Stress Tests in China
On April 4th, Reuters reported that the China Banking Regulatory Commission (CBRC) will conduct regional and national stress tests on banks. The announcement is likely due to increasing financial strains on China’s economy and concerns over credit risk. However, it is unclear to what extent this is new policy, or whether results of the tests will be publicly released. Stress Tests.
Texas Agency Addresses Virtual Currencies
On April 3rd, the Austin American Statesman reported on the Texas Department of Banking’s memorandum on virtual currencies. Texas appears to be the first state in the U.S. to clearly define a state banking department’s regulatory treatment of virtual currencies, but claims only limited authority over such currency. Bitcoin Regulation.
U.S. Probes Deutsche Boerse over Ties to Iran Bank
On April 1st, Reuters reported that a U.S. grand jury is investigating whether Deutsche Boerse AG’s Clearstream Banking SA unit has ties to Iran and its central bank that violate U.S. money laundering laws or Iran sanctions. In an earlier case in January, Clearstream agreed to pay $152 million to settle claims that the bank held more than $2 billion in the U.S. for Iran’s central bank. Clearstream.
The Hazards of High-Frequency Trading
On April 3rd, Charles Schwab CEO Walt Bettinger told Fox Business that high-frequency trading is a growing cancer in the stock market. “High-frequency traders are gaming the system, reaping billions in the process and undermining investor confidence in the fairness of the markets,” according to Bettinger. “If confidence erodes further, the fuel of our free-enterprise system, capital formation, is at risk. We can’t allow that to happen.” Trading
Ex-Trader May Face Charges in U.S
On April 3rd, Reuters reported that the lawyer for Julien Grout, a former JPMorgan Chase & Co trader accused of helping to hide trading losses tied to a $6.2 billion financial scandal, says his client is open to leaving France to voluntarily face U.S. criminal charges. Whale of a Charge.
SEC Socks FSOC
On April 3rd, the Wall Street Journal reported on the continuing feud between the Securities and Exchange Commission and the Financial Stability Oversight Council as to which financial firms should be labeled as systemically risky, and subject to stricter oversight from the Federal Reserve. Luis Aguilar, an SEC member, said that the SEC’s authority as the primary regulator of the mutual fund industry had been “undercut” by the Financial Stability Oversight Council and its research unit, the Treasury Department’s Office of Financial Research. FSOC.
Off with Their Heads
On March 31st, CNBC reported on Manhattan U.S. Attorney Preet Bharara’s assertion that the government has gone too easy on corporations in recent years, and that corporate felony charges could be in the offing. Invoking prosecutors’ widespread hesitancy to file criminal charges, Bharara says the pendulum has swung too far toward a presumption of prosecutorial immunity on the part of corporations. Heads Will Roll.