A March 11th article in Bloomberg, “Catastrophe Prevention Drives Insurance Pitch to Clearinghouses” by Matthew Leising caught our eye. It reports on an effort to provide an additional layer of default…Read More
Sovereigns and OTC Derivatives Clearing: the rules are a mess. We look at an excellent paper from BNYM.
Recently Bank of NY Mellon (BNYM) published a paper “Sovereigns in Search of Solutions:OTC Derivatives Reform: Direct and Indirect Impacts” reviewing the dilemmas faced by banks when executing OTC derivatives…Read More
Moody’s is reviewing 17 global banks for downgrades that may come as early as June. The news is starting to fill with stories on how much extra collateral banks will…Read More
Pro-cyclicality is every regulator’s favorite whipping boy right now. Regulators pound the table over ways to offset the tendency to ease financing terms when the market is strong, only to…Read More
As of April 13, 2012 the CME has started accepting corporate bonds as collateral for cleared OTC Interest Rate Swaps. We have been thinking about the CME criteria for accepting…Read More
The European Repo Council, part of ICMA, came out with an interesting paper today, “Haircuts and initial margins in the repo market”. It was authored by Richard Comotto, Senior Visiting Fellow…Read More
A February 3, 2012 article in Businessinsider (link is here) alerted us to a piece of new research from Fitch on the repo market. The Fitch report (link is here)…Read More
Basel III LCR rules may change, allowing corporates and equities. Nestle debt looks a whole lot better than Portugal.
The irony of sovereign debt being used for Basel III Liquidity Coverage Ratios (LCR) yet becoming more risky by the hour from a credit perspective is coming home to roost.…Read More
The European sovereign debt crisis has any number of knock-on effects to the financial markets, but one we are interested in is the uncollateralized exposure on swaps. Sovereign exposure is…Read More