Sunday, May 21, 2017

CFTC Chair Highlights Effect of Regulation on Liquidity

Urges Regulatory Recalibration and More Comity

Author: David Schwartz J.D. CPA

In a May 10, 2017 address, acting Chairman of the Commodity Futures Trading Commission (CFTC)  J. Christopher Giancarlo highlighted some unintended consequences regulation is having on the swaps markets. In his speech before the International Swaps and Derivatives Association 32nd Annual Meeting in Lisbon, Portugal Giancarlo talked about the changes to swaps trading liquidity, market fragmentation and regulatory comity in the post-reform global swaps markets. After providing an overview of how some aspects of the misapplication and miscalibration of regulatory reforms were harming global liquidity, he provided some astute observations on how to alleviate some of the harm being done to swaps markets in particular. 

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Tuesday, May 16, 2017

Fed General Counsel Addresses the New Compliance Landscape

Compliance is More Important than Ever, but Approach May Be Too “Rules Based”

Author: David Schwartz J.D. CPA

In a May 9th Address, Michael Held, Executive Vice President and General Counsel of the Federal Reserve Bank of New York, gave his thoughts on the new compliance landscape. Held told his audience at SIFMA’s Compliance and Legal Society Monthly Luncheon that in recent years the role of compliance within supervised financial institutions has grown dramatically in size, scope, and relevance. He also said that since the financial crisis, risk and compliance functions have grown in respect and stature across the financial services industry. Despite this new stature, however, those charged with monitoring compliance at financial institutions face an environment that has become perhaps “too rules-based.” Held offered his thoughts on firms and compliance personnel can meet these new challenges.

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Sunday, May 7, 2017

CFTC Seeks Input on Simplifying Regulations

Author: David Schwartz J.D. CPA

In a speech before the US Chamber of Commerce’s 11th Annual Capital Market Summit, the CFTC’s acting Chairman J. Christopher Giancarlo announced a new project to simplify the agency’s regulations. Remarking that, "America’s derivatives markets are struggling, in some cases, under the weight of flawed and excessive regulation,” Chairman Giancarlo introduced the CFTC’s new focus on reinterpreting its regulatory mission consistent with the goals of the Trump Administration’s Executive Order on regulation. To achieve these goals, the CFTC will be seeking input from industry on where existing CFTC regulations can be simplified and made less costly.

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Tuesday, May 2, 2017

Basel Sharpens Focus on Banking Supervision

Will also improve confidence in prudential ratios

Author: David Schwartz J.D. CPA

The Basel Committee on Banking Supervision has announced its work program themes for 2017 and 2018 to include a greater focus on strengthening supervision by member jurisdictions. In addition, the Committee still remains dedicated to its core goals of:

 

  • finalizing its existing policy initiatives; 
  • monitoring emerging risks;
  • assessing the effects of the Committee's post-crisis reforms; and 
  • ensuring full, timely, and consistent implementation of the Committee's standards.
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Sunday, April 23, 2017

Are Bank Regulations Harming Small Businesses?

Fed Survey Finds Small Businesses Face Credit Challenges

Author: David Schwartz J.D. CPA

A Federal Reserve Report published on April 18, 2017 found that U.S. small businesses are facing hurdles in obtaining much-needed financing for growth. The study indicated that small businesses presently face significantly more stringent credit conditions when approaching their traditional sources of loans for equipment and expansion. The Fed report itself does not point the finger at regulation as the cause for this restriction in the ability of small businesses to access credit. However, large banks have had to tighten credit conditions significantly as a result of increased capital requirements, liquidity restrictions, and stress tests. Because these big banks are the primary source of the for all business financing in the U.S., and the number one source of loans to small businesses, any restrictions on the flow of financing arising out of new banking regulation will perforce affect small businesses. 

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