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December 4, 2012
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  Credit Markets 
  • Banks look again to derivatives market
    Derivatives-product companies might be due for a post-crisis comeback as several banks broach the possibility of opening up such units with lawyers and credit rating agencies. Roger Merritt, a Fitch Ratings managing director, says the firm is talking to several banks in Europe and the U.S. about reviving the sector. (subscription required) (12/3) LinkedInFacebookTwitterEmail this Story
  • Banks move to increase corporate-bond inventories
    In the five weeks ended Nov. 14, the biggest banks increased holdings of corporate debt by $13 billion, to $57.8 billion, according to Federal Reserve data. Holdings peaked at $235 billion in 2007, but banks have since reduced their inventories. Still, 2012 has been a record year for bond sales, and Wall Street banks are back in the thick of things as market makers. Bloomberg (11/27) LinkedInFacebookTwitterEmail this Story
  • Rules will rein in alternative sources of credit, study says
    Allen & Overy has released a study that asserts that new regulations in Europe, the U.S. and elsewhere will curtail the ability of asset managers, insurers and investment funds to provide alternative sources of credit. The research found that rules governing the derivatives markets, hedge funds, banks and other areas of the financial industry will combine to increase the cost of credit. "Allen & Overy believes it will take years to clarify exactly what the growing number of regulations mean, creating confusion and uncertainty in the market and bringing with it a prolonged period of credit paralysis," the study says. Financial Times (tiered subscription model) (12/2), Banking Times (London) (12/3), The Wall Street Journal/Dow Jones Newswires (12/2) LinkedInFacebookTwitterEmail this Story
  • Investors returning to U.S. covenant-lite loans
    U.S. covenant-lite loans accounted for 31% of institutional loan issuance in October for the highest proportion since the financial meltdown, indicating new investor appetite for higher returns at the peril of greater risk, according to Fitch. And this year, more than $37 billion of the loans have been issued so far, up from the 2011 total of $13 billion. Fitch estimates the average covenant-lite term loan recovery at 55% to 60%. Structured Credit Investor (U.K.) (11/27) LinkedInFacebookTwitterEmail this Story
  • U.S. banks help offshore clients sidestep derivatives rules
    Wall Street banks are telling foreign clients that they can sidestep upcoming U.S. rules on over-the-counter derivatives by routing their trades through their overseas subsidiaries rather than through parent banks, sources say. The detour could eventually be shut down by foreign regulators. Reuters (12/3) LinkedInFacebookTwitterEmail this Story
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  Regulatory and Accounting Issues 
  • EU concedes January is out of the question for CRD IV
    Although it is hoped the delay will be short, the EU says January is no longer a realistic deadline for implementing Capital Requirements Directive IV, put forward by the Basel Committee on Banking Supervision. Leverage limits, bankers' bonuses and liquidity rules are among sticking points. Bloomberg (12/3) LinkedInFacebookTwitterEmail this Story
  • Basel III won't be postponed, official says
    With many jurisdictions ready to go, Basel III capital rules for banks will take effect Jan. 1 as scheduled, said Wayne Byres, secretary general of the Basel Committee on Banking Supervision. "We are persisting with the date, and those not ready on Jan. 1 can be ready thereafter," Byres said. Reuters (11/27) LinkedInFacebookTwitterEmail this Story
  • Asian financial leaders fear Basel III derailment
    Worried that delay in U.S. and European implementation of Basel III will eventually lead to abandonment, Asian financial leaders are calling for specified postponement that doesn't extend into years. "The fact is that the U.S. and eurozone are the most important regions where Basel III should have been implemented," said Anand Sinha, deputy governor of the Reserve Bank of India. "It would have been very helpful, even if there is a delay, if the U.S. and eurozone could have indicated a definite timeline; that is not there." Reuters (11/27) LinkedInFacebookTwitterEmail this Story
  • Asian regulators scrutinize shadow banking
    A property downturn in South Korea led to the recent closure of a number of unregulated banks because of heavy losses in project investment, one of a number of events across the region that have focused the attention of regulators on shadow banking. The sector deserves more scrutiny, said Greg Medcraft, chairman of the Australian Securities and Investments Commission. However, others warn restrictions cast too wide could dry up funding for projects such as micro-financing that are vital in some parts of the region. (subscription required) (11/28) LinkedInFacebookTwitterEmail this Story
  IACPM News 
  • IACPM Risk Rating Survey results available to members
    Results of IACPM’s 2012 Risk Rating Systems Survey are now available on the members only portion of IACPM’s website. IACPM members can access the results using their login at: If you are an IACPM member and do not have a login and password, please contact us at LinkedInFacebookTwitterEmail this Story
  • IACPM NY Fall Conference presentations now available to attendees
    Electronic copies of IACPM's Fall Conference presentations are available for download. All participants have received an email with instructions on how to access the presentations. If you attended the meeting and did not receive an email, or if you have trouble accessing the materials, please contact us at LinkedInFacebookTwitterEmail this Story
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Courage is going from failure to failure without losing enthusiasm."
--Winston Churchill,
British prime minister

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