Challenges and opportunities
Tentative on G-20 timelines
Credit Suisse, Deutsche Bank and JP Morgan expect demand for spread volatility protection on covered bonds
The LEI vision
China launched its version of the credit default swap market nearly 18 months ago – yet activity has almost ground to a halt due to a combination of inflexible rules, lack of standardisation, and an approach to the concept of credit default that is...
Latest proposal extends number of silos from five to 17, mirroring approach taken by LCH.Clearnet
An auction to settle the Greek sovereign CDS goes smoothly, but some participants argue the documentation needs to be revisited
S&P Indices launches equally weighted proxies that measure the quality of US and European banks in conjunction with Isda, the trade body for the global OTC derivatives industry
Final rule forbids documentation revealing identities or limiting counterparty choice
Dealers are concerned that intra-day margin call guidelines, which they claim could drain up to $500 billion from financial markets, could make it into final CPSS/Iosco principles
Fears that a different approach to over-the-counter derivative regulations in Asia could prompt regulatory arbitrage with Europe and North America have been laid to rest by Singapore’s February consultation on OTC derivatives, explains Cindy Leiw of...
Current methodology to calculate a close-out value following the exercise of a break clause results in inaccuracies, claim dealers
Breaking with tradition
Beyond Basel 2.5
An early trigger is unlikely, but fears of distorted auction outcome remain – and could undermine the use of credit default swaps as a hedge, say market participants
Comment letters from Isda and Bank of Montreal argue Basel Committee proposal on DVA deductions goes too far
Downgrade termination costs
Singapore regulator wants central clearing but is agnostic over where it takes place
Billions of dollars in capital could be excluded under Basel proposals on derivatives DVA - with US banks hardest hit
The development of an index CCDS product will help market participants hedge counterparty risk, say proponents
Back to the drachma?