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.)

Europe's major banks likely won't buy sovereign debt, S&P says
European banks have tapped the European Central Bank's three-year lending facility, prompting speculation that they will use the funds to buy sovereign debt. However, Standard & Poor's analyst Scott Bugie said the largest banks are unlikely to do so. "The top-tier banks don't want to buy government bonds because they don't like the volatility in value," he said. Reuters(24 Jan.)

Banks face regulatory reforms and bleak economic outlook
Banks are facing a perfect storm, including an onslaught of regulations and a dismal economic outlook. The situation is prompting financial institutions to shrink. Financial Times (tiered subscription model)(24 Jan.)

Barnier seeks more time to review Deutsche Boerse-NYSE deal
Michel Barnier, the EU's internal-market commissioner, put a "waiting reserve" on the proposed merger of Deutsche Boerse and NYSE Euronext. The move gives Barnier leeway to challenge antitrust regulators' recommendation to block the tie-up. A source said the European Commission will follow the recommendation of Competition Commissioner Joaquin Almunia and block the deal. The Wall Street Journal/Dow Jones Newswires(24 Jan.), Financial Times(tiered subscription model)(24 Jan.), Reuters(24 Jan.)

Regulatory Roundup

France is working on temporary transaction tax, official says
French Finance Minister Francois Baroin said that while EU authorities work on a permanent tax on financial transactions, his government is drafting a temporary tax. "The process of drafting a directive is long, and France wants to address a very strong message in the meantime," Baroin said. "We're working on a system which can be operational on its own, which would prefigure what will be the financial-transaction tax as soon as the directive is adopted." The Wall Street Journal/Dow Jones Newswires(24 Jan.)

UK will veto proposed EU transaction tax, ICAP CEO says: ICAP CEO Michael Spencer said Britain will not agree to the EU's proposed financial-transaction tax. If the UK doesn't veto the tax, ICAP will transfer its London headquarters to New York, Spencer said. "I have had it first-hand from very senior members of our administration who I know personally and have had good relations with for a long time that it will be vetoed without any doubt and without any reservation at all," Spencer said. Risk.net (subscription required)(25 Jan.)

ESMA cautions on plans to bolster competition in ratings
Verena Ross, executive director of the European Securities and Markets Authority, said the regulator supports bolstering competition in the credit rating sector, but concerns remain. "At least in the short term, there is a risk that new entrants will come by offering higher ratings or lower prices," Ross said. The European Commission proposed in November a blueprint for increasing rating competition and lessening the dominance of Moody's Investors Service, Standard & Poor's and Fitch Ratings. Reuters(24 Jan.)

EU takes aim at zero-risk weighting of sovereign debt
EU lawmakers are scrutinising the notion that sovereign debt carries a zero-risk weighting. Some officials are calling on banks to hold additional capital to cover possible losses on risky government bonds. Germany, however, warned that additional regulatory burdens shouldn't be heaped on banks. "We do not support any sudden change to the zero-risk weighting of sovereign bonds," said German Finance Minister Wolfgang Schaeuble. Reuters(24 Jan.)

• Other News

Bank of England is ready to launch more stimulus, King says
The Wall Street Journal (24 Jan.)

Finland's Liikanen won't seek seat on ECB Executive Board
Reuters (24 Jan.)

Australian banks should adopt tougher capital rules, IMF says
The Wall Street Journal/Dow Jones Newswires (23 Jan.)