* FSB to be strengthened up to ensure new rules enforced* Names of surcharged banks may be published at November
summit* G20 stops short of mandatory commodities position limits* Germany says no chance of global financial transaction taxBy Francesca Landini and Huw JonesPARIS/LONDON, Oct 15 (Reuters) - Finance ministers and
central bankers from the world’s top economies backed on
Saturday a mandatory capital surcharge on big lenders of up to
2.5 percent to be phased in from 2016, dealing a blow to banks
hoping for a rethink or delay.The communique from a meeting of G20 finance chiefs endorsed
a 1-2.5 percent capital surcharge on top banks like Goldman
Sachs , HSBC , Deutsche Bank and
JPMorgan Chase .The aim is to make sure they have enough capital to
withstand market turbulence so that taxpayers won’t have to
rescue banks again in the next crisis.A summit of the G20 leaders in Cannes, France in early
November is set to give final approval to the surcharge plan and
name the banks affected, known as global systemically important
financial institution or G-SIFIs, G20 sources said.”Now that the framework applicable to G-SIFIs is agreed, we
urge the Financial Stability Board to define the modalities to
extend expeditiously the framework to all SIFIs,” the communique
said.JPMorgan Chase Chief Executive Jamie Dimon has called the
surcharge anti-American while insurers are battling against
being saddled with one too, as are second tier banks.The charge — which will be in addition to a “Basel III” 7
percent minimum core capital buffer being phased in for all
banks from 2013 — is part of a wider package the G20 ministers
endorsed on Saturday.They also reaffirmed the timeline for Basel III in another
blow to banks wanting a delay, saying they will crimp lending.Banks will welcome confirmation from Germany’s finance
minister there is no chance of a global tax on financial
transactions, though he urged Europe to push ahead with its own,
a step Britain opposes.Other elements backed on Saturday included common “tools”
for supervisors to wind up ailing banks, compulsory “living
wills” or resolution plans for every big bank, and more
intensive supervision for large lenders.The FSB, which formulates and coordinates financial
regulation on behalf of the G20, has already drawn up criteria
to determine which banks face a surcharge.It has said 28 banks would be affected if the regime was
introduced immediately but G20 sources said the Cannes summit
may name up to 50 lenders. Canadian Finance Minister Jim
Flaherty said there was no official list yet and he did not
expect any Canadian banks to be on it.FSB Chairman Mario Draghi steps down as chairman this month
to become president of the European Central Bank. Asked if he
was the lead candidate to replace him, Bank of Canada Governor
Mark Carney told reporters: “I hope so.”COMMODITIESThe FSB won G20 backing for its workplan to define the
so-called shadow banking sector before thrashing out
recommendations next year to regulate it.Supervisors fear that as banks face tougher rules, risky
activities could migrate to other parts of the financial system
such as money market funds and special vehicles.G20 presidency France lost its battle to introduce tough
curbs on what it sees as speculation in food and energy
commodity markets by imposing limits on the size of positions a
trader can hold at any given time.G20 ministers said recommendations from the International
Organisation of Securities Commissions (IOSCO), which groups
national market watchdogs, on more transparency in commodity
derivatives markets should be implemented by the end of 2012.The IOSCO report falls short of mandating commodity position
limits in the way the U.S. Commodity Futures Trading Commission
is expected to do next week.Ministers also asked IOSCO to make recommendations to
“improve the functioning and oversight of price reporting
agencies for mid-2012”.They also want to make it easier to track traders.”We underscored our support for a global legal entity
identifier system which uniquely identifies parties to financial
transactions with an appropriate governance structure
representing public interest,” their communique said.IMPLEMENTATIONThe Paris communique marked a turning point as the G20
begins to shift its focus from rulemaking to implementation of
the welter of rules it set in train.Its main tool will be a beefed up FSB.”To ensure that the FSB keeps pace with our ambitious
financial regulation agenda, we commit to strengthen its
capacity, resources and governance building on its Chair’s
preliminary proposals and call for first steps to be implemented
by the end of this year, the communique said.The ministers agreed to coordinate monitoring of Basel III,
set up peer reviews of how the capital surcharge is introduced,
and better coordinate their derivatives reforms which threaten
to miss the end of 2012 deadline.Draghi proposed more members from emerging markets and
developing countries on the FSB’s agenda-setting steering
committee, G20 sources said.He also wants representatives of finance ministries on the
FSB steering committee to add political clout, sources said.G20 ministers backed an FSB report on financial consumer
protection principles authored by the OECD but called for
further work on “implementation issues”.
@7 months ago
#UPDATE #1G20 #ministers #back #big #bank #capital #surcharge
* EU will review sanctions based on government actionsBRUSSELS, Oct 12 (Reuters) - The European Union welcomed
Myanmar’s freeing of political prisoners on Wednesday but said
it would judge the move based on how many were eventually
released.Myanmar freed at least 300 political prisoners including
several prominent dissidents on Wednesday, as one of the world’s
most reclusive states begins to open up after half a century of
authoritarian rule.The release came after Myanmar announced a general amnesty
for 6,359 prisoners for reasons such as their health and
conduct. But as many as 2,000 political prisoners remain behind
bars, according to international estimates.”We are checking to see how many political prisoners will be
among those released,” said Maja Kocijancic, a spokeswoman for
EU foreign policy chief Catherine Ashton.”We hope this is another step in the right direction. We
will assess the size of the step depending on numbers released.”She said the EU had called for the release of “all those
detained for their political convictions” and would judge the
government by its deeds and review EU sanctions against Myanmar
based on that assessment.The EU will also check on specific cases, such as those
involving prisoners who were old, sick or had been held for a
long time.The EU maintains sanctions on nearly 100 entities, most of
them in the timber and logging, mining and precious stones
sectors.However, Myanmar’s oil sector, in which French firm Total SA
is a significant investor, is not covered by a
specific investment ban.An EU official said he did not detect any rush towards
lifting sanctions.”While we have left open the possibility of a review, we are
only scheduled to come back to this issue next April,” he said.The EU slightly relaxed sanctions on Myanmar this April by
suspending the application of travel bans and assets freezes on
24 civilian government officials to encourage moves towards
reform.U.S. Secretary of State Hillary Clinton, speaking to Reuters
after Myanmar announced the amnestry plan, said she was
encouraged by “promising signals” of reform but that it was too
early to announce any steps Washington might take in response.
@7 months ago
#EU #to #judge #Myanmar #releases #based #on #number #freed
