In December, the European Commission ("E.C.") summarized the comments submitted in response to its green paper on shadow banking. Among other things, the E.C. noted that, as in the U.S., some stakeholders believe that money market funds and exchange traded funds should not be subject to further regulation. Addressing securities lending and repurchase agreements, the E.C. noted that respondents support a holistic regulation addressing directly the issue of increased leverage but expressed concerns regarding haircut requirements due to the potential risk of increased pro-cyclicality. During the first quarter of 2013, the E.C. plans to provide further details regarding areas for which legal proposals might be developed, and their respective timing.

Last week, the Financial Stability Board ("FSB") made available the comments it received in response to its shadow banking proposals. The FSB's proposals drew a wide and varied response from industry participants and their representatives. They emphasized the need to avoid regulatory overreach on the one hand, and the encouragement of regulatory arbitrage on the other.
 
And the Bank of England published the most recent results of its biannual Sterling Money Market Survey. The Survey, issued as a separate report for the first time, gathers quantitative and qualitative information on developments in the sterling money market. The Survey noted that the value of total sterling money market transactions in November 2012 was slightly higher than in the previous survey in May 2012 and that the majority of transactions continued to take place at overnight maturity.