Derivatives
CCP network study uncovers highly concentrated core of firms
First data-collection exercise of its kind reveals a concentrated core and more dispersed periphery, with the possibility of shocks spreading outward
Are central banks allowing markets to get a bad name?
Dispute over the role of offshore derivatives trading in Asia raises important questions about the role of financial markets in a world increasingly dominated by short-term trading
US dealers wade into European CCP relocation debate
CFTC hearing warns of increased margining costs and a pre-Brexit client onboarding crunch
IMF’s Werner: central banks need better understanding of interventions
Central banks in Latin America have employed a host of unconventional market interventions, but figuring out what works and what does not is proving tricky
Brazil stands out for ‘pioneering work’ in trade reporting – FSB
Peer review finds the South American nation has overcome many of the issues plaguing others, making it a leader among FSB jurisdictions
FSB sets out proposals for governing ‘unique transaction identifier’
System should avoid “unnecessary complexity”, document argues
LCH platform to provide risk calculations for margin hub
SwapAgent will send standardised sensitivities for bilateral trades to AcadiaSoft to make IM calls
FCA urges progress on equivalency for derivatives trading
US and EU regulators should base recognition decisions on outcomes, not technical details
Mixed views on Dodd-Frank rollback
No need to dump central clearing and electronic trading mandates, market participants say
CCP default risks not correlated, CFTC finds
Timothy Massad: stress tests reveal “quite a bit of diversification” in CCP exposures
Central clearing boosts welfare but margin matters – RBA paper
Study shows how central counterparties boost welfare by insuring against counterparty credit risk, but gains are sensitive to the level of margin
‘Unlikely’ London’s financial hub will move to Europe – BoE’s Cunliffe
BoE deputy says London’s “complex financial ecosystem” is not easily transplanted; warns moving euro clearing system across channel would increase costs
ESRB publishes guide to OTC derivatives database
Draghi repeats pledge to extend central clearing regulation to all forms of derivatives; ESRB paper sheds light on “opaque” markets
CPMI-Iosco issues report on key data for future derivatives reporting
Report sets out working group’s proposals for how OTC derivatives products should be reported to trade repositories using unique identifiers
Credit, liquidity and collateral versus more intermediation
Richard Heckinger examines the costs and benefits of complex financial market infrastructure regulations, including the impact of new layers of intermediation
Network analysis sheds light on systemic risk – BoE paper
Pilot study of derivatives markets makes use of CDS data to map network of interlinkages, finding more than just immediate counterparty ties matter for systemic risk
European supervisors raise ‘strong concerns’ over Commission’s delay in derivatives regulation
Three European cross-border supervisory authorities challenge European Commission over implementation of standards; delay could have "significant negative impact"
Divergent monetary policies are top concern for reserve managers in 2016
Reserve managers view divergent monetary policies among the world’s top central banks as the most pressing challenge they face in 2016; asset and currency diversification continues
Esma criticises European Commission plans for regulating NFCs
“Significant drawbacks” present in European Commission’s proposed approach to regulating non-financial corporations’ derivatives transactions, European Securities and Markets Authority argues
BoE paper: CCP legal framework may need work
Process of handling default is legally robust in many cases, but has room for improvement in others, authors say
Vítor Constâncio calls for macro-prudential tools to reach beyond banks
Authorities should be granted wider powers over alternative investment funds and shadow banking sector, including margins and haircuts on derivatives and securities financing, Constâncio says
RBI report lays ground for trading new derivatives
Working group proposes allowing new interest rate options in India to improve financial institutions' ability to hedge interest rate risk
China permits central banks to trade forex derivatives based on Isda agreements
China allows derivatives trading based on international standard agreement for the first time; applies only to sovereign investors and foreign exchange derivatives
Difficult liquidity conditions are here to stay, say Asia conference panellists
Gapping moves in spot markets and higher prices for clients in FX derivatives are here to stay, as banks pull back from market-making in non-core currencies, panellists warn