Industry watch
Study calls for standardization, simplification and transparency A new global study on alternative channels for capital from shadow banking – a broad activity relating to all nonbank credit intermediation – provides a unique investor perspective on what it will take for these financing vehicles to take hold and support economic growth. ‘Shadow Banking: Policy Frameworks and Investor Perspectives on Markets-Based Finance (Shadow Banking)’ makes recommendations for improved transparency and simplification in securities financing, including management of collateral and reforming the securitization market. The study finds that 55 per cent of professional investor respondents globally identified a need for greater standardization and simplification of issuance structures in securitization markets. Shadow Banking is unique in its global analysis of regulation as it applies to the different entities and activities within the shadow banking system across regions, and its subsequent exploration of risks and investor perspectives. Rhodri Preece , CFA, head of Capital Markets Policy EMEA at CFA Institute and author of the study, commented: “Amid the myriad of shadow banking policy initiatives, the challenge facing regulators is to achieve coherence in the implementation of these measures and to minimize regulatory gaps and overlaps. Shadow banking feeds directly into the capital markets union agenda because there is a desire from the policy perspective for markets-based finance to flourish and deepen the sources of finance available for European companies. Nonbank finance has the potential to deliver many benefits to the financial markets in Europe and indeed globally if the right measures are put in place to stimulate demand and justify investor confidence.” Shadow Banking is informed by a CFA Institute member survey which identifies the perspectives of more than 600 investment professionals globally on the risks and policy priorities surrounding shadow banking. Key findings include: ◉◉ 55 per cent of survey respondents globally identified a need for greater standardization and simplification of issuance structures in securitization markets ◉◉ 47 per cent of survey respondents globally agree that the risks associated with securities financing transactions would be mitigated most effectively with greater transparency, through reporting of transactions to trade repositories and to investors. ◉◉ Improving the coherence of the various regulatory measures related to securitization is important; differences in regulation between Europe, the United States and other jurisdictions may impose additional costs without corresponding benefits to financial stability or investor protection. About ‘Shadow Banking: Policy Frameworks and Investor Perspectives on Markets-Based Finance’
Shadow Banking examines the perimeter of shadow banking – the entities, activities and components within the shadow banking system – and how they vary across different jurisdictions. The analysis covers the United States, the European Union, and Asia-Pacific (focusing on China) and illustrates that the concept of shadow banking differs across regions. In developed financial markets, the term is synonymous with “markets-based finance” such as certain types of investment funds and securitization vehicles, as well as activities such as securities financing transactions, whilst in other jurisdictions, “shadow banking” largely comprises alternative lending channels such as peer-to-peer lending and other forms of nonbank direct loan provision.
Reval hires Mark Johnson as managing director, EMEA sales Reval, a leading global provider of a scalable and integrated cloud solution for Treasury and Risk Management (TRM), has hired Mark Johnson as Reval Managing Director, EMEA sales. Johnson will lead his team in helping companies realize their vision for more effective management of treasury and risk. “Mark is a consummate leader with razor sharp focus,” says Reval executive vice-president of global sales John Mitchell. “He is results driven, a natural team builder, and brings deep experience in financial technology. I am thrilled to have him leading our EMEA team,” Mitchell says. “I’m excited to become part of an organization that has focused on serving the needs of corporates over the past 15 years, and in doing so, has grown into the largest cloud-based SaaS provider in the corporate treasury space,” Johnson says. “Reval is proven to scale from the most basic use case to the most advanced. This makes the future bright for any company wanting to stay competitive using modern treasury and risk technology that can grow with them.” Mark has 20 years of experience in financial technology with strong front line sales and sales management experience. He has held senior roles in the EMEA and APAC regions, most recently as Head of Sales at Broadridge Financial Solutions. Prior to Broadridge, he was Vice President of Global Sales at Asset Control, where he spent nine years building and managing the client base in EMEA and APAC. He became a member of the executive management team at Asset Control and took an active role in securing a new investor for the company in August 2013. Prior to joining Asset Control Mark held senior sales positions at Misys, Rolf & Nolan and Sybase.
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CANADIAN TREASURER
Summer 2015