Many financial officers want to chuck US roadmap for adopting international accounting rules. Bankers see salvation in it

WASHINGTON – The panic restrictions on ‘short selling’ introduced by many countries last autumn are still producing regulatory fallout. In the US the Securities and Exchange Commission (SEC), the securities markets watchdog, decided in early April to seek public comment on proposed new restrictions. A couple of weeks earlier, the International Organisation of Securities Commissions (IOSCO), the Madrid-based body representing over 100 national securities regulators around the world, began a public consultation on its proposed principles designed to help develop a more consistent international approach to the regulation of short selling.

LONDON – The danger that Britain’s proposed tough new liquidity regime for banks might trigger retaliation from other countries has emerged as a major concern among bankers and capital market participants. In a joint letter responding to a consultation on the new liquidity rules, issued in December by Britain’s financial regulator, the Financial Services Authority (FSA), three leading industry associations say the proposed approach could “trigger regulatory retaliation, in which each jurisdiction seeks to ring fence more and more liquidity within its own borders in more and more prescriptive ways.”

BRUSSELS – A compromise deal was finally agreed in mid-April between EU finance ministry representatives and members of the European Parliament over legislation to regulate credit rating agencies (CRAs). The legislation, requiring CRAs to be registered in Europe before their ratings can be used by European investors and issuers, is expected to be passed by the full plenary of the European Parliament later in April.

LONDON – Britain’s chief financial services watchdog backs the creation of a so-called economic cycle reserve as a means of enabling banks to set aside profit in good years to anticipate losses likely to arise in future without transgressing against accounting customs.

BRUSSELS - The global financial crisis shows that Europe needs to clarify the supervisory treatment of holding companies under the Solvency II insurance regime, as well as the treatment of non-European Union parts of a group, according to a report by Europe’s insurance supervisors. “The existing uncertainty may endanger appropriate supervision,” says the report on the lessons of the crisis by the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). CEIOPS is the so-called Level 3 committee of top insurance supervisors from the European Union’s 27 member-states that advises the European Commission, the EU’s executive arm, on insurance regulation issues.

WASHINGTON – Creating a new systemic risk regulator is no panacea – what’s needed is an end to the notion of “too big to fail”, a top US federal banking supervisor said in early April.

GENEVA – Insurers are unhappy with the failure of the accord on financial regulation achieved at the April Group of Twenty (G20) summit to distinguish between guilty and innocent parties in the global financial crisis. This could put them at odds with the industry’s regulators who welcomed the moves announced at the summit.

BRISBANE, Australia – Effective financial regulation has played its part in helping the Australian financial sector famously to withstand the worst effects of the global financial crisis better than many overseas counterparts, a top regulator said in late March.

BRUSSELS – Taken together, the recent and planned initiatives of the Basel Committee should promote a more robust banking sector and limit the risk that weaknesses in banks amplify shocks between the financial and real sectors, the Committee’s chairman, Nout Wellink told Brussels lawmakers at the end of March. “Because our measures are far-reaching and ambitious, they will need to be phased in over a reasonable timeframe,” he added.