New European regulation on credit rating agencies will soon come into force. And while everyone is in agreement on the need for improvement, opinion is divided on the best way to achieve this. So will ESMA make a difference?

Regulators are desperate to find a capital instrument that provides a buffer for institutions, but also satisfies investors. Issuance, in a variety of forms, has already begun. But with so many questions still unanswered, have regulators and issuers moved too early?

The US's Foreign Account Tax Compliance Act puts onerous burdens on foreign institutions to capture data about US clients and any clients with ownership of US assets, and to report related tax information to the country's tax authorities. For banks, it is a huge task but they had better do it well, as this is likely to be the first of many such schemes. 

Commerzbank’s bold liability management exercise – the first to address Basel III at both ends of the capital structure – shows that banks need not wait for national and European regulators to finalise minimum capital requirements. It also serves as a possible blueprint for Germany’s other banks to strengthen their capital base.

Since the Greek sovereign debt crisis unfolded, many European politicians have accused speculators of using credit default swaps to bet on sovereign default and thereby intensify a debt event. Research – some by the European Commission itself – has shown that this causal relationship does not exist. Yet there is significant support for action.

As banks prepare for the implementation of Basel III, operational risk management needs to be a key area of focus.

Regulators hope new requirements for retaining economic risk in securitisation transactions will better align the interests of originators and investors. Bankers fear that it will hike costs and capture other transactions.