MWU / School for Political Science, Public Policy & Geopolitics: Fw: Draghi offers views on securitisation revival

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From: "GFMA SmartBrief" <gfma@smartbrief.com>

Date: Thu, 29 May 2014 04:17:12 -0500

To: <mainandwall@hotmail.com>

Subject: Draghi offers views on securitisation revival

ECB: Yield search risks destabilising recovery | Expectations of ECB move dampen government-bond market | Studies: Investors take hit from HFT on exchanges

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29 May 2014

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ECB: Yield search risks destabilising recovery
The European Central Bank has warned that the eurozone is at risk of financial instability because of investors' desire for higher returns. Although capital from emerging markets has been flowing into the eurozone, "such flows might prove to be fickle, absent prospects of strong absolute returns differentiated by underlying country and bank-specific macroeconomic prospects", according to the ECB. It's the duty of sovereigns to boost growth prudently and to keep public finances sound, the bank says. Bloomberg (28 May.)

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Industry News

Expectations of ECB move dampen government-bond market
Forecasts that the European Central Bank will announce stimulus next week are keeping a lid on eurozone government-bond yields. Stimulus could include cuts in deposit rates and measures to encourage small-business lending. Reuters (28 May.)

Studies: Investors take hit from HFT on exchanges
Investors are paying a price for growth of high-frequency trading on exchanges, according to two academic studies. Increased competition among HFT companies is causing traders to widen buy-sell spreads, raising investors' costs, the studies show. Bloomberg (28 May.)

Data indicate weak growth in eurozone
Leading eurozone indicators show that the economy remains sluggish, with little expectation of growth being any better this quarter than in Q1. Bank lending to companies continued to slump in April, declining by €7 billion, according to the European Central Bank. Growth in the money supply also slowed. The Wall Street Journal (tiered subscription model) (28 May.)

Tribunal upholds market-abuse ruling against star banker
The Financial Conduct Authority says a London tribunal has upheld a regulatory ruling that Ian Hannam, formerly a top banker at JPMorgan Chase, had engaged in market abuse. Hannam had appealed the ruling by the FCA's predecessor, the Financial Services Authority, that he improperly disclosed inside information. Reuters (28 May.), The Independent (London) (tiered subscription model) (28 May.), The Telegraph (London) (tiered subscription model) (28 May.), The New York Times (tiered subscription model)/DealBook blog (28 May.)

Analysis: Investors drive up LSE stock amid Russell talks
London Stock Exchange Group's share price has risen during the past six days, after the bourse operator entered exclusive discussions to acquire Russell Investments for an estimated $2.4 billion. Financial Times (tiered subscription model) (28 May.)

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Regulatory Roundup

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Draghi offers views on securitisation revival
Mario Draghi, president of the European Central Bank, spoke at a forum on central banking about how to revive the securitisation market in the eurozone. Financial Times (tiered subscription model)/Money Supply blog (27 May.)

MiFID II discussion papers raise implementation questions
The financial industry has until 1 August to review and comment on two discussion papers published by the European Securities and Markets Authority on the revised Markets in Financial Instruments Directive. The papers raise practical questions on implementation that must be addressed, industry leaders say. The Trade News (U.K.) (tiered subscription model) (28 May.)

Next EMIR trade-reporting deadline expected to be challenging
In February, market participants faced the first trade-reporting deadline under the European Market Infrastructure Regulation. The transition was not smooth, and more operational challenges and uncertainty are expected as the next such deadline approaches. DerivSource (28 May.)

Germany's Schaeuble: Rates likely to increase in medium term
Reuters (28 May.)
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Chinese exchange eyes options for stock-index futures
The China Financial Futures Exchange is close to introducing options trading for stock-index futures, Chairman Zhang Shenfeng says. The derivatives product will give investors another tool to hedge risk and fill a void in Chinese options trading, Zhang says. The launch requires regulatory approval. China Daily (Beijing) (28 May.)

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AFME News

Global ABS 2014 -- 10 to 12 June in Barcelona, Spain
AFME and the Information Management Network present Global ABS 2014, scheduled 10 to 12 June in Barcelona, Spain. Register to engage with the regulatory community, participate in key policy and client-networking discussions, and focus on ways to rebuild the European securitisation market for sound growth and performance. Speakers include Yves Mersch of the European Central Bank and Adam Farkas, executive director of the European Banking Authority. View more information about Global ABS 2014.