"Restrictions on Qualified Financial Contracts of Systemically Important U.S. Banking Organizations and the U.S. Operations of Systemically Important Foreign Banking Organizations; Revisions to the Definition of Qualifying Master Netting Agreement and Related Definitions"
"If Wall Street does not implement blockchain properly, the distributed ledger’s transparency quickly turn from a major benefit to a major problem, according to speakers at the Consensus 2016 blockchain conference in Midtown Manhattan."
"Prudential Retirement Insurance and Annuity Company (PRIAC) and Legal & General (L&G) have completed their third longevity reinsurance transaction since October 2014."
"The idea of scrapping IMA-CVA has upset large dealers, which were in the middle of completing a quantitative impact study based on the own-models approach when supervisors revealed it would be ditched in a March 24 consultation.
Their regional rivals are less fazed. “The regulators have a point,” says one risk manager at a European regional bank. “There is already a concern that there would be a lot of work to redo the infrastructure under the new regime with the desk-based internal model. At this stage, I would agree we don’t need this type of additional complexity.”"
"This is really interesting: New York Fed President William Dudley gave a speech over the weekend on market and funding liquidity at an Atlanta Fed conference. After defending market liquidity as robust, he then went on to detail how maybe, just maybe, that isn’t the case. He also had some comments on the Fed funding bank-affiliated brokers in an emergency. We excerpt his best lines for our readers (emphasis added):"
"Global reinsurance company Munich Re is returning to the capital markets with a new issuance, as it seeks to expand its capital markets sources of retrocession through a (currently) $100m Queen Street XII Re dac 2016 catastrophe bond transaction."
"The proposal, if adopted, would see investment firms lose certain contractual rights to terminate financial deals with big banks—rights that essentially have allowed them to claim payments in the event of a bankruptcy filing without having to stand in line with other creditors. Big banks already agreed to waive such rights in 2014, but asset managers and hedge funds have resisted the change because it threatened to put them in a weaker contractual position."
"Front-loading is a requirement that stipulates all trades executed on or after a pre-set date, that meet a defined criteria (instrument, currency and remaining maturity) on obligation date, must be cleared."
"CME Group Inc (CME.O) and rival Intercontinental Exchange Inc (ICE.N) plan to publish new pricing data on bitcoin that they say will increase credibility and transparency for the controversial digital currency."
"Whether Craig Steven Wright is the creator of bitcoin that he claims to be, a potentially more important mystery remains: Where is the substantial pile of the initial digital currency he is believed to own and does the inventor plan to sell it? Wright, an Australian entrepreneur, identified himself Monday as the bitcoin inventor almost five months after he was outed in media reports as the man behind the virtual currency."
"In this post, we provide a different perspective on the General Collateral Finance (GCF) Repo® market. Instead of looking at the market as a whole, as we did in our previous post , or breaking it down by type of dealer, as we did in this primer, we disaggregate interbank activity by clearing bank and by collateral class. This perspective highlights the most traded collateral and the extent to which dealers at a clearing bank are net borrowers or net lenders. This view of the market is informative given the proposed changes announced recently by the Fixed Income Clearing Corporation. "
"The Commodity Futures Trading Commission has been receiving swap trade reports for a few years, but it can’t seem to make sense of some, or much, of it. In order to fulfill the Commission’s regulatory mandates of monitoring systemic risk, market abuse and general oversight, the data has to be much better. The Commission realizes that it needs more details than it originally asked for and that the currently requested data is not being reported well enough. Unfortunately, perfect quality data may not be attainable."
"So, should more be done to support funding liquidity? In my view, an important issue is to identify and address gaps in the lender-of-last-resort function. In the U.S., some significant gaps remain. For example, the Federal Reserve has a very limited ability to provide funding to a securities firm, even on a fully collateralized basis. The Discount Window is only available to depository institutions, and Section 23A of the Federal Reserve Act severely constrains the ability of a depository institution to pass Discount Window funding along to its securities affiliate. Although the Federal Reserve may be able lend to a securities affiliate under its emergency lending authority under Section 13(3) of the Federal Reserve Act, this is not a standing facility - it can only be established if "unusual and exigent" circumstances exist and the program or facility must have broad-based eligibility, among other requirements."
"In short, Matonis is saying Craig Wright will show the lost and wayward bitcoin community that the resolution to their scaling problem doesn’t lie in a choice between the Core or Classic fork, or whatever resolution is currently being touted, but in Wright’s ability to make Bitcoin itself Turing complete and the winner-takes-all stateless solution for the global market."
"Execution management systems have gained the confidence of buyside traders and may overtake the traditional order management systems that were once the mainstay of a trader's desk."
"Will blockchain truly be disruptive, or will it simply bring changes that make the system cheaper, faster and easier to use? Both, according to Blythe Masters, who discussed the long-term potential of blockchain technology with DTCC’s Michael Bodson at the DTCC Blockchain Symposium. Financial services incumbents will continue to have an important role in the future, she said, but the industry must adopt standards."
"Putting clearinghouses together with buyside firms may not strike many as a "you got your chocolate in my peanut butter" moment, but the relationship between the two is certainly changing. Ever since the inception of clearinghouses, membership in central counterparty (CCP) clearing organizations has always been a sellside affair, with buyside membership frowned upon by the largest dealers. The owner and operators of the CCP firms once thought that it would level the clearing playing field too much by providing buyside members easier access to other clearing firms, explained Murray Pozmanter, managing director and general manager at the Depository Trust & Clearing Corp. Once Citadel Securities joined LCH.Clearnet's SwapClear interest-rate swap clearing service as the first non-bank member in October 2015, the industry conversation began percolating once again."
"The ILS market continues to provide valuable support in terms of both capacity and its features to vital natural catastrophe schemes across Europe, helping to alleviate some of the financial burden felt by governments when disaster strikes."
"Putting clearinghouses together with buyside firms may not strike many as a "you got your chocolate in my peanut butter" moment, but the relationship between the two is certainly changing."
"On a recent Monday in April, more than 100 executives from some of the world’s largest financial institutions gathered for a private meeting at the Times Square office of Nasdaq Inc. They weren’t there to just talk about blockchain, the new technology some predict will transform finance, but to build and experiment with the software."