Study finds that settlement activity is up, but the end is not in yet sight. The financial crisis has given rise to record numbers of law suits. But six years on, are we seeing the end of this litigation frenzy? In an effort to answer this question, Fatan Sabry, Eric Wang, and Joseph Mani of […]
Regulatory and structural reforms to the UK’s system of financial regulation may have created the conditions for a “perfect litigation storm,” according to a May 2013 client memo from law firm Jones Day. The firm’s memo posits that new powers granted to the Financial Conduct Authority (FCA), successor to the Financial Services Authority, coupled with new self-help remedies for investors and consumers, and new ways to finance litigation could prompt a dramatic increase in legal cases brought against UK financial firms.
CSFME’s executive director, Ed Blount, has written a new book review for the ABA Banking Journal. Mr. Blount reviews “China’s Super Bank” by Henry Sanderson and Michael Forsythe, in which the authors present what Blount calls a worthy history of the role of the China Development Bank in less than three decades of urbanization.
It seems that Congress’s preoccupation with the nation’s financial situation has not proved to be a distraction from financial regulatory reform. Judging from committee announcements and recently introduced legislation, both the House and Senate have fairly aggressive agendas in mind for the 113th Congress. Legislation tweaking swaps regulation, ending too-big-to-fail, and changing SEC rulemaking powers have all been introduced, and the House Financial Services Committee has announced a full schedule of legislative priorities and hearings on a wide range of topics.
The first in a series of dates implementing mandatory swaps clearing finally arrived last week. March 11, 2013 marked the date by which swap dealers, major swap participants, and private funds active in the swaps market were required to begin clearing swaps. The March 11 deadline applies to certain index credit default swaps, or CDS, and interest rate swaps that were entered into on or after March 11, 2013.
“[M]ore than anywhere else in the world, the United States remains a place where a visionary can risk everything on a dream or an idea and have a fair chance of fighting for it. And he or she can do so in an environment where the investors who underwrite that dream are protected.” -SEC Chairman, Elisse Walter
The Financial Stability Oversight Council’s recently released 2013 Annual Report revealed that the FSOC will defer to the Securities and Exchange Commission on further reforms for money market mutual funds (MMFs), so long as the SEC moves forward with “meaningful structural reforms.”
The Commodities Futures Trading Commission may have chosen April Fools’ Day to approve an important exemption for inter-affiliate swaps transactions, but exemption is no joke. It provides some much needed relief from a perceived flaw in the new swaps regime under Dodd-Frank. The Dodd-Frank legislation amended the Commodity Exchange Act to require clearing of any and all swaps the CFTC determined should be subject to mandatory clearing, but provided no exemption for transactions between affiliates.
The Senate Banking Committee spent the best part of its Valentine’s Day grilling Fed officials and agency heads about the regulatory implementation of Dodd-Frank. Despite holding the hearings on a day dedicated to romance and love, the Senators certainly did not woo their witnesses with bonbons and soft questioning.
As new regulations under Dodd-Frank move swaps from the OTC swaps marketplace into the futures marketplace, exchanges and swap participants have come up with new products that trade as futures, but provide the benefits of swaps transactions. They have also begun to devise swap products that are custom designed, and therefore ill-suited to exchange trading and clearing, and thus are exempt from the new regulations.