Latest articles from Simon Turmaine

Newsletter November 2010: Drive to reduce ratings use by regulators and markets

BASEL – Regulators’ long-term plan to diminish the role of credit rating agency ratings in standards, laws and regulations, as well as reduce banks and investors reliance on such ratings, took a step forward in late October with the release of a set of principles for achieving this goal. The principles* have been drawn up by the Financial Stability Board (FSB), the body coordinating international regulatory reform efforts.

Newsletter November 2010: Rating agencies face new EU round of regulation

BRUSSELS – The European Commission is preparing a new round of regulations for credit rating agencies (CRAs), with a public consultation focusing on a range of concerns arising out of the euro debt crisis. Some of these concerns are long-standing, troublesome issues, such as the lack of competition in the credit rating business, the absence of common civil liability law in Europe, and inherent conflicts of interest in the standard “issuer pays” model used by the three biggest agencies – Standard and Poor’s, Fitch Ratings, and Moody’s Investor Services.

Newsletter November 2010: Official push for OTC derivative standardisation

BASEL – International standard setters are pushing ahead as fast as possible with plans to reduce the weaknesses in the over-the-counter (OTC) derivatives market that contributed to the build up of systemic risk during the financial crisis. The proportion of the market that is standardised should be “substantially increased,” says a late October report from the Basel-based Financial Stability Board (FSB), the international body tasked with coordinating financial regulatory reform. Authorities should work with market participants to increase standardisation using incentives and, where appropriate, regulation, it says.

Newsletter November 2010: Supervisors must spot risks in aggregation models

BASEL – Financial supervisors must recognise the risks posed by the continued use of so-called risk aggregation techniques because the firms using them may not fully understand the risks they face, according to the Joint Forum of global banking, insurance and securities regulators.

Newsletter November 2010: OTC derivatives reforms could increase clearing risks

BASEL – Key risks arise in financial market clearing activities when markets undergo major change such as that underway in over-the-counter (OTC), off-exchange derivatives trading, according to a central bankers’ study.

Newsletter November 2010: New EU insurance authority urged to use powers

LONDON – Powers to issue guidelines and make recommendations will be a sturdy instrument in the hands of Europe’s soon-to-be-born new insurance authority – and the powers should be used, according to the European Union regulator whose agency will be replaced by the new and strengthened body.

Newsletter November 2010: Op risk insurance must be part of risk management

BASEL – Banks buying operational risk insurance to reduce capital charges determined by advanced measurement techniques must ensure the insurance is properly integrated into their risk measurement and management systems, according to global banking regulators.

Newsletter November 2010: Equity finance the key for risky banks

NEW YORK – Banks should be financed more heavily by equity rather than short-term debt – much, much more equity, much, much less short-term debt, Britain’s central bank chief said in suggesting the likeliest eventual solution to the problem of risky banks.

Newsletter November 2010: G20 stalled over global standards convergence

Accounting splits continue to bar progress to global accounting rules. The divisions will not simply go away

Newsletter November 2010: Insurance regs go global

G20 systemic risk reforms move insurance up the international agenda and out of the shadow of the Basel Committee. Focus is increasingly on insurer interconnections with banking