Week InReview

On the Fed's plan to reduce its balance sheet over time

"It seems reasonable to think that the Fed's withdrawal from the agency MBS market will increase volatility and risk premiums. Traders bored by the markets should get excited."

Fri Oct 6, 2017
Let's recap
In case you missed it . . .
SEC and DOL 'can cooperate and get there, I believe' on a fiduicary rulemaking. 'The devil is in the details, and we're working on it.' (Oct 4)

Questions over breach could delay rollout of CAT financial markets database (Oct 4)

MiFID II: Definitive list of asset managers that will pay for research
How asset managers will pay for research (updated Oct. 3)

SEC promulgated a final rule requiring open-end investment companies to establish a liquidity risk management program to reduce the risk that funds will be unable to meet their redemption obligations and to mitigate dilution of fund shareholder interests (Oct 2)

Regulators disagreed sharply on freeing AIG of federal oversight
Some policymakers questioned whether Friday's vote was legal, documents released Monday show (Oct 2)
The Cyber Cafe
Cybersecurity news every Friday
Hackers target weakest links for insider trading gain
"Sun Tzu wrote in 'The Art of War' that attackers avoid surfaces and flow to gaps like water flowing down hill," said Nate Fick, chief executive of cyber security company Endgame. "The banks are the surfaces and the SEC was a gap."

6 fresh horrors from the Equifax CEO's congressional hearing
The initial drama over Equifax's September data breach  has mostly subsided, but the actual damage will play out for years.  
- Wired

SEC forensics unit sought resources, cyber training ahead of 2016 hack
In August 2016, just two months before the U.S. Securities and Exchange Commission discovered its corporate filing system had been hacked, the SEC's internal watchdog, Carl Hoecker, received a plea for help from his new forensics investigative unit.
Swaps rules had "unintended consequences"
Must be optimized: CFTC's Giancarlo
(Oct 3) -- In order to optimize regulations put in place after the 2008 financial crisis, the Commodity Futures Trading Commission has a lot of work to do, CFTC chair Chris Giancarlo said at a George Washington University forum. Some highlights:
  • Rules that govern derivatives clearing and trading had some "unintended consequences."
  • Post-crisis rules on clearing have been more successful than rules for swaps execution. 
  • CFTC needs collaboration with European colleagues on cross-border rules
  • Financial Stability Oversight Council has been too focused on labeling firms as systemically risky and should take a "broader view."
Binge reading disorder
Hand-curated, chosen with love.
Debt keeps rising and nothing bad happens
Economists are stumped.

Why futurist Ray Kurzweil isn't worried about technology stealing your job
The tech visionary  thinks, in the long run, that A.I. will do far more good than harm.

Three in 10 institutional investors make more than 50 ETF trades a month
Study that covered 210 institutions worldwide found around 30 percent of institutions traded ETFs more than 50 times a month, but that proportion rose to 42 percent in Europe; Asian fund managers say they trade ETFs 10 or fewer times a month.
- Financial Times