The Super-Regulator in Europe

The European Central Bank (ECB) is preparing to take on new banking supervision tasks as part of a single supervisory mechanism (SSM). In a joint work with national regulators the ECB seek to ensure the safety and soundness of the European banking system and to increase financial integration and stability in Europe. It is expected that the ECB will assume its new banking supervision responsibilities in autumn 2014.

Last 7th february the ECB launched a public consultation on draft ECB SSM Framework Regulation. Available here

The Report on the proposal for a Council regulation conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (COM(2012)0511 – C7-0314/2012 – 2012/0242(CNS)) can be consulted here.

Some recent news about the first expected measures to be taken by the new regulator: FT

Impacto de la Regulación Privada Transnacional Unidad Latinoamericana. Tercera Reunión Anual. Universidad Externado de Colombia

Impacto de la Regulación Privada Transnacional Unidad Latinoamericana. Tercera Reunión Anual. Universidad Externado de Colombia- Agosto 15 de 2013.

El programa en el siguiente enlace

https://www.dropbox.com/sh/gxyt81dkz3hzio5/fo5afHKaya/Impacto%20de%20la%20Regulaci%C3%B3n%20Privada%20Transnacional%20%20III%2006082013.pdf

OTC Derivatives: Central Counterparties CCPs and its loss-allocation rules

The implementation of post-trading market infrastructure is the leading policy in the OTC Derivatives Market reform. In particular the introduction of Central Counterparties (CCPs) as intermediaries in every OTC derivatives transaction. 

Although there are some expected benefits in terms of greater transparency and better risk management, the major concern is how to regulate the CCP's insolvency. Therefore, effective loss-allocation rules are fundamental to ensure the success of the new post-trading infrastructure. 

Two illustrative documents discussing the topic:

Bank of England Paper on Central Counterparty Loss-allocation Rules

Financial Times Article

LEI - Legal Entity Identifier

The  LEI - Legal Entity Identifier is a new tool to identify legal entities involved in financial transactions. Arguably, it will provide major benefits to international financial market and regulators in terms of information reporting and risk management.

http://www.treasury.gov/initiatives/ofr/data/Documents/LEI%20Primer_June2013_FINAL.pdf

Triumph of Wall Street?

Lack of independence of regulators has been largely recognised as a factor of inefficient financial regulation. The new rules on transparency of derivatives market -recently issued by the CFTC- do not seem to pose a different  debate. The level of complicity and complaisance between dominant market actors and national regulators, continues determining the content and enforceability of the new regulation.

http://www.nytimes.com/2013/05/20/opinion/derivatives-reform-on-the-ropes.html?_r=0

Internationally driven regulation is harming national derivatives markets

Asian markets are not particularly optimistic with the new system of international rules being implemented on financial derivatives markets. The main concern lies on the applicability of the new clearing and reporting regulations for cross-border transactions. The lack of consistency and what is worse, the conflicting rules would adversely affect the OTC derivatives market itself.

More information available on
http://www.ft.com/cms/s/0/6b6d30b8-b0a9-11e2-9f24-00144feabdc0.html#axzz2S2GVOmgK

The Securities and Exchange Commission with extraterritorial powers?

As broadly known the regulatory powers within US financial market are carried on by the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission. Hence, the regulation implementing the Dodd-Frank Act should be issued by the SEC and the CFTC, in attention to the subject matter. The challenges prompted by financial derivatives regulation are showing, however, a slight turn of those attributions in practice. Tomorrow, the SEC will discuss rules for OTC derivatives to be applicable to cross-border transactions. The CFTC has already manifested disagreement as well as some European regulators. One could ask: are we attending a case of extraterritorial regulation issued by national regulator?

More information can be found
http://www.reuters.com/article/2013/04/26/sec-swaps-crossborder-idUSL2N0DD2WF20130426