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Fed Approves Final Rule to Implement Changes to Market Risk Capital Rule

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According to the press release, “The Federal Reserve Board on Thursday approved a final rule to implement changes to the market risk capital rule, which requires banking organizations with significant trading activities to adjust their capital requirements to better account for the market risks of those activities.

The final rule implements certain revisions made by the Basel Committee on Banking Supervision to its market risk framework between 2005 and 2010. The final rule will better capture positions for which the market risk capital rule is appropriate, reduce procyclicality in market risk capital requirements, enhance sensitivity to risks that are not adequately captured by the current regulatory methodologies, and increase transparency through enhanced disclosures.

The final rule does not include those aspects of the Basel Committee’s market risk framework that rely on credit ratings. Instead, the final rule includes alternative standards of creditworthiness for determining specific risk capital requirements for certain debt and securitization positions. These standards are consistent with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, under which all federal agencies must remove from their regulations references to, and requirements of reliance on, credit ratings.

The final rule applies to bank holding companies and state-chartered banks that are members of the Federal Reserve System. Separately, on Thursday the Board proposed to apply the market risk capital rule to savings and loan holding companies that meet the thresholds described in the final rule.

The final rule is effective January 1, 2013.”

Read more: Federal Reserve Board Press Release

Saudi and Other Gulf Country Bonds to Join JPMorgan Emerging Market Bond Index

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In a boost for Gulf-based debt, JPMorgan is adding their debt compositions to two influential emerging market bond indexes. These emerging market indexes are the most widely tracked among asset managers in the industry. Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, and Qatar are being added to the J.P. Morgan EMBI Global Diversified Index and the EMBI Global, starting January 31, 2019. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Central Bank of Nigeria Reveals Plan for New National Micro-Finance Bank

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The Central Bank of Nigeria has announced plans for a new national micro-finance bank. The proposed bank will promote small and medium enterprises.

CBN’s governor, Godwin Emefiele, noted that the bank will partner with the Bankers Committee, the Nigeria Incentive-based Risk Sharing System for Agricultural Lending, and the Nigerian Postal Service. Emefiele laid out the vision for the bank in his remarks in Abuja: “The bank will serve as an efficient channel for the disbursement and monitoring of key intervention funds by the CBN.” Nigeria’s micro-finance bank will be focused on meeting financial inclusion targets, promoting financial stability within the country, and fostering widespread economic growth.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Mergermarket Gets Ready to be Sold

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Private equity firm BC Partners hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to advise on the sales of Acuris. Acuris is a collection of financial news and data sites, which includes Mergermarket, Dealreporter, and Debtwire. In 2017, BC Partners sold around a 30% stake in GIC Private Limited.

Before the rebranding to Acuris, Mergermarket was part of The Financial Times Group until 2013 when it was sold off to BC Partners.

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