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Greece Deal Points to Flexible Approach to Bank Rescues in E.U.

By Huw Jones
August 26, 2015, Reuters

European Union rules to shield taxpayers from having to rescue ailing banks should be applied flexibly because of broader economic imperatives highlighted by the latest Greek rescue package, analysts and lawyers say.

That flexibility may mean that European taxpayers cannot be given cast-iron guarantees that they will not be called upon again to bail out banks as during the financial crisis.

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Greek Test for ISDA CDS Definitions

By David Wigan
August 8, 2015, IFR

A possible restructuring of Greek bank debt is set to provide the first test for new credit derivative definitions launched last year after the old contract was deemed unfit for purpose.

A government-led restructuring or bondholder bail-in will trigger new provisions in the 2014 ISDA definitions designed to avoid a repeat of past failures that left buyers of credit protection without proportionate recompense for losses.

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D2LT: 'A-Greek-Ment' - Managing the Uncertainty

July 14, 2015, Automated Trader

Amid one of the worst crises in the EU's history, many financial institutions are still unsure as to the potential legal and financial implications that the exit of Greece - or indeed of any nation from the single currency - may cause. 

Akber Datoo & Simon Leifer, co-partners of D2 Legal Technology, call on financial institutions to urgently review their derivatives contracts to determine the true level of risk exposure and to take remedial action as appropriate. 

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Greek Bank Holiday Sparks Swaps Contract Chaos

By Fiona Maxwell and Catherine Contiguglia
July 10, 2015, Risk

Extended bank closure leaves derivatives payments by end-users in limbo

The extended bank holiday in Greece has made it impossible for derivatives end-users in the country to make payments due on outstanding contracts – leaving dealers and clients scrambling for answers.

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Crazy Volatility From Greece Shatters Confidence in Directional Credit Trading

By Dan Alderson
June 30, 2015, GlobalCapital

The ramping up of tensions around Greece debt over the weekend has brought two days of high volatility in credit markets, but traders say there is little appetite among participants to position in either direction.

Record volatility gripped iTraxx credit indices on Monday, amid Greek capital controls and a call for a referendum on creditor proposals. iTraxx Europe gapped out 14bp to 80bp, before retreating to 76bp, while the Senior Financials basket went 23bp wider to 98bp before ending the session back at 90bp

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E.U. Seeks Transaction Tax as 11 States Meet in Bid to Choose Path

By Rebecca Christie
June 17, 2015, Bloomberg Business

The 11 European nations seeking a financial-transactions tax will meet Thursday in Luxembourg in a bid to decide how to design the measure, according to European Union officials.

Participating states are wrangling over which trades to tax and who should collect revenue, according to planning documents obtained by Bloomberg News. Finance ministers and deputies are next slated to meet in Luxembourg with EU Economic and Tax Commissioner Pierre Moscovici before scheduled meetings of all 19 euro-area finance ministers

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New Framework for Sovereign Defaults

By Elaine Moore
Published August 28, 2014 Financial Times

A group representing more than 400 of the world’s largest banks, investors and debt issuers has agreed a plan for dealing with financially stricken countries and their creditors, in a bid to prevent a repeat of the wrangling that has pushed Argentina into default.

After months of talks convened by the US Treasury in the wake of Greece’s restructuring, global debt experts will on Friday unveil a new framework that could transform the relationship between critically indebted nations and lenders.

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ECB Wins EU Court Ruling to Keep Greek Swap Information Secret

By Stephanie Bodoni and Elisa Martinuzzi
Published February 20, 2014 Bloomberg

The European Central Bank won’t have to disclose how Greece used derivatives to hide its debt after the European Union’s top court quashed efforts to make the information public.

The European Union Court of Justice, in a Feb. 6 decision, rejected a freedom-of-information request by Bloomberg News to access two internal ECB papers, citing procedural errors.

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Factbox: CDS Set to Pay Out if U.S. Stumbles Into Default

By Marc Jones
Published October 9, 2013 Reuters

The credit default swaps investors have bought as insurance against a U.S. government default are expected to pay out if Washington officials allow what many still consider as unthinkable to happen.

In the CDS market, what qualifies for a payout has not always been straightforward because of the different interpretations of what does and does not constitute a default.

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Greece Credit-Default Swaps Prices Offered by Dealers, CMA Says

By Abigail Moses
Published May 29, 2013  Bloomberg

Dealers are offering prices on credit-default swaps linked to Greek sovereign bonds after the contracts paid out last year following a restructuring of the nation’s debt.

It now costs $3.5 million in advance and $100,000 annually to insure $10 million of Greek debt for five years, signaling a 49.4 percent probability of default within that time, according to CMA. The data provider, which compiles quotes from dealers in the private market, has published prices on Greek swaps every day since May 21.

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