"The balance of power between investors and hedge fund managers has tilted in favor of the investors since the financial crisis."
"The asset management industry and a technology that has found favour with drug dealers do not seem like natural bedfellows. Yet blockchain, the technology that underpins bitcoin, the controversial digital currency, is being heralded as “revolutionary” for fund houses."
"Five of the UK’s biggest fund houses have joined forces on a secret project to test if blockchain, the nascent technology underpinning bitcoin, the digital currency, can be used to save billions of pounds in trading costs."
"The benefits of microfinance are in the details. This column takes a look at commercial bank lending to Indian self-help groups – smaller, informal community-based groups – as a new and successful microfinance initiative. Different ways of thinking about getting credit to the poorest and most marginalised in society can work, but only if the institutions are properly geared up for their customers."
"It gets off on the wrong foot by misstating the real benefits of CCPs. Its top two benefits are related to the ability of CCPs, and via them regulators, to get more complete, accurate, and timely information on derivatives positions and trading prices. But these can be achieved by transaction reporting alone, without going the full monty to clearing, which also entails collateralization (including both initial and variation margining) and mutualization of default risk. (Trade reporting has turned into a nightmare, which I will write about further soon. But the point is that you don't need clearing to get the benefits OFR touts.) But the main problem, yet again, is that OFR focuses on the "single point of failure"/interconnectedness/default loss contagion channel for CCP systemic risk. This is not immaterial, but it is not the main thing. The main thing is that CCPs create potentially massive contingent demands for liquidity, where the liquidity contingency is likely to occur precisely at the worst time-when the system is undergoing a financial crisis."
"Most US asset managers have been either forced to pay more to clear swaps or given the boot by their clearing firm as a result of the leverage ratio, a survey has found, documenting for the first time the detrimental impact of the incoming rules on end-users."
"Big news in SEF-land last week was the formal registration of 18 of the 20+ SEF’s. Generally speaking, chances are that if you have traded on a SEF, it has become fully registered."
"There was a significant swing in the percentage of US and Canadian transactions using non-cash collateral last year, according to DataLend’s Chris Benedict, who predicted that this might even reach a 50-50 split by the end of 2016. "
"Unanswered questions about the security of reported data stored by regional regulators should be a major concern for beneficial owners, according to a panellist at IMN’s Beneficial Owners' International Securities Lending & Collateral Management Conference."
"The body responsible for administering Euribor has launched an ambitious campaign to double the number of banks on its thinning panel of rate submitters – but the lack of enthusiasm from many banks might force it to rely on proposed European legislation that could require mandatory contributions for critical benchmarks instead."
"Back in 1997, Bowie raised $55 million through loans backed by royalties from 25 of his albums—including the aforementioned “Ziggy Stardust.” Prudential Insurance Company of America bought the whole portfolio, and kept them. The insurer earned a tidy 7.9% a year from the innovative concept until the bonds expired in 2007, whereupon Bowie took back the rights to the royalties."
"Can removing old, tired-out cells extend an animal’s life span? That’s is the conclusion of first-of-a-kind study by researchers at the Mayo Clinic, which found that mice lived about 25 percent longer on average if so-called “senescent” cells were cleared out from their bodies."
"After a number of renewals where the world’s insurance companies have been carefully managing their retentions, increasing them in many cases, there are signs and reasons to be more cheerful as reinsurance capital is once again rising up the agenda."
"The efficient capacity and capital market structures of the insurance-linked securities (ILS) market have the potential to benefit the entire insurance value chain, from end consumer through to investor, according to Deloitte.
"Is global aging about to end the savings glut? Some observers think so. More and more baby boomers are reaching retirement age, and they will soon not only save less but also start to dump their accumulated assets to fund retirement … or so the story goes. If this were true, the consequences for interest rates would be profound. The real long-term equilibrium interest rate, which has been on a secular downtrend for decades partly due to strong working-age cohorts saving hard for retirement, would start to rise – and what we here at PIMCO call The New Neutral might soon be history."
"The funding valuation adjustment, or FVA, is a bit like modern art. Everyone has a different take on it, stirring lengthy – and at times, heated – debates on how it should be interpreted. Some people rave about it, while some can't digest it at all, and others pretend to like it because of peer pressure. But despite this, there is a whole industry built around it."
"I set out recently to write about a new program of down payment (henceforth DP) insurance, but quickly realized that such an article required an extensive preface that clarifies what the DP is and what it is not. The new program is discussed after that."
"Online lending, marketplace lending and peer-to-peer lending all refer to the same thing, in order of decreasing accuracy, but regardless of what prefix you use, the semantic assumption is that companies like Lending Club and Prosper Marketplace are lenders. In fact, they both go to great lengths to avoid being judged that way by state regulators, even as they pose to consumers as providers of credit."