"Britain and the European Central Bank have ended a four-year battle over City of London clearing houses in a deal that could ease fears about the UK’s future in Europe’s single market."
"The GM and Ford downgrade to junk status during May 2005 caused a wide-spread sell-off in their corporate bonds. Using a novel dataset, we document that this sell-off appears to have generated significant liquidity risk for market-makers, as evidenced in the significant imbalance in their quotes towards sales. We also document that simultaneously, there was excess co-movement in the fixed-income securities of all industries, not just in those of auto firms."
"No CCP yet offers a central clearing solution for cross-currency swaps, which means that Australian banks will continue to manage counterparty credit risk in this market on a bilateral basis for the time being."
"We find that entering the CDX index translates to a spread increase of the underlying single-name CDS. This is an important result when evaluating the stability of these markets, which are adjusting to new regulation (Dodd-Frank, the Volcker Rule, and the Basel III Accord). Over the past several years, single-name CDS trading activity has declined while CDS indexes trading activity remained stable. If, indeed, trading activity in the index affects the prices of its constituents and their trading activity, this asynchronous trading activity in the single-name CDS and the index might manifest itself in asynchronous pricing owing to the inability of arbitrageurs to trade in both markets. Such price divergence might intensify if more market participants were to exit the market—potentially reducing the usefulness of the CDS market for monitoring credit risk and hedging purposes—and should therefore be closely tracked."
"The arrival of swap execution facilities was supposed to herald a new era of swap market competition. Citadel Securities was the first new entrant to take the challenge, and its fixed-income execution head talks here about how the firm is trying to make its mark"
The technology architecture of mission-critical institutional trading platforms is changing rapidly. Java, .NET and Adobe Flex are being displaced in favor of HTML5, which is both lightweight and cross-platform. The move is a game-changer and represents the most fundamental technology shift in a generation."
"While Bitcoin has received the lion’s share of attention since its conception, recently the Blockchain — the distributed public database used to record Bitcoin transactions — has just begun entering the spotlight for enabling some important capabilities outside of Bitcoin."
"The Bank of England and the European Central Bank have struck a deal to enhance sharing information about central counterparties located in Britain that have significant euro-denominated business, the BoE said on Sunday. They have also agreed to extend their standing swap line to provide multi-currency support to central counterparties, it said in a statement. As a result, both parties had agreed to end any legal action related to the subject."
"Bonds based on high-quality loans should benefit from lower capital requirements to kick-start the market in Europe, the Bank of England and European Central Bank (ECB) said on Friday."
"A navigation tool that organizes and distills Practical Law's extensive library of resources on rules and releases in the area of swaps and derivatives under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as related regulatory activity."
"This Note details rules and rulemaking under Title VII of the Dodd-Frank Act covering swap clearing and exchange trading and related matters such as rules for swap clearinghouses and exchanges."
"This Note provides a comprehensive summary of the provisions of Title VII of the Dodd-Frank Act as well as related rulemaking and other applicable Dodd-Frak provisions covering both swaps (non-security-based swaps) and security-based swaps."
"The OTC fixed income markets are changing due to a variety of catalysts. Regulatory reform is forcing large banks to reassess their business models. Inflated government budgets, slow economic growth, and low inflation are making debt more attractive. Accommodative monetary policies are artificially keeping interest rates in check, fueling an unabated pipeline of debt issuance. Asset owners are increasingly growing larger and more concentrated. Investment philosophies are converging, becoming more symmetrical. It seems while the size of the market is growing, the universe of players that operate within that market is getting less diverse."
"The Dodd-Frank Act has imposed nearly 400 new regulations since its inception. This will inevitably come at a cost. It is estimated that Dodd Frank compliance across the eight largest banks costs up to $34 billion a year. In order to secure the investment required for this level of compliance, banks have had to downsize certain businesses and departments, in turn impacting their overall revenue. The dilemma of maintaining compliance whilst maintaining revenue is a work in progress. It has only been 5 years since Dodd Frank went live and financial institutions are still working through the teething problems. Moreover, with roughly one quarter of the law still to be implemented, the true economic impact will not be understood for years to come."
"Sometimes knowing what not to invest in is better than knowing what to buy. No longer hiding in plain sight are the public unfunded state, city and teachers pension liabilities. The numbers are staggering. Some of our elected officials have chosen to load their unfunded liabilities onto the backs of municipal bond investors. Don’t fall for it."
"Covered bonds from outside Europe could be forced to meet onerous swaps rules while those from Europe escape, unless the Basel Committee and European regulators can forge a consensus. Earlier this month the Basel Committee on Bank Supervision released a document suggesting that covered bonds would not be excluded from two way swap agreements."