Deutsche Bank erroneously paid Eurex Clearing a daily collateral adjustment worth reportedly €28 billion about a week before Easter, but the mistake was caught before causing financial harm. The error raises questions about the bank's risk controls, but spokesman Charlie Olivier says officials "have rigorously reviewed the reasons why this error occurred and taken steps to prevent its recurrence."
The European Central Bank says it needs additional authority to protect EU member states in case of "exceptional situations" involving clearinghouses in the US and UK after Brexit. Among the powers sought are the ability to increase requirements for US and UK clearinghouses' liquidity buffers and more collateral gathered from clients.
Federal Reserve Governor Lael Brainard explained her vote against a proposal to change capital or liquidity rules for big banks, saying the largest firms "have the right kind and amount of liquidity." Vulnerabilities in asset valuation and business leverage show signs of "financial imbalances," Brainard said.
The International Monetary Fund urges regulators and policymakers in different jurisdictions to use a "nimble, innovative and cooperative approach" to establish cryptocurrency rules. "National authorities and international standard setters are encouraged to intensify cooperation on the monitoring of crypto-assets and on the consistency of the regulatory approach," an IMF report states.
The Cboe Futures Exchange plans to change the minimum increment for bitcoin futures to 5 points from 10 points to offer "a more robust price-discovery environment," says Matt McFarland, head of strategy and operations. As the market evolves, "there is a chance that we could move to even smaller than $5, but we will take things slowly," McFarland says.
LCH has filed a proposal with the Commodity Futures Trading Commission to let clearing members reduce risk from the default of a futures commission merchant. The proposal would give clearing members freedom to transfer positions from the defaulting FCM to their proprietary account or to the proprietary account of a third-party clearing member.
Hedge fund industry leaders expect to make greater use of artificial intelligence and other disruptive technology and to focus more on responsible investing to meet investor demand, according to a report by Aberdeen Standard Investments and an industry group. "This paper shows that the pace of change and innovation in the hedge fund industry is only going to increase," industry expert Jack Inglis says.
The National Stock Exchange of India and BSE want to introduce commodity derivatives platforms. The exchanges have applied for licenses after the Securities and Exchange Board of India decided exchanges can provide universal trading platforms for stocks and commodities.
As US oil exports surge, traders are calling for a revamp of the pricing benchmark to move away from West Texas Intermediate crude delivered in Cushing, Okla., and toward oil sold in Texas Gulf Coast ports. "As the demand center shifts to the export markets, it would be more important to have prices on the water, shifting away from Cushing-based prices," says John Coleman of Wood Mackenzie.
Join FIA and Clifford Chance for a live webinar as they present the new FIA Indirect Clearing Terms. The FIA Indirect Clearing Terms are designed to supplement contractual terms based on either the 2011 Professional Client Agreement or the soon-to-be-launched 2018 Terms of Business. The terms complement and complete FIA's suite of indirect clearing documentation and form part of the wider FIA Documentation Library. This session will focus specifically on the FIA indirect clearing documentation published in 2017 and 2018, with a specific focus on the recently published FIA Indirect Clearing Terms, as well as the 2018 Terms of Business. Tune in at 9 a.m. BST on May 17. Register now!