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November 20, 2012
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  Credit Markets 
  • Derivatives market continues to contract, BIS says
    The market for over-the-counter derivatives shrank 1% in the first half of 2012 compared with the second half of 2011. It was the second straight half-year contraction, according to the Bank for International Settlements. Total notional value came in at $639 trillion, compared with $648 trillion at the end of 2011. The market peaked in June 2011, at $707 trillion. International Financing Review (free content) (11/13) LinkedInFacebookTwitterEmail this Story
  • Goldman is on lookout for Asian bond bubble
    A flood of capital into Asian bond markets during the past year might be creating a bubble, according to Goldman Sachs Asset Management. "If bond demand continues at these levels and distorts prices for a long period of time, the likelihood of asset bubbles increases," said Owi Ruivivar, a senior fixed-income portfolio manager. "The main issue with this increased flow of funds chasing emerging-market bonds is that prices do not fully reflect economic fundamentals." Bloomberg (11/15) LinkedInFacebookTwitterEmail this Story
  • Asian banks may walk away from U.S. derivatives trading
    The uncertainty, ambiguity and complexity of complying with the Dodd-Frank Act might convince Asian banks that trading with U.S. entities that might bring it under the law's requirements is more trouble than it is worth, Asian sources said. In September, CME Group said the Asian over-the-counter has enough liquidity to run efficiently without the participation of any U.S. players. Risk.net (subscription required) (11/19) LinkedInFacebookTwitterEmail this Story
  • Bank regulators urged to impose controls on risk modeling
    Steve Bennett, executive director for the Pan-European Credit Data Consortium, said bank regulators should place some limits on the kinds of risk modeling that can be used by financial institutions to calculate their risk-weighted asset numbers. "To create a more level playing field, regulators have to come to the conclusion that they will have to set firmer guidelines for RWA estimation and they are in the process of examining bank practices," he said. Risk.net (subscription required) (11/14) LinkedInFacebookTwitterEmail this Story
  • CLOs carry inherent danger again
    Collateralised loan obligations have bounced back, but market participants say CLOs might be getting more dangerous as managers invest in riskier assets to extend the life of funds. Financial Times (tiered subscription model) (11/14) LinkedInFacebookTwitterEmail this Story
  • Other News
  Regulatory and Accounting Issues 
  • EU lawmakers struggle with Basel III
    Key divisions remain after several meetings by EU lawmakers regarding draft law to require banks to increase capital and liquidity, calling into question a year-end deadline. "I would suggest you take a look at the calendar. I think it's quite obvious that Jan. 1 is quite dubious at the moment," said Philippe Lamberts, a member of the European Parliament's negotiation committee for the legislation. The Wall Street Journal/Dow Jones Newswires (11/13) LinkedInFacebookTwitterEmail this Story
  • Deploy Basel III quickly and globally, German regulator says
    Elke Koenig, president of German financial regulator BaFin, says the best way to implement Basel III is quickly. Koenig says criticism of the rules, years in the making and designed to avoid another global meltdown, has surprised her. "There is no way around introducing Basel III as swiftly as possible, and I mean globally," she said. Reuters (11/19) LinkedInFacebookTwitterEmail this Story
  • Proposed capital-rule exemption creates stir in Europe
    Controversy is brewing in Europe over a possible exemption for setting aside capital when trades involve sovereign entities and corporations. Uncertainty on whether the exemption will be in final rules is putting a strain on banks that are trying to price swaps transactions. Essentially, dealers complain that they are having to place bets on the outcome of closed-door negotiations. Risk.net (subscription required) (11/15) LinkedInFacebookTwitterEmail this Story
  • IOSCO: Banks should offer more info on securitized debt
    The International Organization of Securities Commissions says banks should hand over more data on securitized debt to investors so they can conduct stress assessments. "IOSCO considers that investors should be able to test whether future cash flows generated from underlying pools" of assets in securitized products would "pay investors in full and on time," the group said. Bloomberg (11/16) LinkedInFacebookTwitterEmail this Story
  • FSB seeks controls on shadow banking
    The Financial Stability Board issued a proposal to regulate shadow banking, worth an estimated $67 trillion last year. "The objective is to ensure that shadow banking is subject to appropriate oversight and regulation to address bank-like risks to financial stability emerging outside the regular banking system while not inhibiting sustainable non-bank financing models that do not pose such risks," according to the FSB. Google/Agence France-Presse (11/18), Bloomberg (11/18), Financial Times (tiered subscription model) (11/18) LinkedInFacebookTwitterEmail this Story
  • Editorial: 2 derivative rules before CFTC are paramount
    The Commodity Futures Trading Commission has two derivatives rules on its plate that the industry is challenging. The first would push transactions to open electronic platforms, which is expected to increase transparency but decrease profits. The other would make U.S. law trump foreign rules when the U.S. law is stricter. This editorial argues for both rules to be implemented. The New York Times (tiered subscription model) (11/17) LinkedInFacebookTwitterEmail this Story
  • Other News
  IACPM News 
  • Thank you
    The IACPM thanks all of its Members, Sponsors and the many Speakers who participated in our 2012 Annual Fall Conference last week. They all helped to make the meeting a success. All conference participants will receive a link to the presentations in the next couple of days. LinkedInFacebookTwitterEmail this Story
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  SmartQuote 
A good man with a good conscience doesn't walk so fast."
--Georg Büchner,
German writer


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The IACPM is an industry association established in 2001 to further the practice of credit exposure management by providing an active forum for its member institutions to exchange ideas on topics of common interest. Learn more at www.iacpm.org.

 
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