BIS investigates the role of firms’ credit risk in the onshore transmission of international bond market conditions. They show that reductions in the global price of risk, measured by the excess bond premium, encourage more international bond borrowing by smaller and younger firms. Due to informational asymmetries, these firms pay a higher credit spread. Thus their funding costs, and consequently their international borrowing, are more tightly linked to the global price of risk.

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The Basel Committee on Banking Supervision published Frameworks for early supervisory intervention, which presents a range-of-practice study on how supervisors around the world have adopted frameworks, processes, and tools to support early supervisory intervention. Since the global financial crisis, supervisory authorities have increasingly focused their attention on how early supervisory intervention can promote financial stability by reducing the probability and impact of a bank failure. There is also a common recognition that for supervision to operate effectively, identification and intervention at an early stage are critical to prevent problems from escalating or becoming acute.
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The European Banking Authority (EBA) launched today a public consultation to propose extending the scope of application of the existing Joint Committee (JC) Guidelines on complaints-handling to the new institutions established under the revised Payment Service Directive (PSD2) and the Mortgage Credit Directive (MCD). The proposal, which does not envisage any changes to the substance of the existing Guidelines, will ensure that an identical set of requirements for complaints-handling continues to apply to all financial institutions across the banking, investment and insurance sectors. The extension of the scope will provide consumers with the same level of protection, irrespective of which regulated product or service they are purchasing and which regulated institution they are purchasing it from. The consultation runs until 27 May 2018.
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The Financial Conduct Authority (FCA) has published new rules on pension transfer advice and is seeking views on additional changes, including adviser charging structures. The new rules and areas for discussion aim to improve the quality of pension transfer advice to help consumers make informed decisions for their individual circumstances.

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The SFO is set to recover millions lost in a corruption case which saw Griffiths Energy bribe Chadian diplomats in the United States and Canada. Securing exclusive contracts with corrupt deals, Griffiths Energy bribed Chadian diplomats with discounted shares deals and ‘consultancy fees’ using a front company ‘Chad Oil’ – which was set up just five days before agreements were signed. ‘Chad Oil’ was a vehicle used by senior diplomats at the Chadian Embassy to the United States to facilitate a deal which saw the wife of the former Deputy Chief, Mrs Ikram Saleh purchase 800,000 shares at less than 0.001$CAD each, later selling them for significant profit.
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In his speech, Fernando Restoy*, Chairman, Financial Stability Institute, Bank for International Settlements, talks about the debates and negotation that takes place of completing the banking union. He talks about the challanges BIS faces with the implementation challanges, the availability of bail-in powers as a fundamental and innovative component of the Key Attributes and the MREL requirements.

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The Basel Committee on Banking Supervision on Friday published an outline of discussions at its meeting on 15–16 March 2018 in Basel and announced it will publish summaries of each meeting in future. “The Basel Committee is committed to transparency and accountability in its role as the global standard setter for the prudential regulation of banks,” said Stefan Ingves, Chairman of the Basel Committee and Governor of Sveriges Riksbank.

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In January 2016, the Basel Committee on Banking Supervision published the standard Minimum capital requirements for market risk (hereafter “January 2016 standard”). This new market risk standard was developed to address a number of structural shortcomings in the Basel II market risk framework (and its subsequent revisions), and served as a key component of the Basel Committee’s reform of global regulatory standards in response to the global financial crisis.

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In his keynote speech, Klaas Knot outlines how the issue of ‘sustainability’ got on the DNB agenda, highlighting how and why sustainability is relevant for central banks, supervisors and the financial industry. Secondly, he gives an overview of the climate-risks in the Dutch financial sector. Third and finally, he sketches what this means for bank risk management and supervision.

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In his speech Christopher Woolard, FCA Executive Director of Strategy and Competition: “There’s a danger, when you’re up to your neck in policy proposals, economic analysis and focus group findings, that you could forget that regulation of the credit sector is not a cold academic exercise. Those of us engaged with this issue know the truth: that for millions of people credit is woven through the fabric of everyday life. In Glasgow 41% of adults have outstanding, non-mortgage debt, with 11% of adults in particularly high-cost credit debt.”

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