Treasury Secretary Steven Mnuchin intends to make public a review of the Financial Stability Oversight Council. The review could lead to a reduction in orderly liquidity authority, which lets regulators step in and liquidate a systemically important bank.
President Donald Trump will meet with Federal Reserve head Janet Yellen on Thursday at the White House, sources said. Trump has not said whom he'll appoint to lead the central bank at the end of Yellen's term, but he has said he will consider reappointing her.
The People's Bank of China is stepping up its oversight of banks, shadow banks and other financial institutions that offer services that they aren't set up properly to provide, said central bank Governor Zhou Xiaochuan. Some big firms have obtained financial-services licences by purchasing other companies and that may have led to "connected transactions and other illegal behaviour during the process", he said.
Bond markets took a cue from Federal Reserve chief Janet Yellen's speech at the Group of 30's annual International Banking Seminar, prompting a surge in global sovereign bonds and a decline in US Treasurys. Yellen reiterated the Fed's commitment to raising interest rates on pace with US economic growth, despite lagging inflation.
CME Clearing, ICE Clear US and LCH have passed a stress test to show they can generate enough liquidity to weather a major market disruption, according to the Commodity Futures Trading Commission. The test posed an extreme but plausible scenario in which two major clearinghouse members defaulted.
The Bank of England said it will take over end-to-end administration of the Sterling Overnight Index Average, replacing the London Interbank Offered Rate, in April. The central bank will use its Sterling Money Market Data Collection to calculate Sonia rather than using submissions from financial institutions.
Surging demand in the corporate credit market is prompting investment banks to issue innovative derivatives products such as total return swaps, involving increasingly complex bond combinations.
The Bank of England is widely expected to raise interest rates in November for the first time in more than 10 years, from its current record low of 0.25%. Opinions differ on the pace of future rises, with many economists saying November's announcement will not be followed by further hikes in the near term, while market traders are reportedly pricing in a second rise before August 2018.
Activist hedge fund RBR Capital Advisors is reportedly planning a bid to break Credit Suisse Group into three parts, capitalising on investor frustration with its dwindling share price.
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