Commentary
Journal Commentaries
Keep Regulation Functional (October 2008)
CSFME’s Executive Director Ed Blount interviews SEC Chairman Chris Cox.
American Banking Association Banking Journal
https://www.questia.com/library/journal/1G1-187494664/keep-functional-regulation-how-financial-regulation
The Bear Market Posse, or Counterparty Risk Management during the Recent Turmoil (Sept. 2008)
by Ed Blount
The RMA Journal, v91n1, 28-32, 5 pages Sep 2008.
Searching for New Paradigms at BIS (July 2008)
by Ed Blount
Unexpected deficiencies in bank capital after recent market turmoil has regulators rethinking aspects of Basel II and “value at risk.”
American Banking Association Banking Journal
https://www.questia.com/library/journal/1G1-181991450/searching-for-new-paradigms-at-bis-market-turmoil
Will Basel II Affect The Competitive Landscape? (September 2003)
By Ed Blount
Newly elected Basel Committee Chairman Caruana, Governor of the Bank of Spain, gives his views on the revised Basel capital accord, relative to its potential effects on competition and risk management in banking markets.
American Banking Association Banking Journal
https://www.questia.com/read/1G1-108008773/will-basel-ii-affect-the-competitive-landscape-the
CSFME Commentaries
U.S. Stock Loan “Ticker”: A Gift to Beneficial Owners?
SEC’s New Disclosure Regime to Fix “Information Assymetry” Make no mistake. The new 10c-1 disclosure proposal by the SEC is an Investor Protection Rule on steroids. It is also a profound escalation of regulatory support for Investor Self-Protection. Nothing less than a near real-time, stock loan ticker will result if enacted, revealing U.S. loan rates […]
New Trends in Data Ownership
Certain challenges in securities finance can only be met with better data and newer data models. Market regulators now coping with investor demands for ESG-compliance will have to monitor the disclosures of regulated entities by combing through vast pools of stock loan and proxy voting data. Bank custodians and brokers, if tasked with validating the social propriety of their stock loans, will have to dive deep into customer profile data, deeper than either regulators or vendors can today access efficiently.
Assembling the Market Posse
We’ve all been there, having drinks after work with an important client visiting from overseas. My most memorable time was at the very beginning of my career on Wall Street. The client was a trader from the South African branch of Jos. Sebag & Co., a London firm more than 100 years old when he and I met in 1975 at the upscale bar, Michael II. The firm and the restaurant have long since vanished, but at the time Sebag was the most active account for First National City Bank’s (FNCB) American Depositary Receipt (ADR) business. The firm was far more active than Merrill Lynch, Goldman Sachs, or any other cross-border trading outfit. Most of the trades were for the issuance of ADRs in South African mining stocks, such as Anglo-American Gold.
Exposing the Rogue Traders
Master Criminals don’t usually confess in public. If prosecutors’ charges are true, Sanjay Shah is the leading figure in the largest reported tax swindle in history. Yet, Mr. Shah, unbowed, pleading his case to reporters, has openly admitted to borrowing the assets of widows and orphans in one country to kick-start a pyramid scheme of dividend capture trades, so as to swindle widows and orphans in other countries.
Unweaving a Tangled Web
The German Federal Court of Justice’s decision two weeks ago to prosecute as criminals anyone who abused dividend arbitrage trades anytime over the previous 25 years is bad news for everyone in the securities lending community. The German tax authorities’ new determination to conduct sweeps of securities loans that span dividend record dates should in particular sound the alarm for institutional securities lenders, especially if it presages a new trend among regulators.
RESTORING TRUST IN MARKETS: RMA Podcast Series
Creating ESG Models to Change Negative Views of Financial Markets Good morning, this is Ed Blount and I am speaking to you from the Center for the Study of Financial Market Evolution here in Washington, D.C. I’ve been asked by my good friends at the Risk Management Association, RMA, just up the road in Philadelphia, […]
Apple Sauce or Orange Juice?
Databases designed for specific purposes often fail when asked to solve a different problem. As an example, the securities finance databases of leading data providers such as FIS Astec, Datalend, and IHS Markit, designed more than 20 years ago for performance benchmarking, are inadequate when queried for the purpose of the loans themselves. Even regulatory databases enriched with new SFTR filings can only help supervisors monitor leverage based on end-of-day positions, and are unable to determine the propriety of the loans without mapped flow data.
Get Your ESG House in Order
Environmental, social, and governance (ESG) investing has taken global financial markets by storm over the last few years. Post-pandemic, the demand for ESG investments has only intensified and has proven to be much more durable than a fad. However, lack of consistency and transparency threatens the trustworthiness of ESG as a category, and has led to accusations of ‘greenwashing.’
Live by the Sword. Die by the Sword. Part 1
January’s GameStop frenzy, where amateur online retail traders took what they hoped would be a rollicking joyride through the world of high finance, has left regulators scratching their heads about what to do next and the retail buccaneers themselves with quite a hangover.
Fund Advisers Brace for ESG Scrutiny
After nearly twenty years of study, the Securities and Exchange Commission seems poised to rewrite the rules on proxy disclosure for mutual funds. Two SEC commissioners predicted within days of each other that there will be radical revisions to how regulated investment companies will report their proxy voting behavior. Both Acting Chair Allison Herren Lee and Commissioner Caroline Crenshaw said in separate speeches last month that the SEC’s current proxy reporting form is not meeting the needs of investors.