Four leaders -- British Prime Minister Theresa May, French President Emmanuel Macron, Italian Premier Paolo Gentiloni and US President Donald Trump -- are making their debut at the Group of Seven summit amid significant change in national positions. G-7 leaders were once in broad agreement, but they are expected this year to seek common ground and to strive for trust among themselves as they discuss issues related to the economy, trade, climate change and security.
Despite political fears over the euro's future, the currency has emerged as one of the top-performing in the Group of 10 nations this year. Foreign investors are buying into eurozone funds and regional economic growth has exceeded expectations.
Buy-side executives said that forcing clearing of euro-denominated contracts into the EU from London would drive up costs for trading euro-denominated interest-rate swaps.
Investors were disappointed by the extension of oil production curbs from OPEC and other producing nations, causing prices to fall 5% Thursday. "Today the bottom evaporated from the market," said Robert Yawger of Mizuho Americas.
A number of market risk experts at global banks say the Fundamental Review of the Trading Book's requirements could cause fragmentation, as separate trading desks may need to be opened in every country where they operate. Under the current structure, a network of offices can report to a central line manager, but national regulators may prohibit this, which would cause particular problems for banks with a significant presence across numerous Asian territories.
The Basel Committee on Banking Supervision will set an aggregate floor on banks' internal regulatory capital models, instead of individual floors for certain risks, Secretary-General William Coen told a conference. This decision aims to allow banks more flexibility in modelling risks for each portfolio, although the final floor calibration has yet to be agreed upon and may be a source of contention.
A European Commission proposal to simplify reporting on exchange-traded derivatives under the European Markets Infrastructure Regulation has not been sufficiently explained, some market participants say. In its recent EMIR review, the commission said the current dual-sided reporting status will be changed so only central clearing counterparties need to report ETD trades, but this gives rise to a number of questions and grey areas, they contend.
The European Central Bank will soon be faced with a difficult balancing act, writes Ambrose Evans-Pritchard. Its current policy of covering Italy's budget deficit and rolling over its public debt is at odds with its need to dampen the German economy, which is showing signs of overheating.
The UK's Financial Conduct Authority and Hong Kong's Securities and Futures Commission have launched a partnership to encourage financial-services innovations. The agreement will also foster information exchange, experience sharing and a regulatory referral system.
Stock markets were mixed Friday in Asia-Pacific as weaker oil prices put pressure on energy companies' shares. Japan's Nikkei 225 fell 0.6%; China's Shanghai Composite was up 2.3%; Hong Kong's Hang Seng Index was flat; Australia's S&P/ASX 200 dropped 0.7%; South Korea's Kospi rose 0.5%; and India's Sensex climbed 0.9%.
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