New rule may give pan-EU body final say on which derivatives must be cleared centrally. Lawmakers push tougher approach

BASEL – Bankers have been granted a year’s delay in the deadline for implementing the tough new capital rules for their trading activities. There will also be a slight relaxation in the application of capital charges on certain securitisation positions during a two-year transition period beyond the new implementation deadline.

BRUSSELS – Beleaguered credit rating agencies (CRAs) discovered a good deal more in early June about how the tough new EU regulatory regime for their industry is going to operate. They could in future be subject to fines for serious breaches of the new rules, face a temporary ban on issuing ratings, and ultimately have their registration withdrawn, effectively preventing them from operating in Europe.

BASEL – Effective supervision and regulation could mitigate the possibility of insurers, such as life insurers, amplifying risks to the financial system as a whole, according to the world’s insurance supervisors.

LONDON – European supervisors are finalising the latest stress tests of major EU banks, which policymakers are hoping will allay market concerns about the solvency of the bloc’s financial institutions and put an end to destablising speculation. The London-based Committee of European Banking Supervisors (CEBS), the body that advises the European Commission on banking regulation, and currently coordinating the stress test exercise, confirmed in a mid-June statement that it is liaising with national authorities in preparation for publication of the results.

LONDON – Creating Britain’s new “twin peaks” system of financial regulation, which will see the splitting up of the Financial Services Authority (FSA) and is expected to be completed in 2012, will put enormous strain on the financial sector, according to analysts.

MADRID – Financial regulators must recognise the risks of relying too heavily on macroprudential policies, particularly given the current state of knowledge, a top global banking supervisor warned in June.

SYDNEY – Australia’s so-called twin peaks regulatory model gives the Australian Prudential Regulation Authority (APRA), the country’s prudential regulator, a single and clear mandate to focus on promoting sound prudential behaviour on the part of financial institutions, a top APRA official said in May.

One top accountant hopes the findings of a new survey of investment professionals on the vexed question of fair value accounting will promote “a more nuanced, less polarised, debate” about the merits of the controversial approach.

BRUSSELS – Under pressure from France and Germany to take action to restrict or ban some forms of “short selling” in the financial markets, the European Commission set out proposals in mid-June, aimed at harmonising EU rules for dealing with this activity in emergency situations. Countries reacted differently and took a variety of different measures to curb short selling during the financial crisis and, more recently, when the European government bond markets experienced substantial volatility.