Les relations se tendent encore entre l'UE et la Hongrie

L'Europe plombera la croissance mondiale en 2012, selon le FMI

Les propositions de Paris et Berlin pour relancer la croissance

Le programme des institutions européennes en 2012

La réforme européenne des services publics crée des attentes

Morning Bell

Obama outlines plan to collect fees from banks to help refis
In his State of the Union address, President Barack Obama announced a plan to levy fees on major banks to help spur mortgage refinancing for struggling homeowners. "A small fee on the largest financial institutions will ensure that" a mortgage-refinancing plan "won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust," the president said. Bloomberg Businessweek(1/25), American Banker (subscription required)(1/24)

Industry News

Banks face regulatory changes and bleak economic outlook
Banks must deal with an onslaught of regulations and a dismal economic outlook. The situation is leading financial institutions to shrink. Financial Times(tiered subscription model)(1/24)

Fitch to disclose grading model for mortgage bonds
Fitch Ratings said it will reveal its grading model for home-loan bonds despite concerns that doing so might allow issuers to exploit vulnerabilities in the system. Meanwhile, Shellpoint Partners co-CEO Saul Sanders said the rating agencies hinder the private mortgage-bond market. Bloomberg(1/24)

Citigroup might further cut spending in securities unit
John Gerspach, chief financial officer at Citigroup, said the company will consider further spending cuts in its Securities and Banking division if revenue doesn't rebound this year. "We are not oblivious to the fact that our cost structure cannot be justified by our current revenue," Gerspach said. "While much of the current difficulty reflects market conditions, we equally have some management and execution challenges." Bloomberg(1/24)

BofA reportedly notifies investment bankers about pay cuts
Bank of America has pay discussions with investment bankers scheduled this week, but executives have already told the firm's investment bankers that their compensation packages will be about 25% less than last year, sources said. "Until things really come back, no one should be expecting compensation like they got in the past," said Jeanne Branthover, a managing director at Boyden Global Executive Search. "There are going to be very strong people who will not be compensated as they expected, and they will keep their ears open to move for more money." Bloomberg(1/24)

Morning Bell

EU ministers strike deal on rules for OTC derivatives clearing
EU finance ministers reached an agreement regarding clearinghouses that deal with over-the-counter derivatives. The officials determined when national decisions to authorise clearinghouses can be overridden by a regional watchdog. "Now we have a delicate compromise, but the fine thing is that we all agree on it," said Margrethe Vestager, Denmark's economy minister. Bloomberg Businessweek(24 Jan.), Reuters(24 Jan.), Financial Times(tiered subscription model)(24 Jan.)

Industry News

Greek creditors seek deal as chaotic default looms
Greek bondholders are striving to draft an agreement after European finance ministers rejected a proposed bond swap between Greece and private creditors. "It's important that all parties recognise how much we have at stake and work together and cooperate to find a solution," said Charles Dallara of the International Institute of Finance, which is representing private bondholders. Reuters(24 Jan.), The Wall Street Journal(25 Jan.)

ECB and dealers discuss buying inflation-linked bonds
The European Central Bank and a group of dealers are discussing the idea of purchasing government inflation-linked bonds, sources said. AFME had organised an initial call last week between the central bank and dealers, but it was delayed because of a technical glitch. "The essence of last Friday's call was to address concerns and the problems surrounding liquidity in market-making euro-zone linkers," one banker said. "It was something we as primary dealers were requesting more than the ECB, but it was happy to hear the feedback." Risk.net (subscription required)(24 Jan.)

European banks and regulators are at odds over capital reserves
European regulators want financial institutions to reduce staff bonuses and tap shareholders to increase capital reserves. Banks, however, would rather write down or sell unprofitable businesses and make balance-sheet adjustments to meet capital requirements. The New York Times (tiered subscription model)/DealBook blog(24 Jan.)

NEW YORK, January 11, 2012 – The InternationalSwaps and Derivatives Association, Inc. (ISDA) announced today the membershipand charter of the Industry Clearing Committee (ICC).

The ICC, which consists of a broad cross-sectionof over-the-counter (OTC) derivatives industry market participants, wasformed by ISDA in June 2011 to meet current and emerging industry needsin respect of clearing.  More specifically, the ICC will assist incoordinating industry efforts to reach optimal levels of central counterpartyclearing and to address obstacles in achieving those levels
(...)
http://www2.isda.org/news/isda-announces-membership-and-mission-of-the-industry-clearing-committee

Bruxelles, 18/01/2012 (Agence Europe)- La France et l'Allemagne veulent accélérer les discussions en Europeen matière de coordination fiscale, malgré les résistances de l'Irlandenotamment, et feront bientôt des propositions sur leur impôt harmonisésur les sociétés. Paris et Berlin avaient annoncé en août vouloir parvenircourant 2013 à un impôt sur les sociétés commun aux deux pays, dont lestaux et l'assiette seraient ainsi harmonisés.

