High thresholds would reduce credit and funding benefits of two-way CSAs for banks, DSTA head says
Model risk comes from overuse of credit measures, as well as poorly constructed models, conference hears
Ice Clear Europe accepts gold for margin, while LCH.Clearnet is also working on extending eligible collateral
Insurance sector's hunger for high yields, rather than banks' thirst for short-term funding, driving liquidity trade
Ice Trust estimates it might have to increase initial margin by 63% to cover risk.
Profile: Alessandro Canta
Basel Committee’s Peter Praet acknowledges disagreement; Charles Goodhart warns lack of consensus will stop central banks acting to stem financial imbalances
Counterparty credit risk in portfolio risk management
The value of hedge books was hugely volatile during the crisis, forcing loan portfolio managers to think carefully about whether to monetise their gains. Those who chose not to saw windfall profits wiped out in a matter of weeks – but there’s still...
Clinging to collateral
Corporates to drive EM growth but watch financial market development, say Credit Institute panellists
Panellists in the Credit Institute forum on ‘Sovereign or Corporate, Global or Local’ said that corporates will drive credit growth in emerging markets, but investors cannot afford to ignore financial market development or to forgo due diligence.
Domestic banks in Singapore are starting to set up CVA desks at the behest of their regulator, but elsewhere in Asia there are significant obstacles to CVA
Chief strategist at CreditSights Louise Purtle warns that global deleveraging makes double-dip recession more likely than inflation.
European Financial Stability Facility secures triple A rating
US corporate restructuring and balance sheet improvements have drawn investor focus to corporate credit. But technical factors make financials look attractive.
Countering the credit challenge
Cutting counterparty risk has a price tag that might prevent smaller funds from changing their ways, experts fear
US insurance regulators turn their focus to CMBS
European Central Bank executive board member José Manuel González-Páramo acknowledges risks in central bank’s willingness to accept broad range of collateral
'An explosion of sovereign debt'
Cornered on collateral
Government agency looks to alleviate funding costs for bank counterparties in swaps transactions.
Portfolio managers accustomed to building books in neat blocks of $50 million may struggle to unwind such positions in the new liquidity-starved secondary markets.