He may be on his way out the door, but UK Financial Services Authority (FSA) chief exec Hector Sants seems determined to deliver a few parting shots to ensure that financial services firms tackle their risk management failures. In order to boost its success in this endeavour, the regulator will be hiring another 460 staff members and will be looking for those with industry experience of dealing with internal risk management systems within the financial institutions it wants to police.
The UK Financial Services Authority (FSA) has this week published its Financial Risk Outlook (FRO), which outlines the main risks and issues present in its operating environment, affecting firms, markets and consumers. The document sets out the regulator’s expectations for the industry in the post-crisis environment and directly calls for an investment in risk technology in particular.
McCreevy’s successor as the member of the European Commission responsible for Internal Market and Services, Michel Barnier, this week discussed the risk management challenges inherent in tackling the economic "great leap backwards" that the industry has experienced post-crisis. Speaking at a dinner hosted by the British Bankers’ Association (BBA) in London, Barnier elaborated on the priority of getting risk related regulation right in order to restore confidence in the European markets.
As noted by A-Team Insight last month (see 
There may be troubles ahead for the UK Financial Services Authority (FSA) with the impending departure of current CEO Hector Sants in the summer, but, in the meantime, the regulator has pledged to support the data vendor community in adapting to the new regulatory order. To this end, the regulator is strengthening its efforts around its independent software vendor (ISV) discussion group, which aims to provide vendors with a forum in which to air their issues.
The Division of Market Oversight of the Commodity Futures Trading Commission (CFTC) has criticised futures exchange ICE Futures US for its failings with regards to its compliance systems. In its recently published rule enforcement on the matter, the CFTC division claims that ICE staff cuts and a lack of investment in compliance automation meant that the exchange was unable to adequately comply with core principles relating to audit trail, trade practice surveillance, disciplinary and dispute resolution programmes.
The Committee of European Banking Supervisors (CEBS) was originally established as a forum to lead the charge towards a new Basel framework but in recent years it has become increasingly focused on the practical realities of risk management. Giovanni Carosio, deputy director general of the Bank of Italy who took over the reins as chairman of CEBS last September from Kerstin af Jochnick, recently elaborated on the regulatory body’s changing role and the position it feels the European Banking Association (EBA) should adopt in the building of a new IT infrastructure for regulatory data exchange in Europe.
Last week, the UK Financial Services Authority (FSA) bolstered its campaign to foster greater risk management responsibility within financial institutions with a new consultation paper (to add to the growing mountain) on effective governance standards. This is all part of what the regulator calls its “supervisory enhancement programme”, seemingly aimed at scaring CEOs into compliance with its requirements via the introduction of significant influence functions (SIF) interviews.
The Bank for International Settlements’ (BIS) recently published systemic risk paper includes an exploration of the possibility of developing a new systemic risk indicator constructed from real-time financial market data. The aim of the endeavour would be to improve the regulatory community’s ability to measure and stress test systemic risk, thus providing an early warning signal before a market crisis strikes.
It has been a rough few months for Federal Reserve chairman Ben Bernanke, but it seems that his future at the helm of the US central bank is secure for another four years. Bernanke, who has been an active proponent of mark to market accounting rules, among other things, was re-elected by the Senate to serve another term in office, despite weeks of criticism and uncertainty.
The UK Financial Services Authority’s (FSA) February deadline for the introduction of the Alternative Instrument Identifiers (AII) is fast approaching and this week the regulator has granted Trax platform operator Xtrakter approval to regulatory report exchange traded derivatives (ETD) using the new identifiers. Jason Waight, Xtrakter’s recently appointed director of product management, explains to A-Team Insight that the development maintains its status as one of the two fully approved reporting mechanisms (ARMs) under MiFID.
Following on from its “Dear CEO” letter sent out earlier this month (see our coverage 
January seems to be turning into the month for senior staff attrition at the US Securities and Exchange Commission (SEC); not only has ex-associate director of the enforcement division Fredric Firestone left the building (see 
In a similar vein to the G20 talks throughout the course of last year, Shyamala Gopinath, deputy governor of the Reserve Bank of India, has this month been discussing regulatory reforms aimed at reducing the risk around OTC markets via greater transparency and introducing new liquidity risk reporting measures. Gopinath is keen for the country to begin work on tackling the “key elements” for reform, she explained to a gathering of the Fixed Income Money Markets and Derivatives Association - Primary Dealers Association of India at the start of January.
Following the decision of the Securities and Exchange Commission (SEC) to crack down on electronic trading practices this month (see our coverage 
This week, the UK Financial Services Authority published another “Dear CEO” letter, this time aimed at compelling insurance brokers and investment firms to improve the way they protect client assets, including record keeping considerations. The letter, sent by the FSA’s managing director of risk, Sally Dewar, warns that firms must take heed of the regulator’s client money and custody requirements (CASS) or face further action.
New faces may be appearing at the Securities and Exchange Commission’s (SEC) enforcement division, as it swells its ranks to crack down on the financial markets, but familiar faces are also exiting the building. One such exit this month is associate director of the division, Fredric Firestone, who was heavily involved in the Enron case and the prosecutions following the collapse of the auction rate securities (ARS) market.
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The International Monetary Fund (IMF) and the Association for Financial Markets in Europe (AFME) have declared their views on crisis management and resolution arrangements for investment banks in Europe, indicating that further investment in data management and information systems will be needed to ensure effective resolution plans.
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