Halister News

--JOHN LIU

(Bloomberg) -- Bankers Association of the Philippines must form anti-financial crime committee to be headed by a BAP board member with specific mandate to look into financial crime compliance, anti-money laundering, counter-terrorist financing and sanctions screening, group’s former president Lorenzo Tan said in speech at annual meeting late Tuesday in Manila.

• Committee shall identify “loopholes” in existing laws and regulations; lobby with legislators, regulators and banks’ governance boards for needed amendments, said president and CEO of Rizal Commercial Banking
• NOTE: Rizal Bank CEO Offers to Go on Leave Amid $81m Transaction Probe Link
• Need to streamline and standardize industry definition of financial crime terminologies and procedures including know- your-client, politically-exposed-person, high risk client and special category client standards: Tan
• “In close coordination with the Bangko Sentral, the Anti- money Laundering Council, Congress, law enforcement agencies, and all financial institutions; a comprehensive strategy needs to be immediately implemented in order to prevent similar incidents from recurring”
• NOTE: Philippines’ SEC Chairman Seeks Stronger Anti- Laundering Powers Link
• NOTE: Lorenzo Tan succeeded by his brother Nestor Tan, president of BDO Unibank, as Bankers Association President at annual meeting Tuesday

(Bloomberg) -- Recent surge in kiwi overnight implied volatility in excess of underlying volatility environment indicates investors’ uncertainty towards RBNZ policy, Peter Redward, principal at Redward Associates, says in an interview.

• This should be a concern for RBNZ, Redward says
• Cites the Wheeler Surprise Index, an internal model, which examines one-day ATMF implied volatility that covers RBNZ policy announcements, relative to a 20-day trading window
• Since Jan. 2015, the index has risen to around 16%, compared to an average of 9.5% under Governor Wheeler’s tenure which began in 2012
  • Index was 5.1% under previous central bank chief Bollard
• NZD/USD 1-day implied volatility at 17.56 vol vs one-year average at 14.23 vol
• NZD/USD down 0.1% to 0.6669

(Bloomberg) -- BOJ may continue to monitor impact of negative rates on Japan’s economy until April when it releases its quarterly economic outlook, before it potentially expands stimulus further, Bloomberg strategist David Finnerty writes.

• BOJ Gov. Kuroda said earlier this month that he’s not considering lowering negative interest rates further at this time; however, central bank’s quarterly economic outlook could support the case for additional QQE if growth and CPI forecasts are lowered
• Recent data indicate a weak economy: Jan. overall household spending and retail sales continue to drop on y/y basis; 4Q capex growth slowed to 8.5% y/y from 11.2% in 3Q; Jan. headline inflation stayed at 0.0% y/y while CPI excluding food and energy declined to 0.7% y/y from 0.8% in Dec.
• A stronger yen also reduces imported price pressure, which could create headwinds for BOJ to achieve its 2% CPI goal and may spur a shift in its policy stance in near future
• BOJ is forecast to leave the annual rise in monetary base at JPY80t, according to 35 of 40 economists in Bloomberg survey with 4 predicting an increase to JPY90t and one projecting an increase to JPY100t; decision due today
• Policy rate is expected to remain at -0.1%, according to 38 of 40 economists in another Bloomberg survey with two predicting a decline to -0.3%
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.