German Chancellor Angela Merkel was re-elected to a fourth term as head of the government of Europe's biggest economy, but a shift to the right among voters suggests that putting together a ruling coalition could be challenging. Merkel's Christian Democratic Union and its sister party in Bavaria remained the biggest voting bloc in parliament, but the extreme-right Alternative for Germany became the third-largest party in the Bundestag.
The UK and EU must agree on how Britain will settle its financial obligations to the EU before British Prime Minister Theresa May's proposal for a two-year post-Brexit can be discussed, said Michel Barnier, the EU's Brexit negotiator. Until there is significant progress on a financial agreement and other key issues, the EU will refuse to talk about a transition period after Brexit, he said.
Japanese Prime Minister Shinzo Abe instructed his Cabinet to start putting together an economic stimulus package that calls for $17.8 billion in spending. He said the initiative will emphasize encouraging business investment, extra funding for education and helping to cover the cost of child care.
A survey of central banks worldwide found that 20% expect to be using blockchain technology by 2019, and 40% expect to develop applications within 10 years, according to a study by the Cambridge Center for Alternative Finance. More than 80% said they are conducting research to create their own bank-issued cryptocurrency.
The strengthening eurozone economy has prompted the Belgian, Dutch and Irish governments to sell significant shares in banks, with Spain expected to follow.
The Irish Stock Exchange is said to be considering alliances with exchanges in the eurozone and elsewhere to take advantage of increased business opportunities that Brexit will present. ISE stressed its independence in the past, but now appears to be adjusting its position.
The Bank of England said it will release the results of its stress testing of seven major British financial institutions on 28 November. Among the scenarios examined in the tests is a review of the consequences of the UK and global markets being hit with shocks simultaneously.
The City of London Corp. is calling on UK leaders to scrap a proposal to implement a tax on financial transactions, saying it would put the competitiveness of London's financial hub at risk. "A financial-transactions tax, however described, would be a unilateral policy which would weaken our hand and undermine our competitiveness," said Catherine McGuinness, the group's policy head.
Two European banking executives have warned that the Financial Stability Board's rules on total loss absorbency capacity contain numerous debatable points and may be unable to prevent a severe market correction in the event of a bank bail-in. Speaking at a conference, the bankers urged regulators to resolve the questionable issues.
Stock exchanges across Europe are raising concerns that rules on systematic internalisers, embodied in Europe's revised Markets in Financial Instruments Directive, will give an unfair advantage to trading venues run by high-speed trading firms and banks. Some say the rules will encourage an increase in dark trading.
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