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Kremlin Said to Urge Basel III Delay as Economic Crisis Hits  

September 30, 2015

Kremlin aides are urging Russia’s central bank to delay introducing tougher capital rules for lenders known as Basel III, arguing they may deepen the worst economic crisis in six years, three people familiar with the matter said.

 

Nationalising a failed clearing house an option -EU document  

September 30, 2015

The EU's executive European Commission is due to publish a draft law on handling collapsing clearing houses. Clearing houses are third parties that stand between two sides of a stock or derivatives trade. Regulators are requiring swathes of the $630 trillion derivatives market to be cleared to improve safety and transparency.

 

Yuan Drop Shakes Taiwan Into Tighter Scrutiny of Its Derivatives  

September 30, 2015

“With this new information, we will be able to gather warning signals and ask the market to do something before it’s being pushed to the limits,” said Chiu. “Without more detailed data, when there’s a big move in the market, we don’t know the detailed information of the exposure.”

 

Wall Street Said to Win Lucrative Concession in Derivatives Rule  

September 29, 2015

The industry had fought the mandate that both a bank and an affiliate put up collateral, which was laid out in the version of the rule that was proposed last September and had strong support from the FDIC. In a compromise, banking regulators now agree that the final measure should only demand collateral from an affiliate trading with a U.S. bank unit.

 

Convertible Bonds Remain Risk-Averse  

September 28, 2015

Investors in high-yield convertible bonds are taking on greater credit risk and most likely are accepting greater implied volatility to buy the out-of-the-money equity call option embedded in the bond. This gives high-yield convertibles a lower call option delta against the stock and therefore a higher gamma.

 

Banks Set to Lose Risk Loophole in Sweden as FSA Strikes  

September 28, 2015

Because the transactions appear as short-term on the banks’ balance sheets, they’re assigned a lower risk weight. That means banks can hold less capital to guard against the threat of losses.

 

Swaps market structure changes create fragility  

September 28, 2015

“We’re seeing a fragility of markets that hasn’t existed before and we can see that in the rise of flash crashes and big market moves,” Dexter Senft, managing director for fixed income e-markets at Morgan Stanley, told Isda’s European conference in London this week.

 

Global bank regulation to ‘hit big four banks’ returns’  

September 23, 2015

Foreshadowing more “repricing” of loans and deposits by the big four, Morgan Stanley said changes to mortgage risk weights could result in “material changes to expectations for banks’ capital returns/dividends and retail bank return on equity”.

 

No consensus over stopping clearers becoming 'too big to fail'  

September 23, 2015

The financial crisis prompted reform of the $630 trillion derivatives market, forcing many contracts in the United States to pass through a clearing house, with the European Union following suit next year with similar rules.

 

Basel III framework’s early days  

September 21, 2015

Basel III implementation pushed more banks into the undercapitalized ranks, but a few institutions were able to improve their financial position in the second quarter and back away from the abyss. The number of undercapitalized institutions dipped slightly in the second quarter to 20 banks and thrifts from 21, based on the criteria of having a common equity Tier 1 ratio below 4.5%. 

 
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