I have a lot of respect for the Federal Reserve and the people that work there, but I have to ask: is it just another example of a dysfunctional regulatory framework?
The US Federal Reserve has moved to ban Mark Johnson, global head of spot FX trading at HSBC, and Stuart Scott, the bank’s former head spot trader for EMEA.
According to court documents, the Fed argues that both mens’ continued service or participation in the conduct of the affairs of any relevant depository institution posed, poses, or may pose a threat to the interests of depositors of such institution, or threatened, threatens, or may threaten to impair public confidence in such institution.
The US Federal Reserve increased interest rates by a quarter point today, also indicating that it now expects to increase rates three more times in 2017.
“In view of realised and expected labour market conditions and inflation, the committee decided to raise the target range for the federal funds rate to half to three-quarters per cent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labour market conditions and a return to 2% inflation,” says the Federal Open Market Committee in a statement issued today.
The Federal Reserve has announced two enforcement actions against Deutsche Bank that require the bank to pay a combined $156.6 million in civil monetary penalties.
The bank will pay a $136.9 million fine for “unsafe and unsound practices” in the FX markets, as well as a $19.7 million fine for failure to maintain an adequate Volcker rule compliance programme.
The Fed says it found deficiencies in the Deutsche’s oversight of, and internal controls over, FX traders and that the firm failed to detect and address that its traders used electronic chat rooms to communicate with competitors about their trading positions.
The Federal Reserve Board has requested public comment on a proposal for the Federal Reserve Bank of New York, in cooperation with the Office of Financial Research, to produce three new reference rates based on overnight repurchase agreement (repo) transactions secured by Treasuries.
These rates will replace the existing London Interbank Offered Rate (Libor) mechanism as the benchmark for interest rates and the new proposed benchmarks are a Tri-party General Collateral Rate (TGCR), a Broad General Collateral Rate (BGCR), and a Secured Overnight Financing Rate (SOFR).
The US Federal Reserve raised interest rates for the third time this year on Wednesday, citing an improving economy and labour market.
At the end of the Federal Open Market Committee’s (FOMC) two-day meeting, it was announced that the benchmark interest rate would be increased by 25 basis points, to between 1.25% and 1.5%.
“In view of realised and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-1/4 to 1‑1/2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation,” said the FOMC in a statement today.
The latest round of FX turnover data from a group of the world’s FX Committees show that volumes dipped slightly in October 2018 compared to April last year when they hit a new high mark. Average daily reported UK FX turnover was $2.6 trillion per day in October 2018. Although this is the third largest turnover figure on record, it represents a 4% decrease from the record high of $2.7 trillion reported in April 2018. Turnover by instrument was mixed in the UK. Spot increased for the third successive reporting period, gaining 3% compared to April 2018 to reach $775 billion traded per day. This represents a 14.5% year-on-year increase in volume.