Latest news with #financialRegulation
Reuters
2 hours ago
- Business
- Reuters
Westpac unit to settle conduct oversight probe with Australia's securities regulator
June 4 (Reuters) - Australia's Westpac ( opens new tab said on Wednesday that its unit, RAMS Financial Group, had reached an agreement with the country's securities regulator to resolve an investigation concerning oversight of conduct of its franchisees and their employees. The unit will resolve the matter through agreed civil penalty proceedings filed by the Australian Securities and Investments Commission (ASIC) in the Federal Court, based on allegations of systemic misconduct in arranging home loans. The ASIC has commenced proceedings against the lender's unit, alleging that it engaged in widespread unlicensed conduct between June 2019 and April 2023. RAMS has admitted to conducting business with unlicensed persons, failing to properly supervise its representatives, and other related shortcomings, the regulator said in a statement. ASIC is seeking declarations and financial penalties against RAMS, and the date of the first hearing is yet to be scheduled.
Irish Times
2 days ago
- Business
- Irish Times
The Irish Times view on financial regulation: time to spread the net
EU regulators are set to conduct comprehensive stress tests of the non-bank sector, which could begin as early as next year. The non-bank sector includes hedge funds, private equity firms, and other investment vehicles that have grown significantly in size over recent years. The move has prompted fears among these investment funds that new layers of regulation are on the way. But increased scrutiny is the right course of action for two key reasons. The creation of EU banking union in 2014 introduced a much more robust regulatory regime for systemically important banks across the 27-member union, including much stricter rules on lending and capital ratios. This has had the effect of pushing a lot of borrowing and related activities to non-bank entities, which has increased the level of risk in the sector. The stress tests aim to gauge the threat it poses to the wider economy. There is a second and potentially more important reason. Over the first 100 days of Donald Trump's second presidency, he has slashed many of the US financial regulations introduced in the wake of the 2008 financial crisis. Of particular concern, he has hollowed out many of the federal agencies responsible for regulating the financial system and, in some cases, brought them under the direct control of the White House. Moreover, he is actively using his presidency to promote highly volatile crypto currencies. This all creates risks in the financial markets, as does the fact that Trump's budget bill, now in Congress would, if enacted, add up to $3 trillion to the US national debt over the next decade. It is little wonder that the bond markets are nervous. READ MORE Trump often accuses the EU of over-regulation – and the report by former European Central Bank president Mario Draghi has argued that in some areas of the economy, particularly technology, rules do need to be streamlined. But the events of 2008 show that the bias in financial regulation needs to be towards caution. The costs of failure are just too great. The proposed stress tests of the non-bank sector are thus to be welcomed.
Irish Times
27-05-2025
- Business
- Irish Times
EU plans sweeping stress test of non-banks
European Union (EU) regulators are planning their first stress test to look for vulnerabilities in the financial system outside of banks, reflecting fears about the rapid growth of less regulated groups such as hedge funds and private equity. The plans by European authorities to examine the impact on the wider financial system of a potential market crisis, which would also include pension funds and insurers, follow a similar debut exercise by the Bank of England last year. Officials at the EU's main financial watchdogs are still discussing the details of such a system-wide stress test of non-bank institutions, but they are optimistic that it could be launched next year, according to two people involved in the talks. The move is likely to raise serious concerns among hedge funds, private credit groups and money market funds that they could be subjected to greater scrutiny and restrictions by European regulators in the future. READ MORE Since the 2008 financial crisis, the provision of loans has shifted from banks' balance sheets towards other firms that behave like traditional lenders but are more lightly regulated. Non-banks accounted for about a quarter of the total €19 trillion stock of loans in the euro zone at the end of 2023, according to the European Central Bank (ECB), which said 'more and more loans are being provided by insurance corporations and pension funds'. [ Total bank losses from Archegos implosion exceed $10bn Opens in new window ] Supervisors are growing increasingly concerned about the opacity and potential risks these firms could present, as well as links back to the banking system. Lending by euro zone banks to such non-bank firms has tripled since 1999 to reach €6 trillion by the end of 2023. Non-banks have been central to several episodes of market turmoil in recent years, including a dash-for-cash in bond markets after the pandemic hit, the collapse of family office Archegos Capital Management three years ago, and a liquidity crunch at energy traders after Russia invaded Ukraine. 