LIBOR, which stands for ‘London Interbank Offered Rate’ is a benchmark interest rate that is currently used across a wide range of financial contracts both on and off balance sheet. Currently contracts in excess $370 trillion are reliant on LIBOR benchmark rates. As things currently stand, the LIBOR rate that appears on pages of a Reuters (or other) screen could go blank on 1st January 2022.
LIBOR is going nowhere fast. With $370 trillion of outstanding notional swaps tied to it, the desire to wean markets off this popular fix is going to be a long hard slog. The reasons for removing LIBOR are well rehearsed and the underlying intellectual rigour behind the arguments were compelling before the deluge of rate rigging allegations appeared.
The UK’s Cryptoassets Taskforce is comprised of HM Treasury, the FCA and the Bank of England. Not to be likened to the three witches from Macbeth who are often thought about at this time of year!! Just in time for Halloween, they have published a Final Report that sets the scene for the Cryptoassets, Blockchain and Distributed Ledger Technology (DLT) sector in the UK from a policy and regulatory perspective.
The European Union (EU) Securities Financing Transaction Regulation (SFTR) is part of Europe’s continuing clampdown on potential risks in the banking & financial services sectors. Scheduled for introduction in Q3 2019, it requires firms to report details of their Securities Financing Transactions (SFT’s) to trade repositories. This includes a range of instruments including; Repos, Securities and Commodities Lending, Buy/Sell Backs, Margin Lending and Total Return Swaps.
With FX volatility now rising rapidly our three fintech entrepreneurs were planning how to disrupt the Foreign Exchange market (the only financial market that runs for 24 hours per day) with a revolutionary ‘follow-the-sun’ app. They were planning to set up a global, low-cost, transparent, real-time, digital, blockchain exchange staffed by robots.
The American Foreign Exchange Committee (FXC) has issued one of its letters last week addressed to all “Market Participants”. The FXC is an FX industry group that has been providing guidance to the market since 1978.
The 2018 Payment Services Directive (PSD2) opens up payments markets to new, radical service providers in an aim to create a cheaper, more efficient European payments market. It provides new opportunities for third parties to access banks’ internal data in real-time to improve customer service.
Football is a game of two halves but last night for English fans that added 4 minutes felt like another half! For the “football’s coming home” brigade it was a decent start. The debate around VAR was well and truly stoked following the game and the pundits debate on the efficiency of VAR continues! We “was robbed” a phrase that comes to mind! It is uncanny how this translates into parallels with current debate in the financial markets.
Eurobase has just given me a reusable coffee/tea mug in support of World Environment Day. This should arrest the use of plastic in the office and help our seas and oceans, albeit in a very small way, but every little helps! Cycling into work, I heard on the radio about the tremendous amount inspired teachers do to educate our children on environmental matters. I can personally attest to the “nag factor” our teenagers bring to correct the ways of their elders! Overall, it is about doing the “right thing”.
Some corporate banks have recently been losing clients to non-traditional providers of payment services. Others are wondering how best to tap into this important revenue opportunity during a period of rapid evolution. Either way there are some fundamental concepts that need to be incorporated when designing an extended online service. Disruptors have demonstrated the importance of creating digital solutions that make it easy for customers to conduct their payments fast and with full transparency. Fortunately, there is no exclusivity on functional excellence and more conventional banking providers are now benefiting from the lessons learnt.