LONDON – The one-off costs for UK financial firms of implementing the EU’s sweeping new Market in Financial Instruments Directive (MiFID) are estimated to be between £877 million ($1.7bn)and £1.17 billion ($2.3bn) in a paper published in late November by the Financial Services Authority (FSA).* Additional, on-going costs are reckoned to be between £88 million and £117 million a year.

LONDON – A group of 15 European professors of finance and other academics is calling for a US-style Prompt Corrective Action (PCA) regime to prevent an excessive decline in bank capital when the new Basel risk-based capital rules are introduced across the EU. The group, which forms the European Shadow Financial Regulatory Committee (ESFRC), and meets regularly to discuss public policy issues, fears that the new rules (Basel II) could result in such large falls in minimum capital that it will leave banks vulnerable to major shocks and increase the likelihood of banking crises.

NEW YORK – After the striking progress in reducing sloppy back-office practices and strengthening operational systems in the credit derivatives market, the major financial firms are turning their attention, with similar apparent zeal, to the equity derivatives sector. Some 17 major US and European banks and investment banks have written to Timothy Geithner, president of the Federal Reserve Bank of New York, setting out their plans to improve the efficiency of the equity derivatives market. They also registered an intention to monitor the interest rate, currency and commodity derivatives markets.

SYDNEY – Australia’s banking supervisors said in November they are amending their prudential rules to reflect the internationally agreed guidance on securitisation contained in the framework of the Basel II bank safety rules.

GENEVA – Europe’s top banking regulator reiterated in early December her confidence that supervisors will find “practical and reasonable” solutions to problems created by differences in European and US plans for implementing the Basel II bank safety rules.

JERUSALEM – Israel’s plans for implementing the Basel II bank capital rules are expected to get a boost with the appointment of a new head of banking supervision at the nation’s central bank.

FRANKFURT – The European Central Bank (ECB) is contributing to the intense EU debate over hedge fund regulation with a proposal that credit information on these funds be kept on a central register operated by the private sector. This proposal, which comes at a time of heightened concern over the potential risks that hedge funds pose to financial stability, is floated in the December issue of the ECB’s Financial Stability Review.

BRUSSELS – “All options are on the table,” a top European Commission official said in December in respect of the vexed question of the trading activities of commodity firms under European Union financial regulations.

SINGAPORE – Singapore regulators issued in November a fourth instalment of their plans for implementing the Basel II bank safety rules, including proposals for public disclosure requirements under pillar 3 of the Basel structure.

So-called “name concentration” risk is likely to represent a smaller marginal contribution to economic capital than sector concentration for a typical commercial bank with a medium to large sized loan portfolio, according to a risk study by global banking regulators.