News

Top executives of the two largest U.S. derivatives exchanges say regulators must take further steps to align Dodd-Frank Act rules with those of foreign counterparts to avoid oversight splits that could harm markets. 

The Commodity Futures Trading Commission and overseas agencies have a few months to improve coordination before differences hurt business, IntercontinentalExchange Inc. Chairman and Chief Executive Officer Jeffrey Sprecher said in remarks for a House Agriculture Committee hearing where he will testify alongside CME Group Inc. Executive Chairman Terry Duffy.

The cost of credit-default swaps insuring subordinated European bank debt fell to the lowest in three years amid speculation changes to rules governing the securities will devalue existing contracts.

The Markit iTraxx Financial Index linked to the junior debt of 25 banks and insurers declined for a fourth day, dropping 16.5 basis points to 181.5, according to Bloomberg data at 1 p.m. in London.

Commodity Futures Trading Commission investigators are poring over 1 million e-mails and instant messages as part of their price-manipulation probe of a swaps benchmark that helps determine interest rates on everything from annuities to bonds linked to skyscrapers.

Investigators preparing to interview bankers and brokers in the coming weeks are scouring the records collected under subpoena for any evidence that the world’s largest banks and ICAP Plc brokers rigged the ISDAfix swaps rate, said a person familiar with the matter, who asked not to be named because the probe is private. ICAP Chief Executive Officer Michael Spencer said last week that the company’s investigations have turned up no wrongdoing.

European antitrust regulators will decide by June 24 whether to clear an $8.2 billion takeover bid by IntercontinentalExchange Inc for New York Stock Exchange operator NYSE Euronext.

ICE, a derivatives exchange and clearinghouse operator, is making its second bid to buy NYSE in a deal that will give it control of Liffe, Europe's second-largest derivatives market, and boost its presence in the interest-rate futures business.

New rules to regulate derivatives, adopted last week by the Commodity Futures Trading Commission, are a victory for Wall Street and a setback for financial reform. They may also signal worse things to come.

The regulations, required under the Dodd-Frank reform law, are intended to impose transparency and competition on the notoriously opaque multitrillion-dollar market for derivatives, which is dominated by five banks: JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup and Morgan Stanley.

Unless you're employed by a derivatives trading desk at a large bank, here's some good news: The derivatives cabal is slowly but surely headed for a break-up.

The Commodity Futures Trading Commission yesterday approved new derivatives rules required under the 2010 Dodd-Frank financial reform law. They dictate how buyers and sellers must enter contracts, including credit-default swaps and interest-rate swaps, in the $633 trillion market.

Sheila Bair, the hard-charging former director of the Federal Deposit Insurance Corporation, stands at the center of three of the biggest debates in Dodd-Frank implementation.

As someone who knows the FDIC — which is actually the agency that takes down failing banks — she’s in an unusually good position to know whether the law’s resolution authority will work. These are the new powers the FDIC has in Dodd-Frank to impose losses and fail a financial firm (it’s what Barney Frank called “death panels” for financial megabanks). 

After two years of bickering over the construction of swap execution facilities, swaps users and would-be SEFs can finally circle a date on their calendar for when trades will be electronically executed.

With the agency voting the rules into place this week, market participants can home in on early December as the time when all swaps users will be transacting standardised swaps on SEFs.