The European Parliament has voted 394-206, with 49 abstentions, to support the nomination of Christine Lagarde as European Central Bank president. The vote paves the way for EU leaders to endorse her appointment for an eight-year term at a summit in October.
With a new European Parliament in place, the derivatives markets, technology and innovation, cross-border equivalence, sustainability, and financial services are all topics that are expected to top the political agenda during the coming months.
European Central Bank governing council member Francois Villeroy de Galhau believes more efficient eurozone payment mechanisms have a role to play in promoting the euro as a global currency. "A larger use of the euro would help to protect our businesses against foreign exchange risks or legal disputes abroad," he said.
The UK government may delay appointing a new Bank of England governor until after a general election while Mark Carney could be asked to remain in post, reports the Financial Times.
The UK Financial Conduct Authority's Senior Managers and Certification Regime, which soon applies to all firms under FCA authority, has prompted questions from executives and a range of opinions about the regulator's approach to compliance and conduct. Some market participants are worried the regime creates a culture of blame, while others say it benefits the industry.
Leading equities trader Andrew Morgan is to leave his position within Deutsche Bank's so-called capital release unit after just two months. A source familiar with the situation described the unit as a career "suicide mission" given that roles there are unlikely to last beyond three years.
The US Federal Deposit Insurance Corp. has proposed reducing by potentially $40 billion the amount large banks must hold to cover derivatives trades between affiliates. The FDIC has also proposed postponing a requirement that small funds post margin for derivatives trades, in line with a delay to September 2021 from the Basel Committee on Banking Supervision, and letting banks transition to the Secured Overnight Financing Rate without a need to treat trades as new transactions.
Bank of China's Hong Kong subsidiary has become the first financial firm to issue financing in China or Hong Kong benchmarked to the US Secured Overnight Financing Rate. The company has not disclosed the client, the counterparty bank or the size of trades.
International coordination will become more crucial to preserve financial stability as financial technology becomes widespread, Bank for International Settlements General Manager Agustin Carstens says. "In the future, what now looks desirable may become essential," he says.
The Federal Reserve has injected cash into US money markets for the first time in more than 10 years, and the central bank plans to inject an additional $75 billion after short-term interest rates continued to increase. The Fed is intervening because a shortage of cash has sent rates as high as 10%, which could cause turmoil in the broader market.
- Page 1