BIS Progress Report on Basel Framework Implementation

Sunday, May 17, 2015

At the end of April, the Bank for International Settlements (BIS) issued its eighth progress report on the adoption of the Basel regulatory framework.  This report provides a high-level overview of the progress made by Basel Committee member states in adopting the Basel II, Basel 2.5, and Basel III framework as of the end of March 2015.  

Office of Financial Research Seeks Better Securities Lending and Repo Data

Tuesday, April 28, 2015

Prior to the financial crisis, regulators only had limited data available to them about securities lending and repo markets.  The crisis exposed a number of vulnerabilities previously not recognized as a result of this lack of data.  Right away, regulators realized that the only way to understand and effectively address these weaknesses -- leverage and liquidity risks, weak market infrastructure, and fire sale risks — was to obtain more and better regulatory data about securities lending and repo volume, the types and quality of collateral being employed, and how securities lending and repo fit into firms’ risk management processes.  But a recent release by the Office of Financial Research says these data collection efforts are not enough.  According to the OFR, despite the efforts of regulators, significant gaps remain, and "the risk of set fire sales before or after a counterpart default remains largely ...

A Revised Fiduciary Standard Proposal from the DOL

Tuesday, April 14, 2015

On April 14, 2014, the Department of Labor issued its long awaited reproposal of fiduciary standards for advisors of ERISA retirement plans.   These new rules propose to expand the scope of the the definition of fiduciary under ERISA in order to capture more of the current services of 401(k) and IRA providers.  

A Hard Push Against the FSOC's Non-Bank SIFI Designation

Thursday, April 02, 2015

Over the objections many, including asset managers, insurance companies, and even legislators and other regulators, the Financial Stability Oversight Council (FSOC) has pushed ahead with its mandate to identify risks to financial stability that could arise from the material financial distress or failure, or ongoing activities, of nonbank financial companies (Non-bank SIFIs). Thus far, the FSOC has designated four firms as Non-bank SIFIs: On July 8, 2013, the FSOC voted to designate American International Group, Inc. and General Electric Capital Corporation, Inc.; on September 19, 2013, the FSOC voted to designate Prudential Financial, Inc.; and on December 18, 2014, the FSOC voted to designate MetLife, Inc.  MetLife is not taking the FSOC's action lying down, however.  The firm has taken to the courts to challenge its Non-bank SIFI designation. And more influential industry voices are speaking out against not only the ...

Congressional Republicans Want Answers on DOL and SEC Fiduciary Standards

Tempers Flare as Publication of Sweeping New ERISA Fiduciary Proposal Draws Near

Wednesday, March 25, 2015

In a March 4, 2015 letter, two House Republicans requested answers from Department of Labor (DOL) Secretary Thomas E. Perez about the process for devising new fiduciary rules for investment professionals providing services to retirement plans.  Representative John Kline (R-MN), Chairman of the House Committee on Education and the Workforce, and Rep. Phil Roe (R-TN), Chairman of the Subcommittee on Health, Employment, Labor and Pensions, want to know if and how the DOL and the Securities and Exchange Commission (SEC) are working together to minimize potential conflicts, higher costs, and detrimental effects on information available to those saving for retirement.  
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