This week's risk management news includes FSS' tightening of credit card rules, RBI's punishment of 19 banks for breaching derivatives guidelines, and FDIC's proposed regulations for large banks.
April 27, 2011 | The Asian Banker Editor
FSS to increase credit card supervision
The Financial Supervisory Service, South Korea’s financial regulator, is planning to establish a new unit to monitor credit card companies. The regulator has decided to do so in a bid to reduce the issuance of risky loans issued to customers with poor creditworthiness, amidst concerns that this practice could lead to a massive default crisis.
RBI fines 19 banks for contravening guidelines on derivatives
The Reserve Bank of India, the country’s central bank, has fined 19 banks, including ICICI Bank, HDFC Bank, HSBC and Deutsche Bank as well as the State Bank of India for breaching its guidelines on derivatives. The banks have been found guilty of selling inappropriate products to businesses, selling products with determining the underlying exposure and selling derivatives to companies that do not have adequate risk management structures.
The complete list of banks fined can be accessed here.
FDIC proposes stricter regulations for big banks
The Federal Deposit Insurance Corporation (FDIC) has proposed that large US-based banks separate their investment banking units from their general operations. Sheila Bair, chairman of the US-based regulator, is of the opinion that the investment operations of large banks should be on standalone liquidity and capital. This proposal may affect Citigroup, Bank of America and JP Morgan Chase which combine both their retail and investment banking operations.
Re-disseminated by The Asian Banker
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Risk And Regulation Working Group
