Week InReview

MiFID to shift bond, derivatives deals to trading venues
The European Union's MiFID II law that takes effect next month is expected to drive a significant, rapid shift in trading of bonds and derivatives to electronic and other trading venues. A Deloitte survey of a dozen buy-side firms showed the law will lead to a decline in private, over-the-counter, trading in many common contracts. "MiFID II will transform the market structure for non-equities," Deloitte said.
Fri Dec 8, 2017
Let's recap
In case you missed it . . .
Fannie-Freddie overhaul plan takes shape on Capitol Hill
Corker-Warner would keep Fannie-Freddie but create competitors; key House Republican acquiesces to explicit mortgage guarantee (Dec 7)

Global regulators agree on rules to prevent financial crises
The rules are the capstone of years of grindingly detailed work by the so-called Basel Committee. Known as Basel III, the rules require banks to reduce their dependence on borrowed money so they are less susceptible to losses from bad loans, market turmoil or other problems (Dec 7)

Wall Street to get more help on stress tests in new Fed proposal
The  Federal Reserve  is responding to years of complaints over its stress tests for the biggest banks with a proposal to "significantly" open the curtain on how the famously hard-to-predict exams work
The Cyber Cafe
Cybersecurity news every Friday
Banks build line of defense for doomsday cyberattack
The Sheltered Harbor project is meant to ensure that every U.S. bank has a protected, unalterable backup that can be used to serve customers in case of a major hack.

You can't secure 100% of your data 100% of the time
The statistics are alarming, but in fact they significantly understate the scope of the threat. Because of a form of attack called credential stuffing,  tens of billions of other accounts are also at risk.

Security bug that let hackers steal banking passwords put 10 million app users at risk
The vulnerability, if exploited, could be used to steal passwords and PINs.
Swaps cops in pajamas
CFTC union deal includes telework
(Dec 7) -- The main U.S. derivatives regulator has reached a new pay deal with its employees as it moves to boost relations with workers whose unhappiness with the cash-strapped agency led them to join a labor union three years ago.  Under the agreement with the National Treasury Employees Union, staff at the Commodity Futures Trading Commission will get 2 percent annual increases, plus merit raises, for the next three years, according to people familiar with the matter and an agency memo. As an added benefit, workers will be allowed to do their jobs remotely twice a week.
U.S. financial stability
Risk remains 'moderate': OFR
(Dec 5) -- Overall risk level is similar to a year ago, U.S. Office of Financial Research said in releasing its 2017 Annual Report to Congress and the 2017 Financial Stability Report.  "We assess threats to financial stability by weighing vulnerabilities in the financial system against its resilience," OFR Director Richard Berner said in a statement . Some highlights:
  • Financial-system resilience has improved
  • Market risk, or the potential for sudden changes in asset prices that could disrupt the economy, remains "elevated, particularly in the stock markets and bond markets"
  • Cybersecurity is also a concern
New Basel reforms
U.S. regulators plan to adopt
(Dec 7) -- U.S. bank regulators say they support changes to Basel III capital standards in a long-awaited agreement of the Basel Committee on Banking Supervision.
  • Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. said in a joint statement they'll "consider how to appropriately apply these revisions" through rulemaking process
  • "With this agreement, the Basel Committee will bring to conclusion the international reforms initiated in response to the global financial crisis," they said in the statement
  • Changes are meant to "improve risk sensitivity, reduce regulatory capital variability, and level the playing field among internationally active banks," the agencies said
Binge reading disorder
Hand-curated, chosen with love.
How to find the best bar in any city around the world
As co-founder of one of the coolest nightlife chains on earth, Igor Hadzismajlovic's job is to keep abreast of what's happening in cocktail culture. Here's his advice on how to do the same - and other travel hacks.

Welcome to the elite private club of the world's central bankers
There's a changing of the guard at the Bank for International Settlements , the little-known but influential organization that sits at the heart of the word's financial system.

98,750,067,000,000 reasons to be scared about 2018
Did someone mention the word bubble in financial markets?
Transparency.
Inclusiveness.
Consensus.