Risk magazine
The bespoke conundrum
The dealer community has pushed towards standardisation of credit default swaps contracts, enabling them to meet a regulatory goal of ensuring a large chunk of the credit derivatives market is cleared through central counterparties. What implications…
The art of debt
Governments across the globe face huge increases in borrowing requirements, sparking concern over possible rating downgrades, while many have seen their credit default swap spreads widen dramatically. Despite this, sovereign debt management offices claim…
Clear benefits
Mark Yallop, chief operating officer, Icap, talks to Alexander Campbell
Retention rage
The European Parliament and the US Treasury are pushing ahead with plans to introduce retention charges for securitisation deals in an effort to align the interests of investors and originators. But market participants complain the move is ill-conceived…
Avoiding dividend meltdown
Dealers are starting to pay closer attention to dividend risk housed on their exotic books after many incurred sizeable losses last year. What are banks doing differently and can another dividend meltdown be avoided? Matt Cameron reports
The reality of risk-free
Warnings over the stability of the UK's AAA rating by Standard & Poor's in May have caused analysts to question whether other AAA rated sovereigns - including the US - are at risk of downgrades, given ballooning debt levels. What implications does this…
Tales of leverage
Regulators are proposing the introduction of leverage caps on banks. However, Satyajit Das argues leverage achieved through derivatives does not always show up in traditional leverage measurements
Fostering opacity
'Too-big-to-fail' is not just a moral hazard problem, it positively fosters dangerous opacity, argues David Rowe
Central concerns
The European Central Bank (ECB) has been pumping liquidity into the financial markets since August 2007, extended the list of assets eligible as collateral for credit operations and cut rates to record low levels. Jose Manuel Gonzalez-Paramo, a member of…
The Bair necessities
Federal Deposit Insurance Corporation chairman Sheila Bair has argued that systemically important financial institutions should hold more capital as a disincentive to growth, while a new entity should be set up to manage the orderly resolution of…
Yen for yield
The Japanese government inflation-linked bond market has received a severe battering over the past year. The resulting dislocation has prompted the Ministry of Finance to consider restructuring the market, but what options are on the table? Matt Cameron…
Building up Basel II
In an exclusive interview with Risk, Stefan Walter, secretary-general of the Basel Committee on Banking Supervision, discusses everything from capital to pro-cyclicality, while outlining the reform agenda for Basel II. Rob Davies reports
The data dilemma
While institutions continue to put huge resources into creating standard repositories holding 'golden copies' of financial data, there is growing support for the view that the industry would be better off standardising the data at source, and thereby…
Too many cooks?
The financial crisis has revealed the failure of regulators to detect major threats to the stability of the financial system in advance. A number of new authorities are now emerging to monitor systemic risk, but is it possible problems could still fall…
Tarp warrant sales could drive down vol on financials
The US Treasury's plan to dispose of warrants in banks held under the Troubled Assets Relief Program (Tarp) could have a significant impact on the options market, according to analysts.
New agreement on restructuring for European credit default swaps
European credit derivatives dealers have revised the details of a proposal to integrate restructuring as a credit event into the auction settlement process for credit default swaps (CDS), in preparation for the launch of the so-called ‘small bang'…
AIG warns of potential losses in CDS portfolio
AIG could be exposed to further losses on the super-senior credit default swap (CDS) portfolio held by its subsidiary AIG Financial Products (AIG FP) should credit markets continue to deteriorate, according to a filing the company made to the US…
Madoff sentenced to 150 years as investigations into feeder funds continue
Bernard Madoff was sentenced to 150 years in prison in the Manhattan federal court yesterday.
CDS spreads tighten on US financials
The cost of credit protection on major US financials fell in today's European and Asian trading.
Eurozone dips into deflation, but high inflation still a risk
Inflation in the eurozone turned negative in June for the first time since the single currency was set up in 1999, but rising commodity prices are likely to push inflation back up soon across the world, some analysts believe.