Blockchain technology may seem futuristic to some, but there is a use for it in today’s OTC derivatives market. Smart contracts are one example. In a Q&A, Robin Moody, Global Head of SmartDX, explores the concept of smart contracts and how they can be used to help manage OTC derivatives documentation, and support regulatory compliance now. Learn more in an upcoming derivatives documentation webinar.
Voters have clearly rejected a people’s initiative calling for a 10% boost in benefits from the state retirement fund – a move supported by the political left, but deemed far too costly by its opponents.
"With homeowners’ equity soaring to near-record levels, financial technology entrepreneurs — backed by deep-pocketed venture capital — are dreaming up sophisticated ways to help consumers access that equity without traditional interest payments."
"House flippers and property developers are increasingly crowdfunding -- tapping the virtual wallets of anonymous internet backers on platforms such as RealtyShares, LendingHome, PeerStreet and Patch of Land. For riskier ventures, such as building new homes and buying, renovating and selling existing ones, they’re finding quick financing can be easier to get online than from banks. That’s contributed to an increase in home flipping. In the second quarter, 39,775 investors bought and sold at least one house, the most since 2007, according to ATTOM Data Solutions."
"With the number of exchange-traded funds continuing to grow across the industry, a new trend is beginning to attract attention: ETF closures. Investors who want to avoid investing in a fund that may have a high risk of closure increasingly need to evaluate ETFs not only in terms of their performance, but in terms of how viable the strategy may be. MayStreet’s Patrick Flannery offers metrics that can help spot signs of ETF failures."
"The London Stock Exchange Group’s (LSE) chief executive officer has said moving clearing from London after Brexit, “probably cannot be achieved”. Xavier Rolet made the comments in an interview with Bloomberg, and explained the physical and economic consequences are “rather complex.” “The notion of separating the clearing of euro-denominated interest rate swaps from US dollar denominated interest rate swaps, just doesn’t make any economic sense,” he told Bloomberg. Rolet said moving clearing from a regulatory and legal standpoint probably won’t be achieved."
"US regulators are in hock to the Financial Stability Board (FSB), an unelected body that has designated non-banks as systemically important financial institutions (Sifis) without regard to legal requirements for public consultation, congressional Republicans have claimed."
"Offsetting a recent decline in catastrophe bond issuance and maintaining ILS market development, collateralised reinsurance has recorded solid growth, a trend that is driven by the current market cycle, according to Paul Schultz, Chief Executive Officer (CEO) of Aon Securities."
"China’s approval of credit-default swap trading for the first time is fueling speculation authorities will allow more bond delinquencies as the economy slows."
"Kevin McGrath, who manages money for the New Jersey Division of Investment, said that ETFs can account for up to 30 percent of the pension's internal high-yield debt exposure. Right now, the fund's junk ETF holding is smaller than that, he said."
"One-hundred thousand jobs would be at risk if clearing leaves the U.K., said London Stock Exchange Group Plc Chief Executive Officer Xavier Rolet."
The CFTC is growing concerned about margin financing – the practice of clearing members lending money to their clients to post as initial margin. Such lending is forbidden for futures commission merchants under CFTC rules in the US but it is commonly facilitated through prime brokerage loans and other revolving credit facilities. European regulations do not prohibit margin lending. ABN Amro, BNP Paribas and Societe Generale are the largest margin financiers. The CFTC is most perturbed by the combination of margin financing with net margin posting, which allows banks to lend cash to clients as collateral but not post it to clearing houses. Regulators are alarmed by the possibility that banks would be on the hook for client collateral if customers failed. Supervisors are also concerned about clearing bank failures if margin loaned to clients is simply a ‘book entry' and no money is in the account on behalf of the client.
"This column often tackles controversial issues: race, gender, crime, the tragedy of people who order steak in restaurants. Today, however, we’re going to have some real fireworks. We’re going to talk about the appropriate discount rate for public-sector defined-benefit pension plans."
"Moving euro-denominated clearing from London to the continent after Britain leaves the European Union would be a mammoth task and bump up costs for companies, a senior derivatives industry official said on Tuesday."
"Artemis recently spoke with Sid Ghosh, Vice President, Senior Analyst at Moody’s Investors Service about the prospects for the insurance-linked securities (ILS) space, the sustainability of reinsurers’ ROE’s and what might happen at the key January 1st 2017 renewal season."
"When you start the day reading a headline that so obviously misrepresents the reality of the world around you, sometimes all you can do is splutter into your morning bowl of cereal. For those of us at ISDA, this was the reaction to a Financial News front-page splash published on September 19 entitled ‘G-20 derivatives reforms show little results – seven years on’."
"Swiss voters decide this week whether to support a 10 percent increase in the basic state pension amid an opposition campaign that likened the proposal to feeding gourmet food to pigs."
"On September 20, 2016, I attended the ISDA 2016 Annual Europe Conference, titled The Future is Now: Implementing the Margin Rules for Non-Cleared Swaps."