Stress-testing macro stress testing:does it live up to expectations?
by Claudio Borio, Mathias Drehmann andKostas Tsatsaronis
 
Working Papers No 369
January 2012

Abstract:

 We critically review the stateof the art in macro stress testing, assessing its strengths and weaknesses.We argue that, given current technology, macro stress tests are ill-suitedas early warning devices, ie as tools for identifying vulnerabilities duringseemingly tranquil times and for triggering remedial action. By contrast,as long as properly designed, stress tests can be quite effective as crisismanagement and resolution tools. We also see additional side benefits,stemming largely from the way such tests can discipline thinking aboutfinancial stability. We suggest possible ways to improve their performance.
http://www.bis.org/publ/work369.htm

Morning Bell

• Germany considers different approach to transaction tax
  Germany is considering supporting a UK-style stamp duty on share purchases across the EU as a way of luring UK Prime Minister David Cameron back on Europe's side, said German Economy Minister Philipp Roesler. "We should think about a possible way to get the UK on board. The British already have a special form of a stock exchange turnover tax, the so-called stamp tax," Roesler said. "If the British aren't willing to get closer to the European model of a financial-transaction tax, it would make sense to talk together with the British and other European states about the British model." Bloomberg(19 Jan.), Nasdaq.com/Dow Jones Newswires(19 Jan.)

Industry News

• Talks continue toward deal to restructure Greece's debt
  Greek officials continued negotiations with the Institute of International Finance, which is representing private bondholders, about restructuring the country's debt. The talks, which centre on slashing the value of Greek bonds, continue today. CNNMoney.com(19 Jan.), Reuters(19 Jan.)

• European banks might reject state funds in capital plans
  European banks have until the end of today to notify regulators about plans to meet capital requirements to help them withstand the sovereign-debt crisis. Lenders' plans might include rejecting state cash, instead retaining profits and recalculating loan-book risks. "Banks want to be autonomous from governments, and they value this higher than some business lines," said Nicolas Veron, a senior fellow at Bruegel. "At this point, however, no option is attractive. That's why we see the turmoil in the banking sector." Bloomberg(19 Jan.)

• Ireland meets goals under rescue programme, troika says
  The European Commission, the European Central Bank and the International Monetary Fund said the Irish government met fourth-quarter goals mandated by a rescue programme. However, Dublin faces "considerable challenges" this year. "The program is on track but challenges remain and continued steadfast policy implementation will be key," the troika said in a statement. The Wall Street Journal(19 Jan.)

Morning Bell

AFME warns how proposed transaction tax would affect FX markets
AFME released a report that shows how a proposed tax on financial transactions could significantly increase costs in foreign exchange markets. The report, prepared by Oliver Wyman, warns that the tax could drive as much as three-quarters of tax-eligible transactions outside the EU. "This study shows that the proposed tax would in effect penalise Europe's businesses for sensible risk management [who] use FX products to manage currency fluctuations, and also threaten to impose further costs on the investment returns of pension funds and asset managers," said James Kemp, managing director at AFME. The Wall Street Journal/Dow Jones Newswires(17 Jan.)

Industry News

Greece's Papademos will discuss debt relief with bondholder group
Negotiations between Greek officials and a group representing private bondholders are set to resume after a five-day break. Prime Minister Lucas Papademos is poised to meet with the group to discuss forgiving 50% or more of Greece's debt. "The next few weeks will be the most difficult in the Greek programme," said Athanasios Vamvakidis, a foreign exchange strategist at Bank of America. "All this needs to be completed by mid-March to avoid a disorderly default. Not an impossible task, but clearly very challenging with very much at stake." Bloomberg Businessweek(17 Jan.), Reuters(17 Jan.), The Washington Post/The Associated Press(17 Jan.)

Almunia emphasises competition as he considers DB-NYSE merger
Joaquin Almunia, the EU's top antitrust regulator, vowed to drive competition using "all available instruments" as he considers the proposed merger of Deutsche Boerse and NYSE Euronext. "In this case as in others", the European Commission "will seek to ensure that European markets remain fair, efficient and therefore competitive to the advantage of their users", Almunia said. Bloomberg(17 Jan.), The Wall Street Journal(17 Jan.)

