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November 8, 2012
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Daily coverage for the global derivatives industry

  Top Stories 
  • CFTC's cross-border swaps rules prompt questions
    Regulators from Europe, Asia and the U.S. met this week in Washington, D.C., to discuss cross-border derivatives rules by the Commodity Futures Trading Commission. Patrick Pearson of the European Commission expressed concern about the rules. "The proposed approaches across the globe simply won't work," he said. "They won't mesh. They won't interact. They will cause conflicts." Bloomberg Businessweek (11/7), Financial Times (tiered subscription model) (11/7) LinkedInFacebookTwitterEmail this Story
  • CFTC footnote could have big effect on OTC derivatives market
    The Commodity Futures Trading Commission's seemingly small addition to a rule allowing dealers to bundle execution and clearing businesses could have a significant effect on the competitive landscape of the over-the-counter derivatives market, experts say. The change could give dealers an advantage over smaller rivals that don't offer both execution and clearing. (subscription required) (11/7) LinkedInFacebookTwitterEmail this Story
  Industry News and Trends 
  • BoE official warns CCPs against risk and margin secrecy
    Central counterparties' refusal to detail risk and margin models on the grounds of proprietary information cannot be justified, said Edwin Schooling Latter, head of payments and infrastructure at the Bank of England. "Not every client can be on the risk committee. Not every client can attend board discussions on segregation," he said. "So it is very important those that can't are able to benefit from full and appropriate disclosure by the CCP on how it is managing its risks." Schooling Latter also questioned an estimate of $30 trillion that would be needed for collateral because of central clearing of over-the-counter derivatives. (subscription required) (11/7), (subscription required) (11/6) LinkedInFacebookTwitterEmail this Story
  • Another roadblock emerges in clearing
    EU buy-side firms plan to meet central-clearing rules by using indirect clearing. However, the Commodity Futures Trading Commission allows only one kind of collateral protection, and it is not one of two allowed in Europe for indirect clearing. Lawyers say the matter can be resolved if European Securities and Markets Authority rules are interpreted a certain way, but it is unclear whether ESMA will allow that. (subscription required) (11/7) LinkedInFacebookTwitterEmail this Story
  • Move to organized trading facilities raises concern
    A lack of resources and dealer involvement might inhibit trading of some European derivatives on organized trading facilities, which will eventually be required, panelists said at the OTC Derivatives Clearing Summit Europe. Of particular concern is the prospect that banks will not have a part in developing infrastructure. (subscription required) (11/7) LinkedInFacebookTwitterEmail this Story
  • Major banks push Euribor and Libor alternative with ECB
    A delegation of leading global banks has proposed to the European Central Bank an alternative to the Euro Interbank Offered Rate and the London Interbank Offered Rate, amid a threat of regulation and low interbank lending. The group supports a benchmark that would be based on "secured market" trades. "The unsecured [interbank] market is ... disappearing, so we need an alternative. A secured index makes a lot of sense," said one person involved in the discussions. Reuters (11/7) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • Senate committee will address Basel III
    The Senate banking committee plans to discuss Basel III capital standards for banks at a hearing next week. The hearing comes amid increasing pressure on regulators to delay or change the rules before they are finalized. Officials from the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. are expected to testify. (subscription required) (11/7), The Wall Street Journal/Deal Journal blog (11/7) LinkedInFacebookTwitterEmail this Story
People always call it luck when you've acted more sensibly than they have."
--Anne Tyler,
American novelist

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