Week InReview | G-7 leaders say downside risks growing for global economy;  Japan's Abe fails in bid to have G7 warn of global crisis risk | CFTC sets final cross-border swaps margin rule that broadens circumstances in which banks'  foreign units must adhere to U.S. collateral requirements |  Personal responsibility vital for compliance: SEC official | ICYMI + Binge Reading Disorder

Friday, May 27, 2016
Let's recap
In case you missed it . . .

Downside risks growing for global economy
G-7 leaders say
(May 26)  Group of 7 leaders released a communique from their Ise-Shima summit in Japan. Some h ighlights:
  • Excessive, disorderly FX moves have bad impact on economy; G7 will consult closely on future actions
  • Nations should refrain from competitive devaluation
  • Reconfirmed importance of fiscal, monetary, reform policies
  • Monetary policy alone cannot lead to sustainable growth
  • Committed to stronger coordinated response to economic conditions
  • Brexit would be further serious risk to growth
  • Excess steel capacity has negative impact on economy
  • Concerned by situation in E. China Sea, S. China Sea
  • There was no mention of the global economy "falling into a crisis" which the Japanese government was said to be pushing for.
CFTC approves rule to close it
(May 24) The Commodity Futures Trading Commission approved a rule 2-1 that broadens circumstances in which banks' foreign units must adhere to U.S. collateral requirements.
  • Rule allows banks to adhere to overseas regulations governing swaps trades if they are similar to what the U.S. agency has put in place
  • Allows substituted compliance in some circumstances
  • Sets process for seeking comparability determinations

Cross-border application of U.S. derivatives rules has been one of most contentious features of Dodd-Frank; rules aim to set capital, margin requirements for security-based swaps trades and conduct standards for swaps dealers.
Personal responsibility vital for compliance
SEC official 
(May 20) Securities and Exchange Commission chief of staff warned that  personal responsibility for decisions can wane in organizations where use of technology is pervasive. While technological advances have helped  companies with compliance functions, they also may degrade individual responsibility for ensuring compliance, warned  Andrew Donohue at a corporate governance conference. ' It is not about assigning blame when a problem occurs but rather ensuring ownership of the process to lessen the likelihood that there will be a problem,' he said. 'This can be pervasive within an organization where technology has been employed extensively.'  Donohue also said corporate compliance programs work best when they are kept simple. 'The simpler and more intuitive your policies and procedures, the greater the likelihood that they will be understood and complied with,' he said.
Binge reading disorder
Hand-curated, chosen with love
25 bad words that make other people feel inferior

At swinging Wall Street parties, the Feds are now on the prowl... Regulators mingle at bond conferences for tips on wrongdoing... Possible downside: SEC officials lured to jobs in finance

Blockchains, bazaars and price fixing cartels
Transparency.
Inclusiveness.
Consensus.