Reacting to concerns from London's financial firms about her plans for a hard Brexit, British Prime Minister Theresa May said she appreciates the importance of the UK financial sector. "I value financial services in the City of London, and all that revolves around it is important to us too," she said.
Steven Mnuchin, nominee for US Treasury secretary, may have caused surprise and disappointment on Wall Street on Thursday when he said that although he favored the Volcker rule, it was overly complex and needed refinement. Mnuchin also suggested that a "21st-century Glass-Steagall" Act might be worth considering.
The European Central Bank decided to leave its relaxed monetary policies unchanged Thursday and at a news conference afterwards, President Mario Draghi rejected the idea of changing the central bank's policies in response to accelerating inflation in Germany. He urged the ECB's critics in Germany to "just be patient".
Bank executives at the World Economic Forum in Davos, Switzerland, have been quietly expressing their opinions on the post-Brexit future of London's clearing sector. Some executives expect that clearing of euro-denominated derivatives will remain in the UK, but others are concerned about efforts from France and Germany to lure clearing away.
Leading investment banks such as Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup are reporting exceptionally high revenue in the fourth quarter. Several banks cited a general improvement in the market environment and an upswing in client activity as main causes for the improvement.
Goldman Sachs Group is having second thoughts about its planned large-scale shifting of jobs to London because of the UK's vote to pull out of the EU, said CEO Lloyd Blankfein. "We're slowing down that decision to avoid having to move businesses twice," he said.
Market participants and national regulators are raising concerns and questions about the EU's position-limit rule under the revised Markets in Financial Instruments Directive. "Many questions are technical in nature, but with potentially major ramifications," said Jasper Jorritsma of the Netherlands Authority for the Financial Markets.
The credibility of research conducted by the Basel-based Bank for International Settlements has come under fire from an independent report commissioned by the institution. According to the report, some BIS researchers said they were pressured to support and express the "house view" of the bank, which may put at risk the credibility and relevance of their findings.
Analysts are under increasing pressure to arrange private meetings between clients and executives of publicly traded companies, but the situation can cause conflicts of interest.
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