'We're at a critically low level of housing stock' for buyers and renters Listen | 33:06 'We've seen some crisis episodes . . . where liquidity risk spillovers came from the NBFI, non-bank financial intermediation space,' Claudia Buch, chair of the ECB's supervisory board, told the European Parliament in a recent hearing. 'So, it's important that this is also well understood and well regulated,' Buch said. 'So not all NBFIs are more risky than banks or other financial institutions, but we need to address the risks there in the right way and also the regulation needs to be targeted to those risks.' EU regulators also worry that the region has been slow to tighten rules for money market funds, which are an important source of funding for banks, leaving them with lower minimum liquidity requirements than those in the US and UK. Some national authorities in Europe have already announced they are planning to launch a similar stress test of so-called non-bank financial intermediaries (NBFI), including those in France. The EU exercise would build on the specific sector-focused stress tests already carried out regularly for banks, insurance companies, money market funds and clearing houses in the 27-country bloc. The aim is to examine how a crisis would spread between different parts of the financial system and whether this could magnify the shock rather than absorbing it. Discussions have included the European Banking Authority, the European Securities and Markets Authority, the European Insurance and Occupational Pensions Authority and the ECB, as well as the European Commission and the European Systemic Risk Board. The regulators and the commission all declined to comment. The commission said on Friday it would delay the implementation of tougher capital requirements for banks' securities trading businesses by a year until early 2027. The delay will allow Brussels to wait for clarity on whether the US will go ahead with the rules agreed by global regulators on the Basle Committee on Banking Supervision. The Bank of England (BoE) involved more than 50 City of London institutions in its so-called system-wide exploratory scenario – which included the theoretical default of a hedge fund – to model how a period of stress would ripple through non-bank firms. City firms were relieved when the BoE said resilience was 'comparatively high' in liability-driven investment funds in pension schemes, which had caused a crisis in gilt markets two years earlier. But it also warned that fire sales of assets by pension funds, hedge funds and other investors could magnify a market crisis, especially as many had 'mismatched expectations' about their ability to raise cash in a meltdown. – Copyright The Financial Times Limited 2025
Bloomberg
24-05-2025
- Business
- Bloomberg
Turkish Central Bank Tightens Screws on Cheap Lira Window Abroad
Turkey's central bank raised the reserve requirement ratios on banks' short term liabilities abroad in a bid to discourage local banks from seeking cheap lira from offshore markets. The bank early Saturday raised the reserve requirement ratio to 18% for maturities as long as 1 month in lira-denominated funds from repo transactions and loans obtained from abroad, and to 14% for maturities as long as 3 months. Previously, the reserve requirement ratio was 12% for maturities of as long as 1 year for repo transactions and loans abroad.
Finextra
19-05-2025
- Business
- Finextra
UK Government to rush through new rules governing buy now, pay later products
After years of haggling, the UK Government is finally introducing new rules to clamp down on what it describes as the 'wild west' buy now, pay later sector. 0 Under the changes, millions of BNPL shoppers will gain stronger rights and clearer information as the Government reforms the 50-year-old Consumer Credit Act to better reflect modern borowing trends. That means upfront checks to make sure people can repay what they borrow, fairer and faster access to refunds, and the right to complain to the Financial Ombudsman — bringing BNPL in line with other credit products. The Government says outdated and confusing rules will be removed, with oversight shifting to the FCA. The legislative shift comes as a report by the FCA showed that one in ten people were unable to pay essential bills while millions more Brits were using buy now pay later products over the last three years. The legislation bringing BNPL into regulation will be laid in Parliament on 19 May. Tom MacInnes, director of policy at consumer champion Citizens Advice, says: 'For too long, people have been exposed to unaffordable debt from a BNPL sector that has operated in a regulatory grey area. For some, this has had dire consequences. Many people are struggling to repay credit they can't afford, falling behind on essential bills and often needing emergency support, like food bank vouchers. 'But this is by no means the end of the road. We now need to see the Financial Conduct Authority (FCA) act swiftly to set out the strong consumer safeguards that are so urgently required.'
