John’s Corner

Sat, 30/06/2012

John Gubert calls for a different approach to regulation

For some time, I have criticised the quantum and complexity of regulation. I now feel somewhat beleaguered, post the announcement of losses on hedging transactions at a major US bank. After all, many in the US are stressing the need for the Volcker rule to avoid such risks. Others even think that somehow trading should be done away with for the benefit of all mankind.

Wed, 30/05/2012

John Gubert on where the EU got it right ... and wrong ... with the new CSD directive draft.

The EU is looking to bring in a new directive on CSDs. As often is the case, the document produced is thorough and thoughtful, but that does not necessarily mean that it is entirely directionally correct. Ever since a stream of research showed, hardly surprisingly, that it was cheaper to operate a CSD in the US than through the multiple infrastructures in Europe, there has been an almost total denial of the reasons for Europe’s fragmentation and the US consolidation.

Mon, 30/04/2012

John Gubert is worried about over-legislation

I have long been a critic of the length and complexity of recent regulation and other missives from the Authorities. The worst of the global offenders are the 848 page long Dodd Frank Act and the 116 page long T2S Framework Agreement. As far as complexity goes, the former wins with its sheer opacity whilst the latter scores highly with the incredible use of difficult to follow cross referencing throughout its 7 chapters, 54 articles and 13 schedules. I am relieved that I am not alone and note that Sheila Blair, the former FDIC head, has admitted that at least the Volcker rule (itself a subset of the Dodd Frank legislation) is too complex and needs to be simplified!

Fri, 30/03/2012

John Gubert on the conflict between competences and communication

We are just completing a review of our risk policies in UniCredit GSS. The challenge we faced, as indeed I have faced in similar exercises in my previous organisation or as Chairman of the Euroclear Risk Committee a few years back, is the conflict between a need for completeness and a need for communication

Wed, 29/02/2012

John Gubert asks whether RFPs are worth the effort

Custodians of all varieties, whether global, regional or single country sub custodians, spend a huge amount of effort on RFP’s, and then if successful, on legal documentation. This work is costly, using up scarce skilled resources and often requiring external advice. But is it really value added?