News & Opinion

US Congressman Patrick McHenry recently sent a letter to Federal Reserve Chair Janet Yellen criticising the Fed’s participation in setting global banking rules of conduct and asserting that standards are agreed in opaque settings. But standardisation lowers business costs in finance as in manufacturing – for American banks and investors as well as their international counterparts. A common set of rules for the global financial industry is just a matter of common sense, argues Thomas Murray.

Institutions designed to provide stability have become the system’s linchpins.

Thomas Murray was founded 24 years ago to assure that investors’ property is respected by custodian banks. This was a time when institutional portfolios were spreading investments across multiple jurisdictions, a trend that has accelerated over this past quarter century. The firm’s remit widened to cover the spectrum of post-trade services, always with the same focus on investors’ safety and rights. Shareholder rights are, in fact, central to the financial system, and so also the key focus of Thomas Murray’s work.

Shareholder rights are a critical economic concern: when the members of the public are asked to hand over hard-earned savings as an investment in a corporation, whether in a stock or a bond or another financial instrument, the managers of that enterprise have an immediate obligation to handle that money fairly and honestly. Without trust in proper conduct by those managers in growing the enterprise such that value is created, we will not have the investment or capital formation (or jobs, or goods and services!) that our societies need.

On 28 November 2016, we managers at Thomas Murray were concerned to see the publication of:

COM(2016) 856 final 2016/0365 (COD)

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, and (EU) 2015/2365

We understand that this is a first legislative draft, and write in the hope that it will be very significantly amended.

Given its historic assessments of cash and settlement questions, Thomas Murray works closely with central banks in the field of payment systems. It has recently been looking into new requirements in this area, the implications of which are worth sharing with the capital markets public.

Pages