News

Current Articles | RSS Feed RSS Feed

FDIC Backs Rules Requiring Lenders to Keep Stakes in CLOs

By Clea Benson
Published October 21, 2014 Bloomberg

Lenders will have to keep stakes in mortgages and highly leveraged corporate bonds they package for sale to investors under measures approved by U.S. regulators to rein in risky credit practices.

The interagency rule adopted by the Federal Deposit Insurance Corp. today drops a requirement that banks retain part of mortgages with down payments of less than 20 percent, a proposal that drew protests from bankers and consumer groups when it was proposed in 2011. At the same time, managers of collateralized loan obligations or their underwriters will have to hold at least 5 percent of the debt they package or sell.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

J.P. Morgan Fined by EU Regulators Over Rate Rigging, Operating Cartel

By Tom Fairless
October 21, 2014 The Wall Street Journal

J.P. Morgan Chase & Co. was fined a total of more than €72 million ($92 million) by European Union regulators Tuesday for rigging a benchmark interest rate and operating a separate cartel for Swiss franc derivatives, marking the latest phase in an EU crackdown on alleged market abuse by financial institutions.

The European Commission, the bloc’s central antitrust regulator, said J.P. Morgan and Royal Bank of Scotland Group PLC had colluded between March 2008 and July 2009 in an attempt to rig the Swiss Franc London interbank offered rate, a benchmark interest rate.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Buy-side Firms Seek Margin Flexibility via CSA Changes

By Peter Madigan
October 21, 2014 Risk

End-users extending eligible collateral under credit support annexes, says Himco's Griffin. But cost is so far causing them to shun collateral transformation services

Buy-side firms are preparing for increased margin demands by trying to give themselves extra flexibility, according to John Griffin, head of derivatives and trading in the risk management department at Hartford Investment Management Company.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Investors Have ‘No Incentive’ to Use Swap Futures, Says Wallin

By Kris Devasabai
Published October 21, 2014 Risk

"If we were short of collateral, we would consider a futurised interest rate swap - but we're not," says Alliance Bernstein's Wallin

So-called real money investors have "no incentive" to ditch over-the-counter derivatives in favour of swap futures unless they face serious collateral constraints, according to James Wallin, a senior vice-president at Alliance Bernstein.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Buy-Side Concerns: Liquidity, Transparency

Published October 20, 2014 Markets Media

Market structure issues are percolating to the surface, with potentially far-reaching impacts on dark pools, order routing disclosures, and market making.

Regarding dark pools, the U.S. Securities and Exchange Commission has stated on numerous occasions that’s it’s considering a trade-at rule, similar to that which exists in Canada, that could in theory place dark pools at a competitive disadvantage to lit exchanges.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

CDS Notional Marginally Drops Following Six-Week Increase

By Beth Shah
October 20, 2014 GlobalCapital

Overall credit default swap notional that was reported to swap data repositories last week decreased by 4% from the previous week, according to data from the International Swaps and Derivatives Association. This follows six weeks of a consistent uptick in CDS notional, with a combined increase of 160%.

Overall interest rate derivatives trading that was reported, also saw a marginal decrease of 6% from the previous week.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Did Bank Rules Kill Liquidity? Volcker, Frank Respond

By Yalman Onaran and Dakin Campbell
Published October 20, 2014 Bloomberg Businessweek

Last week’s market gyrations sparked questions about whether bank regulations implemented after the 2008 financial crisis exacerbated price declines by limiting the ability of Wall Street banks to make markets.

As stocks and some corporate bonds fell last week, some hedge-fund managers said higher capital requirements had curbed Wall Street trading desks’ ability to cushion the declines by stepping in to buy securities -- what is known as providing liquidity. Also blamed: the Dodd-Frank Act’s Volcker Rule that limits federally insured banks from speculating on some assets, including corporate debt.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

US Could Hold Key to Solving CCP stalemate

By John Bakie
October 21, 2014 The Trade

US regulators may need to take the first step in resolving cross-border clearing issues with Europe due to pre-existing EU laws, according to an industry association.

The cross-border application of both jurisdictions’ respective clearing rules has become one of the biggest headaches for the industry.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

ESMA Kicks Off NDF Clearing Consultation

By Michael Watt
October 21, 2014 Risk

Timeline for implementation still vague, with options clearing also lagging

The European Securities and Markets Authority (Esma) has launched a consultation on non-deliverable forward (NDF) clearing, though a target implementation date for the final rules has yet to be set.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Regulators Police Swaps Markets

Published October 20, 2014 Markets Media

Manipulation and market abuse have been a long time priority of regulators, including the U.S. Commodity Futures Trading Commission, and now that focus has turned to potential abuse in the swap markets. Such attention creates regulatory risk for swap market participants, where it hadn’t existed previously.

Industry self-regulatory organizations’ most important role will be in examination of the new swap entities, especially swap dealers. The National Futures Association in particular will be looking at swap dealer compliance with the various requirements that have been imposed on dealers.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails
All Posts