Basel III Update: Regulators, Lawmakers Call for Reforms

The laws recommended by the international accord known as Basel III are under fire by regulators and lawmakers who are worried about community banks and other small entities. “The one-size-fits-all approach to regulatory capital in the proposed rules does not take into consideration the diversity of...

Swaps Report: ISDA Predicts Only 20% of Swaps Will Remain Uncleared

A report by the International Swaps and Derivatives Association (ISDA) predicts that swaps remaining outside of clearing will require traders to post $1.7 to $10.2 trillion in initial margin, after new rules go into effect next year. Margin is the collateral that traders use to back their positions; initial...

Asia Derivatives Update: FX in S. Korea; Progress in Indonesia; Libor in HK

Hong Kong After Libor Hong Kong plans to revamp Hibor, the Hong Kong equivalent of Libor, in the wake of the derivatives scandal that ended with a $464 million fine for Barclays. Some bank traders manipulated the self-reported Libor in order to profit from interest rate derivatives. The Hong Kong Association...

UBS Fined $47.5 Million for Unauthorized Trades; Cantor Fined $700,000

The Financial Services Authority (FSA) has fined UBS nearly $50 million in what amounts to one of the largest penalties ever issued in Britain. The fine stems from unauthorized trades made by Kweku M. Adoboli, a former UBS trader, who caused a multibillion dollar trading loss last year. Last week, Adoboli...

Citi Resurrects Controversial Liquidity Hedge Plan

Risk is reporting that Citi is attempting to launch a product that looks suspiciously similar to its 2010 Liquidity Hedge Plan. The LHP, after a cover story run by Risk in 2010, was lambasted as “insanity” and “too dangerous to exist.” The product, as the name suggests, could be used to hedge...

Senators Warn Fed: Basel III is Too Generous to Large Banks

A bipartisan group of U.S. Senators has warned the Federal Reserve that international regulation known as Basel III may be too generous to  large banks. The issues were brought to the attention of the Fed at a Senate Banking Committee. “I’m concerned Basel III allows the largest banks to use complex...

OTC Derivatives Market Declines Once Again

The OTC derivatives market continues to shrink, but at a slowing pace. The derivatives market has contracted 1% in the last year, to $639 trillion, at the end of June. One factor in the decline of the OTC market has been the decrease in Credit Default Swap (CDS) notionals. Another factor may have been the...

Pre-Trade Tech Providers Set for Competition in Rates, Credit, FX

MarkitServ and Traiana, two post-trade tech providers, are releasing comparable pre-trade technologies that is poised to alter the clearing and execution for FX and beyond. The utilities will provide pre-trade notification in real time for credit availability. A later version of Credit Centre, the technology...

Money-Market Funds Likely to See Regulation from European Commission

Money-market funds and securities lending agreements will likely see regulation as the European Commission works to shore up unregulated banking. A spokesperson from Barnier, Stefaan De Rynck, told Bloomberg that the EU’s Michel Barnier plans to rein in “shadow banking” that may have cropped up in the...

China’s CSRC Rapidly Expands Futures Business

The CSRC, China’s head securities regulator, is revving up its futures business in order to draw in foreign business. According to Zhang Yujun, an assistant to the Chairman of the CSRC, the plan is to begin with glass futures, which are slated to debut on the Zhengzhou Commodity Exchange in the coming...
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