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April 7, 2014 G L O B A L R E G U L A T O R Y O V E R V I E W Tim Ryan The International Economic...
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Transcript of April 7, 2014 G L O B A L R E G U L A T O R Y O V E R V I E W Tim Ryan The International Economic...
April 7, 2014
G L O B A L R E G U L A T O R Y O V E R V I E W
Tim RyanThe International Economic Forum of the AmericasPalm Beach Strategic Forum
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1 Status of Financial Sector Regulatory Reform
Status of EU Regulatory Rulemakings* Status of Dodd-Frank Rulemakings*
Source: Dodd Frank Progress Report, April 2014, Davis Polk Source: JPMorgan Estimates, March 2014
*Rulemaking counts are based on estimates and require judgment.
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The Regulatory Reform Agenda
Bank Recovery and Resolution Directive (BRRD)
Markets in Financial Instruments Directive (MiFID)
Money Market Funds
Leverage Ratio
Securitization/Risk Retention
Single Counterparty Credit Limits
Fundamental Review of the Trading Book
Mortgage/ Government-sponsored enterprise (GSE) Reform
Long Term Debt Requirement
Short-term Wholesale Funding
Net Stable Funding Ratio (NSFR)
Interest Rate Risk in the Banking Book
Volcker Rule
Title II
Title VII
European Market Infrastructure Regulation (EMIR)
Basel III
Capital Requirements Directive (CRD IV)
Liquidity Coverage Ratio (LCR)
Policy ImplementationPolicy completionNew/ Developing policies
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Capital and Liquidity Improving the banking sector’s ability to absorb losses arising from financial and economic stress Ensuring banks hold sufficient liquid assets to survive an acute liquidity stress and prevent over-reliance on
short-term wholesale funding
Improving the banking sector’s ability to absorb losses arising from financial and economic stress Ensuring banks hold sufficient liquid assets to survive an acute liquidity stress and prevent over-reliance on
short-term wholesale funding
Securitization Enhancing capital requirements and market standards for originators and investors to improve the strength
and safety of securitization markets Enhancing capital requirements and market standards for originators and investors to improve the strength
and safety of securitization markets
Data Reforms related to data quality, risk management, regulatory reporting, data security, privacy and data use Reforms related to data quality, risk management, regulatory reporting, data security, privacy and data use
Consumer Protection (Non-Mortgage Related)
Expanding regulatory oversight of the design, pricing, marketing, sale, and distribution of consumer financial products
Expanding regulatory oversight of the design, pricing, marketing, sale, and distribution of consumer financial products
Bank Structure Restricting banks from undertaking certain types of market activities, and insulating retail banking from
wholesale banking (i.e. Volcker) Restricting banks from undertaking certain types of market activities, and insulating retail banking from
wholesale banking (i.e. Volcker)
Money Market Funds Addressing the susceptibility of money market funds to runs and preventing a repeat of 2008 events Addressing the susceptibility of money market funds to runs and preventing a repeat of 2008 events
OTC Derivatives Enhancing pre- and post-trade transparency, promoting the use of electronic trading venues and central
clearing, and bolstering capital and margin requirements Enhancing pre- and post-trade transparency, promoting the use of electronic trading venues and central
clearing, and bolstering capital and margin requirements
Shadow Banking Credit intermediation that involves entities and activities outside the regular banking system, and raises
systemic risk concerns, in particular by maturity/liquidity transformation, leverage and flawed credit risk transfer, and/or regulatory arbitrage concerns
Credit intermediation that involves entities and activities outside the regular banking system, and raises systemic risk concerns, in particular by maturity/liquidity transformation, leverage and flawed credit risk transfer, and/or regulatory arbitrage concerns
Market Structure(Non-OTC Derivatives)
Includes technology advances and innovation, marketplace and post-trade fragmentation, cost containment, fluctuating trading volumes and volatility, and the need to deliver and enhance transparency industry-wide
Includes technology advances and innovation, marketplace and post-trade fragmentation, cost containment, fluctuating trading volumes and volatility, and the need to deliver and enhance transparency industry-wide
Mortgages Reforming the nation's housing finance system Reforming the nation's housing finance system
Too Big to Fail Ensuring the resolvability of systemically important financial institutions, including drafting living wills Ensuring the resolvability of systemically important financial institutions, including drafting living wills
Fiduciary Standards Proposals to standardize the care that investors receive from financial professionals, whether financial
advisers or broker-dealers Proposals to standardize the care that investors receive from financial professionals, whether financial
advisers or broker-dealers
Top 12 Regulatory Policy Issues for JPMC3
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Considerations as Regulatory Reform Moves to the Next Phase4
Management decision-making vs. regulator decision-making
Bond holders vs. shareholders/derivatives counterparties
Simplicity vs. complexity
Home vs. host >>> holding companies vs. subsidiaries
Push in vs. push out >>> ring-fencing vs. universal banking
Consistency vs. gold-plating
Banks vs. the shadows
Core vs. non-core
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