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Kaupthing becomes latest Icelandic bank to default
The nationalisation of Iceland’s largest bank Kaupthing on Thursday constitutes a technical credit event, the International Swaps and Derivatives Association has confirmed.
Fed to lend additional $37.8 billion to AIG
The US Federal Reserve has stepped in again to help troubled insurance company American International Group (AIG), authorising the Federal Reserve Bank of New York to borrow up to $37.8 billion in investment-grade fixed income securities from AIG in…
Pimco in frame to run commercial paper purchase facility
The Federal Reserve Bank of New York has confirmed it is in talks with California-based bond fund Pimco to manage the government’s new commercial paper purchase facility (CPFF).
Bank of America and RBC in ARS settlement
Bank of America and Royal Bank of Canada (RBC) yesterday agreed to buy back up to $5.5 billion of auction rate securities (ARS) they issued, becoming the latest banks to reach an agreement in principle with the US Securities and Exchange Commission (SEC).
Russian liquidity boost on hold
A proposed $37 billion (950 billion RUB) liquidity injection for Russia’s biggest banks stalled in parliament yesterday, adding to Moscow’s financial troubles.
US may buy shares in troubled banks, Paulson says
US treasury secretary Henry Paulson hinted yesterday the US government could follow the UK's lead and take equity stakes in undercapitalised US banks, as well as intervening directly in the securities markets.
UK announces £500 billion bail-out plan
Daily news headlines
Icelandic banks in default
The International Swaps and Derivatives Association on Wednesday confirmed that the Icelandic government’s takeover of Landsbanki on October 7 and its acquisition of a 75% stake in Glitnir Bank on September 29 constitute technical credit events.
CME and Citadel plan CDS exchange
Chicago-based exchange operator CME Group and hedge fund management firm Citadel Investment Group are set to launch a fully integrated trading and clearing platform for credit default swaps (CDSs).
Rate cut not meant for financial markets, central banks say
Central banks around the world cut interest rates in the latest attempt to shore up the weakening economy today.
UK government unveils £50 billion bank recapitalisation plan
The UK government this morning announced a jumbo rescue package to recapitalise the country’s ailing banking sector.
Minibond trustee in Singapore searches for new swap counterparty
Singapore investors, which bought Lehman Minibonds, have requested the trustee of the products to consider all proposals for a new swap counterparty to replace Lehman Brothers for all series of the Minibond programme. The request came after the trustee,…
Hong Kong Minibond distributors may buy back products
Hong Kong distributors, which sold Lehman Minibonds to retail investors, could possibly buy back the products at the prevailing market price under a proposal put forward by the Hong Kong financial secretary. Under the proposal the trustee of the…
G30: regulation struggling to keep pace with modern finance
Financial regulation in many countries has been unable to cope with the speed of change in the financial services industry over recent decades, according to a report released on October 6 by the Group of Thirty (G30).
Federal Reserve to buy commercial paper from US banks
The US Federal Reserve has launched a new facility to purchase commercial paper from approved issuers in a further effort to provide liquidity to stricken bank funding markets.
Fed to treble lending
The Federal Reserve increased its Term Auction Facility (TAF) auctions by $300 billion on Monday, and expects its lending to reach $900 billion by November; three times the amount of liquidity provision given to date.
Auction determines settlement price for Fannie and Freddie
An auction to determine settlement prices on credit derivatives referencing Fannie Mae and Freddie Mac took place yesterday, making it by far the largest credit event fixing to have taken place since the process was first introduced in 2005.
Fannie and Freddie auctions raise questions about CDSs
The settlement prices on credit default swaps (CDSs) linked to Fannie Mae and Freddie Mac, determined at an auction yesterday, were heavily influenced by technical factors and raise questions about the efficacy of credit derivatives as a hedge, claim…
IMF estimates crisis losses at $1.4 trillion
The International Monetary Fund (IMF) on October 7 increased its estimate of losses on US-originated housing loans and associated securitisation products to $1.4 trillion from $945 billion.
German trade body publishes CDS to increase transparency
Deutscher Derivate Verband (DDV), the German derivative association, today began publishing credit spreads of certificate issuers in Germany on its website, alongside standard credit ratings. The DDV will now publish five-year credit default swaps (CDS)…
Bailouts fail to lift markets
The news of massive bank bailouts on both sides of the Atlantic failed to support the stock markets this morning - UK and European equities fell sharply in early trading, led by a weak financial sector.
BNP to liquidate Fortis' €10.4 billion toxic assets
BNP Paribas plans to liquidate €10.4 billion in impaired assets left ringfenced after the breakup of the Benelux bank Fortis, chief executive Baudouin Prot said this morning.
LCDX index roll postponed indefinitely
London-based data provider Markit is postponing the roll of its LCDX index of 100 North American loan credit default swaps (LCDSs) until negotiations for a new single-name US LCDS contract are finished.
Hypo Real recieves €50 billion bailout
The German government, along with Deutsche Bundesbank, financial regulator BaFin and a number of German banking and insurance representatives, has agreed on a €50 billion rescue package for property lender Hypo Real Estate after an earlier bailout…