Europe’s finance ministers agree draft text to establish three supervisory Authorities. But unhappy lawmakers may unpick it By Melvyn Westlake

Heterodox report on regulatory reform rejects conventional views on the causes of the boom-bust cycle, and their remedy By Melvyn Westlake

WASHINGTON – The world’s major financial services firms are making profound and far reaching reforms to improve their resilience and restore public confidence, according to a report prepared by the industry’s leading representative body. Considerable progress is being made in important areas, such as strengthening risk management, improving liquidity management, and reforming pay systems, claims the report,* issued in early December. It has been prepared by a key committee – the Steering Committee on Implementation (SCI) – of the Washington-based Institute of International Finance (IIF), which represents some 370 global finance firms.

BRUSSELS – The Swedish attempt to broker a compromise deal over the EU’s controversial Alternative Investment Fund Management (AIFM) Directive before the year-end has been abandoned. It will now be up to the Spanish, who take over the rotating six-monthly presidency of the EU Council from the Swedes on January 1, to find a way of bridging the rifts that have emerged over the Directive. It aims to regulate a range of asset managers, including hedge funds, private equity funds, real estate funds and commodity funds.

GENEVA, Switzerland, December 9 (Global Risk Regulator) – As global banking supervisors meet to decide the details of a post-crisis regulatory framework, one top regulator indicated the costs of the “tsunami” wave of new regulation heading the banking industry’s way are acceptable, at least to regulators.

BASEL, Switzerland, November 30 (Global Risk Regulator) – Regulators spearheading the international response to the financial crisis say they do not have a “systemic risk list”, a list of systemically important financial institutions that they have drawn up.

Senate's radical new reform proposals would cut Fed's powers but supporters and some other regulators will resist the move By Nick Paraskeva

Mandatory convertible bonds could help reduce bank failures. But trail-blazer issue raises questions. Where should ‘triggers’ be pitched? By Melvyn Westlake A new form of regulatory capital for banks, which has been the subject of intensifying interest among regulators on both sides of the Atlantic, suddenly became a market reality in early November with the trail-blazing launch of so-called contingent convertible bonds by a major British bank. Such instruments – bonds that convert into equity if a bank runs into financial trouble and some pre-determined trigger is hit – form part of the huge £22.5 billion ($38bn) capital raising and bond exchange deal launched by the part state-owned Lloyds Banking Group.

New Berlin government plans to dismantle BaFin, the financial supervisory agency. Opponents call it political revenge By Klaus Engelen

There is no consensus on reducing footprint of systemically-important banks. Bankers will resist most proposals By Melvyn Westlake