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2025-01-01•United States•Federal Reserve Board
The Federal Reserve Board released research analyzing the impact of the Volcker Rule on trading revenue at the 21 largest US trading firms during the COVID-19 crisis. The study found that trading profits aligned with volume-driven fees and widening bid-ask spreads, suggesting the rule contributes to financial stability and reduced market shock exposure.
ResearchTradingPrudential risksFinancial stability and systemic risk
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2025-01-01•Australia•Department of Treasury (Australia)
Australia's Department of the Treasury proposed the Scams Prevention Framework (SPF) after introducing the Scams Prevention Framework Bill 2024. The SPF mandates enforceable obligations on banks, digital platforms, and telecommunications providers to prevent, detect, and disrupt scams, with penalties up to AUD 50 million for non-compliance. It also establishes mechanisms for intelligence sharing and consumer redress, including a single external dispute resolution avenue via the Australian Financial Complaints Authority.
Policy & regulationGuidance & interpretationFraud and scams
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2025-01-01•Europe•European Central Bank
The European Central Bank's Macroprudential Bulletin outlines a framework to assess financial stability risks from leveraged alternative investment funds (AIFs), highlighting hedge funds and liability-driven investment (LDI) funds as most vulnerable. Using AIFMD, EMIR, and SFTR data, it reveals LDI funds' sensitivity to interest rate shocks and significant leverage in relative value hedge funds. Stress tests indicate substantial potential losses for LDI funds under interest rate shifts, with a broader European Systemic Risk Board analysis forthcoming.
Research
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2025-01-01•Europe•European Central Bank
The European Central Bank's Macroprudential Bulletin evaluates the Financial Stability Board's proposed minimum haircut framework for non-centrally cleared securities financing transactions, finding it would reduce leverage among euro area non-bank financial intermediaries. The analysis shows a 13% reduction in leverage on repo, with the largest borrowers experiencing a 42% decrease. The impact varies, with smaller declines for entities at the 75th and 90th percentiles.
ResearchMacroprudential policy and tools