Collateralized loan obligations that were created after the financial crisis in the U.S. have material exposure to the commodities sector, which poses an increased risk to investors due to the plunge in crude prices.
"If a plan has an “annuity purchasing policy” that meets the requirements prescribed by regulation, payment of all or part of the pension benefit in accordance with that policy would constitutes a discharge. The affected individuals would, however, remain “plan members” for purposes of any surplus distribution upon plan termination within a three-year period following the payment."
"For an institutional market participant in need of a foreign exchange trading counterparty, Wall Street’s so-called Bulge Bracket historically has been the go-to phone call. That dynamic is changing amid market fragmentation and the rise of screen-based trading, and in coming years liquidity increasingly will be found in nontraditional sources."
" On 26 July, the UK Financial Conduct Authority (FCA) formally granted Bloomberg a licence to run a so-called “multilateral trading facility” in the UK."
"Despite these almost insurmountable difficulties, two researchers from the Bank of England have recently made an interesting attempt to identify which secular factors have contributed how much to the approximately 450-basis-point (bp) decline in the global real long-term interest rate since the 1980s (see the two-part post by Lukasz Rachel and Thomas Smith on the Bank Underground blog). I’ll leave it to you to check out the methodology and details and will focus here on the main results: In a nutshell, the study finds that secular trends in desired saving and desired investment can account for 300 bps, or two-thirds, of the decline in real long-term interest rates over the past three decades. Another 100 bps are attributed to slower expected trend growth, and only the remaining 50 bps remain unexplained."
"Fitch Ratings said this morning that it is not convinced that the much-discussed reinsurance pricing floor has been reached, even in property catastrophe exposures and peak lines, with a further single-digit decline expected at the January renewals."
"GC Securities, the investment banking, catastrophe bond and capital markets arm of reinsurance broker Guy Carpenter, said today that it expects the catastrophe bond pricing floor, which was seen during the second-quarter, will persist for the near future."
"A new platform named PACE, launched by global reinsurance intermediary and capital advisor Aon Benfield, has been designed to help reinsurers monitor catastrophe exposures and can also help ILS fund managers to create optimal portfolios of insurance risk."
"Global reinsurers are adopting divergent approaches to managing catastrophe exposures as market challenges, driven in part by ample capacity and a lack of significant losses persist, according to insurance and reinsurance ratings agency Standard & Poor’s (S&P)."
"CME Group's decision to slash its minimum guaranty fund contribution for interest rate swap clearers by 70% has piqued the interest of would-be clearing members."
"The CFTC has published its proposed amendments to Part 45 Reporting Rules in the Federal Register. The proposal’s 166 pages are a partial answer to the panoply of concerns raised in the March 2014 questionnaire, which highlighted inconsistencies between SDRs, onerous data standardisation requirements, ambiguity for end-users and duplication of data throughout the clearing process, pointing to deep-seated problems in swap data quality and utility."
"Asia has become one of the world’s most rapidly developing regions, with a burgeoning population, rising asset values and large-scale urbanisation. However, the development of the region’s economy is hindered by high exposure to flood events and a broad insurance protection gap."
"As the costs of central clearing, collateral reporting and margining continue to rise, firms will need to evolve their operating models, architecture and legacy collateral management solutions in order to remain competitive and protect revenues. While driven in part by regulation, there are a number of converging trends influencing the desire to increase efficiency and reduce costs."
"Tradebook and Tradeweb launch new electronic platforms for the trading of certain yen-denominated derivatives"
"The World Federation of Exchanges has written to Lord Hill to complain that Europe's lengthy process of approving clearers could end up hurting emerging market economies."
"Today the Committee on Capital Markets Regulation (CCMR) and the Financial Markets Law Committee (FMLC) issued a joint statement on EU-US CCP recognition."
"The US Committee on Capital Markets Regulation and London-based Financial Markets Law Committee on Wednesday said both sides needed to recognise each other’s rules as equivalent, to prevent global derivatives markets from fragmenting."
"Following the 2014 FSB Feasibility study on approaches to aggregate OTC derivatives data, the FSB asked the CPMI and IOSCO to develop global guidance on the harmonisation of data elements reported to TRs and important for the aggregation of data by authorities, including Unique Transaction Identifier (UTIs) and Unique Product Identifiers (UPIs). This consultative report is one part of the CPMI-IOSCO Harmonisation Group's response to its mandate. It focuses on a first batch of key data elements (other than UTI and UPI) that are considered important for consistent and meaningful aggregation on a global basis."
"The reinsurance market is “operating in a new reality of abundant capacity from traditional and alternative sources” according to A.M. Best. Historically change in the reinsurance market has been said to be cyclical, but the current wave of change is thought structural in nature."
"We all know that the Shanghai Composite Index has seen massive volatility with the media dubbing August 24th as China’s Black Monday with the Index falling 8.5% and then a further 7.6% on the 25th. So I thought it would be interesting to look at how a USD Interest Rate Swap trade performed over this period and specifically at the margin requirements of a cleared swap."