubled assets from financial institutions. Also foreign banks will be able to make use of the programme, Secretary Paulson said.    View Article

US Treasury announces guaranty program for money market funds
For the next year, the U.S. Treasury will insure the holdings of any publicly offered eligible money market mutual fund, both retail and institutional, that pays a fee to participate in the program.  View Article

Fed approves two interim final rules to provide liquidity
The first would provide a temporary limited exception from the Board's leverage and risk-based capital rules for bank holding companies and state member banks. The second relates to exemptions on the transactions between a bank and its affiliates.  View Article

SEC halts short selling of financial stocks
The SEC took temporary emergency action to prohibit short selling in financial companies. It will apply to the securities of 799 financial companies. The action is immediately effective.  View Article

WSJ: U.S. drafts sweeping plan to fight crisis
The federal government is working on a plan that would take bad assets off the balance sheets of financial companies, the Wall Street Journal reports. Another proposal would be the creation of federal insurance for investors in money-market mutual funds.  View Article

Statement on short-selling practices in Japan
Japan has already in place restrictions on short-selling. In addition, there is an “uptick rule requirement” that short-selling are prohibited, in principle, at prices no higher than the latest market price announced by the stock exchange conc  View Article

ECON consolidated report on Lamfalussy follow-up now available
ECON Committee issued the consolidated final report on the Lamfalussy follow-up: Future Structure of Supervision, as adopted on 10 September.  View Article

Bank supervisors endorse principles for liquidity risk management and supervision
The principles underscore the importance of establishing a robust liquidity risk management framework that is well integrated into the bank-wide risk management process.   View Article

MLex Comment: SEPA– overcoming the cash obstacle
While Europe's SEPA project stumbles amid industry squabbles and implementation delays, the key question is how to move consumers away from their over-dependence on cash towards cheaper and more efficient electronic payments.  View Article

CEBS Statement on the Current Crisis Situation
CEBS has established a Task Force to assess the US authorities’ proposals, made on 18 September, focusing on the possible consequences they may have for EU supervised entities.  View Article

CEBS technical advice on liquidity risk management – part 2
The advice sets out CEBS views on liquidity risk management and lays down 30 specific principles-based recommendations on liquidity risk management and supervision, notably in the light of recent market events.   View Article

AMF, BaFin et al halt short selling measures
European regulators undertook steps to stop short-selling practices on their financial markets following the examples in the US and the UK. CESR produced a table providing information about the most recent measures adopted in EU member states.  View Article

FSA statement on short positions in financial stocks
The Board of the FSA agreed to prohibit the active creation or increase of net short positions in publicly quoted financial companies.  View Article

Responses to the Commission consultation on CRAs
The Commission was criticized for the short consultation period which did not allow a proper impact assessment. Most respondents preferred the revised IOSCO Code of Conduct rather than new European regulation.  View Article

New platforms to challenge LSE on reference data
Chi-X, Turquoise and Nasdaq OMX have joined an informal working group formed by Plus Markets to explore alternative market data and price reporting services to those provided by the London Stock Exchange.  View Article

Nasdaq OMX eyes London listings
Transatlantic exchange Nasdaq OMX has disclosed plans to establish a listings venue in London, just days ahead of the launch of its MiFID-compliant pan-European multilateral trading facility.  View Article

ECON draft report on UCITS IV
ECON rapporteur Wolf Klinz made public his draft report on the revision of the UCITS directive adding some 91 amendments to the Commission proposal and introducing the first basic Level 1 provisions for a Management Company Passport.  View Article

McCreevy: No further regulation on Hedge Funds and Private Equity
In an intervention before the European Parliament, Commissioner McCreevy repeated that he does not intend to propose any additional regulation on Hedge Funds and Private Equity.  View Article

Commission proposes further simplification of EU rules on mergers and divisions
The Commission proposal aims at reducing the reporting requirements of companies in the case of mergers and divisions.   View Article

IASB proposes amendments to the retrospective application
The proposals address the retrospective application of IFRSs in selected areas and are aimed at ensuring that entities applying IFRSs will not face undue cost or effort in the transition process.  View Article

IASB proposes revised definition of discontinued operations
The amendments to IFRS 5 are to revise the definition and require additional disclosure about components of an entity that have been disposed of or are classified as held for sale.   View Article

BBA: IASB should rethink fair value accounting
Accounting standards-setters need to recognise that "fair value" is not always the appropriate accounting method for valuing financial instruments, the BBA said.  View Article

CESR demands seat in Monitoring Group
CESR has strong concerns regarding the composition of the Monitoring Group and refers to the fact that the composition of the Group should reflect the split of powers in the EU between the European Commission and CESR members.  View Article

EFRAG comment letter on ‘Financial Instruments with Characteristics of Equity’
EFRAG does not consider the proposals suitable for substituting existing IFRS requirements and recommends carefully distinguishing between equity and liability in future work.  View Article

EFRAG consults on initial assessments to IAS 39 - Eligible Hedged Items
EFRAG is consulting both on its assessment of the amendment against the EU endorsement criteria and on its initial assessment of the costs and benefits that would arise from the implementation of the amendment in the EU.  View Article

EFRAG Update September 2008
The September edition of the EFRAG Update summarises the discussions held at the recent EFRAG TEG meetings.   View Article

ECON meeting 22 September
Committee held an exchange of views on the preliminary findings of the QIS 4 study and held a first debate on the UCITS report.   View Article

Plenary Meeting 22-25 September
EP discussed the situation of the world financial system and its consequences on the European markets. EP also adopted the Rasmussen report on Hedge Funds and the Lehne report on Transparency of institutional investors.  View Article

© Graham Bishop

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