UK Toughens Remuneration Rules – Profit & Loss (free story)
The UK’s Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA) have jointly released tougher rules on remuneration in financial services, including an extension of the period during which bonuses can be clawed back. “Today’s rules are part of a wider package that is being announced over the summer to embed an accountable culture in the City,” says Martin Wheatley, CEO of the FCA. “Our rules will now mean that senior managers face claw back of bonuses for up to 10 years, if misconduct comes to light.”
Concessions from Athens Keep Hopes of Greece Bailout Deal Alive – Financial Times (subscription)
Greece on Monday kept alive hopes of an eleventh-hour deal with creditors to avoid default after Athens presented its first substantial concessions in months of fruitless negotiations.
Euro Falls as Investors Look Past Greece Bailout Talks – Financial Times (subscription)
Growing market confidence that a deal to resolve Greece’s stand-off with its creditors is imminent left investors looking past the talks and towards a US rate rise, leaving the euro under pressure on Tuesday. Fears about the turmoil that a Greek exit from the euro could have caused eased a little, giving investors a clearer line of sight to position for the Federal Reserve’s first action to take US interest rates off historic lows.
FX Market Readying Systems on Potential Greek Spasm – Bloomberg
The operator of a key piece of the foreign exchange market’s financial plumbing says it’s readying its systems for potential spasms in trading if Greece leaves the euro. “It makes sense to prepare your systems for all eventualities,” said Dino Kos, the head of global regulatory affairs at CLS Group Holdings AG. “We are certainly doing so at CLS.”
Clearing Houses Reduce Risk, They do not Eliminate It: Goldman Sachs’ Gary Cohn – Financial Times (subscription)
What innovation has done most to reduce risk in capital markets in the past decade? A leading contender is surely the wider use of “central clearing”, which entails a single institution acting as the buyer to every seller and the seller to every buyer of a particular kind of security. Since these long and short exposures cancel each other out, it should be impossible for a clearing house to run into trouble if the market moves against it; its sole risk exposure is to the credit of its counterparties.
Foreign Exchange Hedged ETF Demand Slows as Volatility Declines – Bloomberg
Demand for exchange-traded funds that provide investors with protection against swings in exchange rates is slowing as volatility in currency markets eases.