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The European Union has allowed lobbyists to blunt the teeth of its long-awaited money market fund reform act.
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The European Central Bank, European Commission and the European Banking Authority are pulling in different directions when it comes to covered bonds with extendible maturity structures. Time for a bit of harmonisation.
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The quixotic quest of Minneapolis Federal Reserve president Neel Kashkari to “end too big to fail” requires nothing less than a total reordering of US bank regulation (and probably implies ditching Basel as well). But really solving the problem can’t just mean restructuring the banking system, it means nothing less changing how we think about money and debt as well.
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There may be grounds for criticising the UK’s asset management industry, as the Financial Conduct Authority has done this week. Finding that price competition among active managers is weak, it proposes new regulations to make charges and policies clearer.
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Banca Monte dei Paschi di Siena’s debt-for-equity swap is the bank resolution and recovery directive (BRRD) working in practice. Bondholders have no escape. -
Issuers and their bankers have been too slow to react to the swift change in sentiment since the US election. That oversight became glaringly obvious this week with deals from BBVA and ANZ, but the mood swing was clear well before that.
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This week, those in the capital markets showed it’s not just electorates that can deliver surprises. Investors got one back — by making markets rise on a shock Donald Trump election victory.
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The European Central Bank’s politicised decision to allow bail-inable German senior unsecured debt to be eligible for repo, whilst denying the same rights for everyone else, is untenable.
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Central bank stimulus will weigh on UK RMBS issuance in the short term, but that could drag the market into becoming a more significant tool for bank treasurers.
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Do not be reassured by the checks and balances narrative. The US presidential election matters desperately. Either the US will be in a position to keep leading the world, or it won’t.
