News

Italy, Other States, Raise Objections on Financial Transaction Tax

By Francesco Guarascio
November 10, 2015, Reuters

Italy and other European states have expressed reservations on the scope of a common financial transactions tax (FTT) although some progress has been made on narrowing differences, Italy's finance minister said on Tuesday.

Germany and France proposed the FTT in 2012, with the euro zone debt crisis raging, as a way of correcting excesses in the financial sector that was blamed for the worst market turmoil and decline for decades. It has been debated ever since.

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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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Dealer Prices on Greek Credit Swaps Reappear as Bonds Rally

By Katy Burne
Published October 18, 2012 WSJ The Euro Crisis

Banks are quoting prices for credit-default swaps on Greek government bonds for the first time since the country restructured its debt in March, while there are hopes Greece is close to securing fresh aid.

While the derivatives, which act like insurance against a default, haven’t traded since March, some banks recently began quoting prices in an effort to revive the market, according to people who had received the prices

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Spanish swaps contracts raise concerns

By Christopher Whittall
Published August 11, 2012 International Financing Review

The prevalence of local law derivatives contracts might cause serious headaches for international lenders if Spain were to exit from the euro. Greece’s high-profile restructuring in March and subsequent difficulties in complying with bailout programmes has put it top of the list of potential countries dropping out of the single currency. But while a return to the drachma could spell disaster for holders of Greek bonds and loans, the lack of a local derivatives contract has meant that international banks are less concerned about swaps with Greek counterparties.

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ECB Could Take Haircut on Greek Bonds in 'Last Chance' Plan

By Roland Gribben
Published July 29 2012 Telegraph

Intensive discussions now under way among EU policy-makers involve the European Central Bank and a number of central banks taking a significant write-down on their Greek bonds as the price for avoiding a eurozone break-up and losing its weakest link.

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Derivatives Desks Prep for Greek Exit

By Christopher Whittall
Published May 19 2012 International Financing Review

Major dealers have been furiously scanning through the legal contracts governing their derivatives trades with Greek counterparties, as fears of Greecepulling out of the eurozone have intensified during the past week.

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Credit-Default Swaps Work (See Greece); Eyes in the Sky vs. Privacy

By Jonathan Alter
Published March 15 2012 Bloomberg Businessweek

As it wrestled with Greece’s debt crisis for the past two years, the European Central Bank took pains to avoid triggering credit-default swaps written on Greek bonds. But on March 9, Greece forced payouts on swaps contracts when it required all private bondholders to forgive more than €100 billion ($130 million) of debt as part of the biggest sovereign-debt restructuring in history.

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Greece's Credit Non-Event

Published March 12 2012 Wall Street Journal

So after all the weeks of angst and protest, Greece was able to restructure its debt. But it couldn't do so without imposing losses on unwilling creditors, and so late Friday the International Swaps and Derivatives Association declared that Greece had defaulted at last, triggering among other things credit default swaps on Greek debt. The world did not end.

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An Architect of a Deal Sees Greece as a Model

By Landon Thomas Jr.
Published March 6 2012 New York Times

Now that Greece is close to completing the largest bond write-off on record, should other debt-plagued nations in Europe follow its lead?

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Dallara Says Debt Swap Is on Track

By Alkman Granitsas
Published March 04 2012 Wall Street Journal

The organizers of Greece's proposed debt-restructuring plan have moved to offset doubts about whether enough banks will voluntarily agree on March 8 to a loss-making debt swap to keep the country out of default.

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Euro Zone Clears Way for EU Decision on Greek Deal

By Matthew Dalton and Andrea Thomas
Published March 1 2012 Wall Street Journal

Euro-zone finance ministers said Thursday they were ready to give Greece money from a new bailout — provided a bond swap that will cut the debt Greece owes its private creditors by more than €100 billion goes according to plan in the coming week.

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ECB May Wait for Investor Deal on Greek Swap

By Jeff Black and Jana Randow 
Published February 1 2012 Bloomberg

The European Central Bank is likely to refuse to show its hand on how it will help cut Greece’s debt burden until investors and the government have agreed to a deal, said economists from ING Group to Deutsche Bank.

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Europe bond dive rooted in Greek CDS deal

By Deborah Levine
Published November 18 2011 MarketWatch

The grand deal struck last month to keep Greece from default had an unintended consequence that’s encouraged investors to dump the debt of Italy, Spain and other countries, causing yields to spike, bond analysts say.

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