national city bank

Sources: FT: Derivatives Reform Will Not Prevent Next AIG ; Lawmakers Warning on Derivatives Rules ; Banks Anxious Over Fed Regulations A group of New York lawmakers recently sent a letter to US financial regulators including the Federal Reserve and the Commodity Futures Trading Commission, warning that a newly proposed rule on derivatives under the Dodd-Frank Act would hurt the competitiveness of the US financial institutions. The lawmakers also wrote in a letter that the rule would be “inconsistent with Congressional intent.” It is a margin rule that the lawmakers make an issue of, which applies to US banks as well as their foreign subsidiaries located outside the US. Specifically, the rule requires parties to some derivatives transactions to post cash or securities as collateral or “margin” in order to assure their obligations. Under this rule, foreign subsidiaries also have to collect collateral from their foreign clients. Unless foreign regulators do not adopt a similar approach, ...

Sources: Bloomberg: Hong Kong Banks Told To Hold Stress Tests Assuming $89 Billion In Outflows ChinaDaily: HKAB: Banks May Slow Credit Growth FT: Hong Kong Tests Banks’ Ability To Survive Outflows Market Watch: Hong Kong Banks Asked to Conduct Stress Tests Hong Kong banks will conduct another stress test to see whether they could withstand capital outflows of HK$650 billion ($83.52 billion) in customer deposits. Since late 2008, the amount of deposits in Hong Kong banks has grown rapidly by HK$1.38 trillion ($177 billion). As liquidity is tightening and the United States may soon raise interest rates, the Hong Kong Monetary Authority (HKMA), the de facto central bank, requested banks to test whether they could survive if customers withdrew half of such new deposits in six to twelve months. “When the US ends its quantitative easing, monetary policy and global liquidity will tighten, and this may cause more fund outflows in Hong Kong,” said Paul Lee, an analyst at Haitong International...

Sources: Economist: Cutting It Fine Bloomberg: European Bank Funding Threatened as Basel III Meets Solvency II FT: Banks Endorse Option of Creditor ‘Bail-in’ ; Brussels to Target Bondholders on Bail-outs In many European countries, the maturities of bank debt have shortened dramatically in 2011 compared to 2006, according to data provided by Dealogic. In particular, in countries having sovereign-debt problems such as Greece and Portugal, the maturities of bank debt have fallen more sharply. In other countries such as Spain and Italy, banks also face funding difficulties and have been issuing more short-term bonds or paying higher yields. In the case of Italy, banks pay higher yields on their bonds by 1-1.5 percentage points than banks in France and Germany. Having more short-term funding is worrying because it makes banks vulnerable to a sudden liquidity dry-up in short-term funding markets as it happened during the recent global financial crisis. On the other hand, banks in some count...