CSRC launches innovative officials rotation (re-write)

Recently, I read an article  from China Economics & Finance (Caixin Media), named as A New Spin on Regulation. It mainly talks about how the China Securities Regulatory Commission (CSRC) has begun rotating officials to break up vested interest groups and clear way for innovation.

Last October, Guo Shuqing became CSRC's Chairman, who has ever since advocated less administrative interference in the country's securities markets .

"A key element in Guo's package of proposed reforms would replace an approval-based stock issuance system with a registration-based mechanism," staff reporter Lu Yuan writes on the China Economics & Finance. "But vested interests stand in the way of his overhaul plan."

The method is to replace officials occupying powerful positions at centre stage with those from behind the scenes. This means the nine key deparments officials would be moved to secondary departments, meanwhile, the vacancies would be filled by officials from outside the key departments.

The rotation began in early March, additionally, personal wishes would be considered during transfers.

One example saw Li Liang, a Columbia master graduate who also holds a Ph.D from the China Academy of Social Sciences, become the party Committee of China within CSRC. "Li's move is only one of the many for the CSRC recently and is intended to dislodge senior officials from posts that are vulnerable to exploitation and corruption." Lu writes.

"This time, among all regulatory bodies, the CSRC has carried out probably the most thorough job rotations," one of CSRC's officials told Lu.

According to the publication, CSRC does rotate its officials. Throughout the years, the regulatory body managed several rounds of executive job rotations, though it was deemed a procedure which has not so far affected the protected interests of key departments until the recent changes. 

CSRC employs more than 3,000 people nationwide, with 800 residing in Beijing.

Greece future (re-write piece)

The BBC Business reveals that Greece will have a fresh election on 17 June, due to the failure to form a coalition government on 6 May.

The event raised concerns over Greece's membership within Eurozone.

Tuesday's election showed that there was no party to win a parliamentary majority. Since then, there has been deadlock over whether Greece should continue to go ahead with the austerity measures required by an international bailout agreement.

The BBC reports that recent opinion polls suggest the leftist bloc Syriza, which opposes the tough bailout conditions, would win a new election, but would still not gain enough for a parliamentary majority.

EU officials were in talks concerning Greece's future – if Greece elects an anti-bailout government in June, the country would exit Eurozone.

The rest of the markets has also been affected by the crisis, which has seen Asian stocks are pushed lower on Wednesday and oil prices are knocked down.

Additionally, the uncertainty over the Euro has also sparked concern over a run on the Greek banks.

European leaders indicate that they will cut off funding for Greece, if the country rejects the bailout agreement sealed in March, and there would be no further discussion on its bailout.

Christine Lagarde, the head of the International Monetary Fund, talked about the possibility of orchestrating an “orderly exit” for Greece from the eurozone.

“It is something that would be extremely expensive and would pose great risks, but it is part of options that we must technically consider.”

The newly elected French president Francois Hollande also expressed his opinion that he would prefer Greece to remain in the Euro.

JP Morgan trading loss story (re-write)

JP Morgan Chase's shares value has plunged by 9% after its trading loss amounting to $2 billion (£1.2 billion), which subsequently resulted in a notch loss from a leading rating agency, the BBC Business reveals. 

It is believed that the loss is related to a London-based credit trader Bruno Iksil, who amassed an outsized position which hedge funds bet against. The bank has ruled out the strategy used in the loss trades is proprietary trade, which is prohibited by the so-called Volcker rule.

The regulators are now finalising Volcker rule, and are also pressed ahead to ensure the supposed “hedging” by JP Morgan would be covered in an expansive clamp down.

The head of SEC Mary Schapiro told the BBC that “all the regulators are focused on this”.

According to the Reuters, the bank's chief executive Jamie Dimon said it was not clear whether the bank had broken any law or violated any rules. “We've had audit, legal, risk, compliance, some of our best people looking at all of that.”

The losses prompted Richard Fisher, the President of Dallas Federal Reserve Bank, to call for the break-up of the top five U.S. Banks, and to say he is worried the biggest banks do not have adequate risk management.

Added to that, the debacle also undermines confidence in other U.S. banking shares, with Citygroup closing 4.2% lower, Goldmans Sachs falling 3.9% and Morgan Stanley losing 4.2%.

According to the BBC, Fitch downgraded the bank's debt from A plus to AA minus, and forecasts another downgrade could be possible in the next six months, even though the scale of the loss was “manageable”.

JP Morgan was believed to be in a much healthy condition than many other banks after avoiding risky investments in the 2008 financial crisis.