The Basel Committee published the results of its latest Basel III monitoring exercise based on data as of 30 June 2017. The Committee established a rigorous reporting process to regularly review the implications of the Basel III standards for banks, and it has published the results of previous exercises since 2012. The Committee’s finalisation of the Basel III reforms is not yet reflected in the results; the collection of relevant data for those reforms started for the end-2017 reporting date.

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The Financial Conduct Authority (FCA) has fined Guillaume Adolph £180,000 and banned him from performing any function in relation to any regulated financial activity. Mr Adolph formerly worked at Deutsche Bank as a short-term interest rate derivatives trader, trading products referenced to CHF (Swiss Franc) and JPY (Japanese Yen) LIBOR. For a period of time, Mr Adolph acted as the primary JPY LIBOR submitter for Deutsche.

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In recent years, the financial industry has seen fast-growing adoption of financial technology, or fintech. Banks and venture capital funds have made sizeable investments in fintech, reflecting their expectations for substantial change in the industry. Against this backdrop, the Basel Committee on Banking Supervision (BCBS) has set up a task force to provide insight into this development and, more specifically, to explore the implications for banks and bank supervisors.

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The Basel Committee on Banking Supervision has issued for consultation Pillar 3 disclosure requirements – updated framework. Pillar 3 of the Basel framework seeks to promote market discipline through regulatory disclosure requirements. Many of the proposed disclosure requirements published today are related to the finalisation of the Basel III post-crisis regulatory reforms in December 2017.
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Josée Weydert,  Jad  Nader & Vincent Wellens

Luxembourg’s well-known financial secrecy laws are changing. Bill n° 7024 amending inter alia Article 41 of the Financial Sector Act of 5 April 1993 (the “FSA”) in this respect, initially gave rise to much discussion but was ultimately adopted. Barriers to several financial outsourcing transactions will officially disappear and the (IT) outsourcing landscape could undergo substantial changes. This newsflash takes a closer look at some of the most important changes which not only deal with the rules on professional secrecy but also clarify several organisational requirements to be complied with in outsourcing transactions.
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Mr Randal K Quarles, Vice Chairman for Supervision of the Board of Governors of the Federal Reserve System, reflects on 10 Years after the Global Financial Crisis: How Has the World Economy Changed and Where Will It Go? “The U.S. economy appears to be performing very well and, certainly, is in the best shape that it has been in since the crisis and, by many metrics, since well before the crisis. Recent volatility in equity markets is a reminder that asset prices can move rapidly and unexpectedly. However, it is my assessment that the underlying fundamentals of the U.S. economy are sound and much improved relative to earlier in the decade.”

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The European Central Bank (ECB)  has declared  that the Latvian bank ABLV, the second largest bank of the country, can no longer be saved. After ECB blocked all payments at the bank, the ECB decided that it is not in the public interest to further rescue the ABLV, the debts are too large to rescue the bank.

North Korean missile program

Liquidity problems of ABLV are the result of sanctions that were recently imposed by the US Treasury Department. The USA believes the bank has done business with parties that support the North Korean missile program and that the bank has laundered money.

Savings are guaranteed

The central bank of Latvia claimed that ABLV had sufficient buffer capital to save it, but according to the ECB, that is not the case. Savings of up to € 100,000 are guaranteed via the deposit guarantee scheme. Latvian Prime Minister Kuinskis will convene an emergency meeting about the risks at other Latvian banks.

Domestically, the Bank co-operates closely with both the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) in relation to supervising market infrastructure and payment systems respectively. The frameworks for co-operation are set out in Memorandums of Understanding (MoUs) which are reviewed annually by the parties involved, including by seeking feedback from supervised Financial Market Infrastructures (FMIs). Co-operation supports effective supervision and policymaking by sharing information between the regulators and promotes efficiency by minimising duplication.
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The Financial Conduct Authority (FCA) has announced that it is seeking views on how technology can make it easier for firms to meet their regulatory reporting requirements and improve the quality of the information they provide. The FCA regularly explores how technology can make our regulations more efficient and reduce the regulatory burden on firms. One of the ways we do this is through ‘TechSprints’ that bring together financial services providers, technology companies and subject matter experts to develop solutions to regulatory challenges.
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