RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Categorized | Banks, Economy

EU ready to push back on bank capital rules

Posted on September 29, 2016

Valdis Dombrovskis©Bloomberg

Valdis Dombrovskis

Europe’s financial regulation chief has warned that he is prepared to reject international plans to toughen capital requirements for banks, in a sign of the growing rift between the EU and US over how to prevent another financial crisis.

    Valdis Dombrovskis, a vice-president of the European Commission in charge of finance and economic policy, said that Brussels would not accept any reforms that “lead to a significant increase in the overall capital requirements shouldered by Europe’s banking sector”. He added that current plans being considered by global regulators need work in “a number of areas”.

    European banks have come under increased financial market pressure in recent weeks, with Deutsche Bank and Monte dei Paschi in particular focus.

    On Wednesday, the German government was forced to deny local press reports that it was working on a rescue package for Deutsche, which has seen its share price drop more than 50 per cent this year.

    Earlier this month, the chairman of Monte dei Paschi — which came last in the most recent European bank stress tests — resigned following a row over a €5bn capital raising.

    Andrea Enria, chairman of the European Banking Authority — which carried out the stress tests, — said at a conference on Wednesday that European governments should consider whether public funds “could be part of the ingredients” deployed to help clean up bank balance sheets.

    Mr Dombrovskis’ warning brings out into the open a fight that has been brewing in the Basel Committee on Banking Supervision, one of the global bodies for developing financial rules.

    Short View

    Bonfire of European bank shares

    In 'Brewster's Millions' the main character wanted to have nothing to show for his $30m

    Some may now be tempted to view their battered equity as cheap. They should not

    The split centres on a drive by some nations, including the US and Switzerland, to restrain the freedom banks have to measure the riskiness of their investments, and so calculate the amount of loss-absorbing capital they need.

    US regulators argue that the step is essential to avoid gaming of the system by banks. European banks, however, have argued that because of transatlantic differences in the mortgage market, and in accounting rules, they would end up being the prime target of the measure.

    The Basel talks have become a battleground in a wider debate over whether European banks have enough capital. People involved in the two meetings of the Basel committee this month said that the group has become “polarised” on key parts of the reform.