Capital Markets Advisors

by George M. Bollenbacher On September 16th the New York Court of Appeals will hear arguments on a case that is rather well known in commercial banking circles, but perhaps less so in the swaps markets. As it turns out, the case may have significant implications for swaps market participants, including clearing houses. The case itself, Motorola Credit Corp v. Standard Chartered Bank, nominally involves the question of whether a… Read More »

Monday, August, 18th, 2014 by GEORGE BOLLENBACHER Everyone is aware of the many and momentous changes in swaps regulation across the globe, and most of us have read predictions by various authorities (who may or may not have an axe to grind) on how the market will change as a result of regulations. However, there is precious little actual statistical evidence of how the market is changing, partly because the… Read More »

Tim Cave and Anish Puaar | 07 Aug 2014   The proposed European financial transaction tax may be collected through a central industry utility, raising the possibility of using existing market infrastructure such as trade repositories to gather the levy. The creation of a “dedicated tax collection utility” is one of four options listed in a European Commission document on the FTT’s “collection methods and data requirements”. The document, seen… Read More »

Move Seen as Preparation for Fed Eventually Raising Interest Rates Katy Burne Aug. 6, 2014 1:21 p.m. ET   CME Group Inc. is raising margin requirements for most customers using its interest-rate swaps-clearing services, the latest sign of financial institutions girding for possible rate increases over the next year. The adjustments, which took effect Monday, mean that clients whose portfolios call for more margin under the new parameters will have… Read More »

Traders Magazine Online News,  August 4, 2014 John D’Antona Jr.   With more trading and risk in the swaps market, clearinghouses should be more open and disclose their operating procedures for the benefit of the marketplace. That’s the viewpoint of market consultancy Tabb Group, which said in a recent report that the concentration of risk among central counterparties in the new global market structure must be accompanied by a proportional… Read More »

Aug 01, 2014 Cross-margining offered by Europe’s biggest clearing houses has been called into question by clearing members, amid concerns competition in this area will increase risk in the derivatives market. Clearing firms have highlighted that a potential race to the bottom could lead to under-collateralisation and risk cross-contamination between default funds. Under the new regulatory regime of centrally cleared swaps, firms are required to post collateral as initial margin… Read More »

Fri Aug 1, 2014 12:59pm EDT By Davide Scigliuzzo, Reuters   NEW YORK, Aug 1 (IFR) – The International Swaps and Derivatives Association (ISDA) on Friday declared Argentina in default, which could trigger payments worth up to USD1bn on credit default swaps. ISDA’s determinations committee voted unanimously that a “failure to pay” event occurred on July 30, when Argentina missed a coupon payment on some restructured foreign-law bonds. The ISDA… Read More »

Jul 29, 2014   New margin requirements for uncleared derivatives come in to force in 2015 and requires significant technological and operational investment. Big banks may well be prepared, but many institutions may be surprised to find themselves caught in the net. Grant Murgatroyd reports. The clock is ticking. On December 1, 2015 large financial institutions will be subject to new, onerous, regulations for non-cleared margin requirements. Initially only institutions… Read More »

TUESDAY, JULY 29, 2014, 9:24AM by GEORGE BOLLENBACHER If anyone had any doubts about the impact of regulatory change on the swaps markets, they only need to read ISDA’s recent research paper, Revisiting Cross-Border Fragmentation of Global OTC Derivatives: Mid-year 2014 Update. The paper makes it clear that regional attempts to regulate a global market can have unintended consequences. Here are some of their findings about the IRS market: The… Read More »

Europe to boost visibility with new venues, writes Peter Green of Morrison Foerster Amongst the most sweeping changes introduced under the new Mifid II legislation are those relating to pre- and post- trade transparency for transactions executed on trading venues. Transparency requirements under the existing Mifid regime are limited to shares admitted to trading on a regulated market. These new rules will apply to equity-like instruments, including depositary receipts and… Read More »