06.05.2015 - EU commodity trading firms face capital punishment
Imposing CRD IV capital rules on trading houses, utilities and oil majors carries huge costs and makes no sense. The notion of imposing capital requirements on firms that trade commodities has been advocated by some financial regulators in recent years. It has also been loudly cheered by banks, which argue non-bank commodity traders enjoy an unfair competitive advantage from not having to set aside regulatory capital against their assets. Since the entry into force of Europe’s Mifid II legislation in July last year, this abstract debate has become very real indeed. Mifid II both removes and narrows exemptions to financial market rules that many commodity trading firms previously benefited from. That means such firms may be forced to comply with CRD IV – the European Union version of Basel III bank capital rules...............................................Full Article: Source
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