ISDA dailyLead

Reading this on a mobile device? Try our optimized mobile version here: http://r.smartbrief.com/resp/eeeeCfbwoceXonqRLDYG

January 3, 2013

Daily coverage for the global derivatives industry

Top Stories

Swaps-trade price reporting began Monday
The Commodity Futures Trading Commission says banks have started reporting the price and volume of some swaps trades. Other swaps will be added later. Financial Times (tiered subscription model) (1/3)

Budget deal drives down corporate CDS index
A credit default swaps benchmark for U.S. corporate bonds declined more than it has in a year after Congress approved a deal to avert the "fiscal cliff." The Markit CDX North American Investment Grade Index, which dropped 8 basis points, reflected relief that an immediate risk of recession has been removed. Bloomberg (1/2)

Industry News and Trends

Banks and pension funds are at odds on collateral
Banks are backing off on providing clearing for pension funds because of the potential that some collateral could get clawed back in case of a bankruptcy, leaving banks holding the bag. All parties involved are looking for clarity on the matter from the U.S. Labor Department, which has yet to make a definitive declaration. Risk.net (subscription required) (1/2), Financial Times (tiered subscription model)/FT Alphaville blog (1/2)

Deutsche Boerse posts lower derivatives trading
Decreased market volatility in 2012 is cited for an 18% drop in derivatives-trading volume at Deutsche Boerse compared with 2011. Meanwhile, cash-market turnover declined 23%. Reuters (1/2)

Demand shifts in long-dated variable-annuity hedgers
Demand for variable-annuity hedgers has decreased dramatically in the wake of the financial crisis. Insurers are more frequently selling annuities with volatility risk included instead of trusting themselves to hedge their balance sheet. International Financing Review (free content) (1/2)

OTC derivatives clearing is offered in Poland
Preparing for legislation that will take effect this year, Poland's KDPW_CCP is clearing zloty-denominated forward-rate agreements, interest-rate swaps, overnight index swaps and basis swaps, as well as repo transactions that involve Polish treasury bonds. Over-the-counter clearing of derivatives in other currencies is due to be introduced next year. The Trade News (U.K.) (1/2)

Lightower-Sidera merger yields 1 provider serving buy, sell sides
Both the buy and sell sides can do derivatives business through one provider after the merger of Lightower Fiber Networks and Sidera Networks, announced last week. "The combined company, with its incredibly robust network, is well positioned for continued growth serving customers with an ever-increasing need for high-performance bandwidth," said Randy Peeler of Berkshire Partners, which acquired both companies in a $2 billion deal to merge their services. Securities Technology Monitor (1/2)

Regulatory Roundup

Analysis: Basel III represents regulatory difficulties
As governments propped up ailing banks during the past five years, regulating the industry became increasingly more complex. The EU and the U.S. each drafted a 700-page proposal for Basel III rules. In addition, the U.S. created the Dodd-Frank Act, which an industry group says will end up being 2,900 pages of regulations. Bloomberg (1/2)

Answers to questions on Basel III counterparty-credit risk
The Basel Committee on Banking Supervision has released answers to frequency asked questions regarding counterparty-credit risk under Basel III rules. The regulator also touched on capital requirements for banks' exposure to central counterparties. See more information from the Basel Committee. Structured Credit Investor (U.K.) (1/2)

Investors adjust portfolios to avoid French transaction tax
France's 0.2% financial-transaction tax is already reshaping investor behavior. Investors are selling shares and buying derivatives that take positions in those securities, such as contracts for difference, structured products and exchange-traded funds. The tactic works because derivatives are exempt from the tax. Risk.net (subscription required) (1/2)

SmartQuote

Trust only movement. Life happens at the level of events, not of words."

--Alfred Adler,
Austrian medical doctor and psychotherapist

ISDA® is a registered trademark of the International Swaps and Derivatives Association, Inc.

Subscriber Tools

Print friendly format | Web version | Search past news | Archive | Privacy policy

Advertise

Associate Publisher: Abiy Bekele (919) 931-5915