Morning Bell

• Commentary: Overly complex regulations won't prevent crises
  Columnist Joe Nocera writes that Jamie Dimon, CEO at JPMorgan Chase, and other industry experts are raising concerns about the onslaught of regulations hitting the financial sector. Nocera explains that the regulations are often too complex, contradictory, or both, and that they are unlikely to prevent crises. The New York Times (tiered subscription model)(1/16)

Industry News

• Industry studies idea of "mutual recognition" for new rules
  A coalition of industry groups, including SIFMA and AFME, commissioned the law firm Clifford Chance to study the idea of "mutual recognition" of regulations in the EU and the U.S. Financial Times (tiered subscription model)(1/16)
• Pandit: Financial system needs more market-driven reform
  Citigroup CEO Vikram Pandit writes that the financial system can be improved by increasing transparency and giving markets more tools to discipline firms that use too much leverage. Financial Times(tiered subscription model)(1/10)
• Dealers shift from corporate securities to Treasurys
  As of Dec. 28, the Federal Reserve's 21 primary dealers held a combined $74.7 billion in U.S. Treasurys and $61.1 billion in corporate bonds. It is the first time that the largest bond-trading firms on Wall Street have held more Treasurys than company debt. Bloomberg Businessweek(1/17)

Morning Bell

• S&P move prompts backlash from European officials
  Standard & Poor's downgrades of credit ratings of nine euro-zone nations prompted questions and calls for systemic changes from EU lawmakers and other officials. Michel Barnier, the EU's internal-market commissioner, criticised the credit rating agency's move. "I am surprised time and time again by the timing the rating agencies choose to make such announcements," Barnier said. "These rating agencies should have given their alerts five, 10 years ago; not now." Reuters(16 Jan.), The Wall Street Journal/Dow Jones Newswires(16 Jan.), The Wall Street Journal/Dow Jones Newswires(16 Jan.), Bloomberg(16 Jan.)
• Markets largely are unmoved by rating downgrades: Standard & Poor's cuts of nine euro-zone countries' credit ratings did little to move European stocks, governments bonds and the euro because the downgrades were already priced in. Financial Times (tiered subscription model)(16 Jan.)
• German bonds become even more attractive after S&P move: Standard & Poor's downgraded the triple-A credit ratings of France and Austria, making German bonds increasingly attractive as a safe haven. "Germany's stable outlook means that it remains one of the strongest issuers available to investors," said Gianluca Ziglio, an interest-rate strategist at UBS. "Low German yields are here to stay. This week's Spanish auction will probably be less supported." Bloomberg(16 Jan.)

Morning Bell

Study: EU financial-transaction levy could hit tax revenues
A proposed EU tax on financial transactions could reduce, rather than increase, overall tax revenues, according to a study by economic consultancy Oxera and commissioned by AFME. Financial Times (tiered subscription model)(10 Jan.)

Sarkozy insists France must move forward with Tobin tax: French President Nicolas Sarkozy said France must lead the way on a financial-transaction tax despite concerns that going it alone might damage the country's financial-services industry. Financial Times(tiered subscription model)(10 Jan.)

Merkel's party will push for financial-transaction tax: Germany's Christian Democrats, the party of Chancellor Angela Merkel, will press for the EU to implement a tax on financial transactions, a senior lawmaker said. The UK and Sweden oppose the tax, but Merkel favours the move with or without their support. Reuters(10 Jan.)

Morning Bell

DOL's Borzi acknowledges difficulty of fiduciary-rule request
Phyllis Borzi, a Labor Department official, acknowledged that it might not be feasible for financial firms to provide requested information by a Jan. 15 deadline. The information is meant to help the department as it reproposes a rule that would subject retirement plan advisers to a more stringent fiduciary standard. "We are not trying to stall the process, but we do want the department to undertake the necessary analysis to determine whether such a regulatory change is beneficial to the millions of IRA holders who are trying to save for their retirements," said Lisa Bleier, a managing director SIFMA. Learn more about SIFMA's position on fiduciary. Reuters(1/9), InvestmentNews (free registration)(1/9)

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Dimon discusses U.S. economy, housing market, European crisis    Source: CNBC Jamie Dimon, CEO at JPMorgan Chase, said the U.S. economy is growing, but slowly. He said the housing market is close to bottoming out, but that problems will continue. He encouraged European officials, including European Central Bank policymakers, to resolve the region's debt crisis.CNBC (1/9), The Wall Street Journal (1/9), Forbes (1/9)

Industry News

Mortgage bond investors file more lawsuits against issuers
The Patton Boggs Mortgage Litigation Index reached a four-year high, indicating a number of mortgage-related lawsuits. "The increase in MBS litigation is partly driven by statutes of limitations on investors’ claims," said Patrick McManemin, a partner at Patton Boggs. "State claims against originators for alleged mishandling of portfolios, inadequate underwriting practices and misrepresentations regarding loan quality on the part of private and GSE litigants can only be preserved by filing lawsuits before claims expire." Housing Wire(1/9)

Wall Street firms reportedly consider freezing pay for some
Credit Suisse Group, Goldman Sachs Group and other Wall Street firms are considering freezing compensation for some analysts, associates and other junior bankers, sources said. However, there could be consequences. "There’s always the risk that people may go across the street for a better deal," said Joseph Sorrentino, a managing director at Steven Hall & Partners. "You have some potential future stars, and you want to make sure you keep them engaged and keep them happy and performing." Bloomberg(1/10)

Morning Bell

France and Germany warn Greece about bond swap
German Chancellor Angela Merkel and French President Nicolas Sarkozy warned Greece that it must reach an agreement with creditor banks on reducing its debt or no more rescue funds will be made available. Merkel and Sarkozy's meeting launches the next round in an effort to resolve Europe's debt crisis. Reuters(09 Jan.)

Talks on Greek debt restructuring near end, Rehn says: Olli Rehn, the EU's economic and monetary affairs commissioner, said talks with private investors on a haircut on Greek government bonds could conclude soon. Rehn said the writedown is expected to be about 50%, a level agreed upon last year. "There is no specific date [for when] this should be concluded, but of course the sooner the better," Rehn said. "We are, to my mind, reaching the final stages of the negotiations, and thus the talks could be concluded shortly as regards private-sector involvement." Reuters(09 Jan.)

Industry News

Cameron will veto transaction tax unless it's adopted globally
British Prime Minister David Cameron reiterated his pledge to veto an EU-wide tax on financial transactions unless the measure is adopted worldwide. "The idea of a new European tax, when you're not going to have that tax put in place in other places, I don't think is sensible and so I will block it," Cameron said. France and Germany are pressing for the tax. Reuters(08 Jan.)

European transaction tax worries exchanges and clearinghouses: Exchanges, clearinghouses and other market infrastructure are increasingly concerned that they are being sucked into the debate regarding Europe's proposed financial-transaction tax. Financial Times(tiered subscription model)(09 Jan.)

France's financial industry criticises proposed tax: French banks, institutional investors and others involved in the financial industry have voiced concerns about President Nicolas Sarkozy's plans to introduce a financial-transaction tax unilaterally. Financial Times (tiered subscription model)(08 Jan.)

City job openings dropped in December, survey finds
The number of job openings in London's financial-services sector plunged 43% last month and was down 8% in 2011, according to an Astbury Marsden survey. Financial Times(tiered subscription model)(09 Jan.)

JPMorgan's Dimon discusses Europe's debt crisis
JPMorgan Chase CEO Jamie Dimon encourages European officials, including European Central Bank policymakers, to do what they can to resolve the sovereign-debt crisis. He also says the US economy is growing, albeit slowly. CNBC(09 Jan.), The Wall Street Journal(09 Jan.), Forbes(09 Jan.)

Morning Bell

SEC alters boilerplate settlement language
The Securities and Exchange Commission tweaked its boilerplate language on settlements, although the changes don't affect the agency's general approach. "The new policy does not require admissions or adjudications of fact beyond those already made in criminal cases, but eliminates language that may be construed as inconsistent with admissions or findings that have already been made in criminal cases," said SEC Enforcement Director Robert Khuzami. The New York Times (tiered subscription model)(1/6), Bloomberg(1/6)

Industry News

Risky residential-mortgage bonds face investor revolt
Early last year, investors started warming to bonds backed by subprime and other risky residential mortgages, but many have since shunned the market. Some said the market's revival could be far off. "Once that confidence disappears, it doesn't really matter what the fundamentals are, and the fundamentals are not that strong, either," said Marina Tukhin, head of mortgage and asset-backed trading at Gleacher Descap. The Wall Street Journal(1/7)

Worried investors flock to money market funds
Although money-market funds on average are paying only 0.02%, investors put $91.7 billion into such funds in November and December 2011. Investors are seeking safety, but that could be a problem for both investors and the companies that run the funds. Barron's (special access for SmartBrief readers)(1/7)

• Other News