Risk magazine
Markets are not magic
Despite their pervasive contributions to economic growth and efficiency, it is important to remember markets are not magic when transparency fails, argues David Rowe
Permission to fail
Richard Baker, head of the Managed Funds Association, the Washington, DC-based industry body, talks to Alexander Campbell
Counterparty maze
Regulators in the US and Europe are evaluating the concept of a central trade repository for over-the-counter derivatives as a means of increasing transparency and allowing better detection of systemic weaknesses. But will they be able to overcome the…
Sell suits
A number of lawsuits have emerged across the globe, with disgruntled corporates alleging they were sold unsuitable derivatives products and were unaware of the risks involved. Will changes to bank selling practices emerge as a result? By Christopher…
Value added
Valuation remains a major focus for banks and regulators. In this Class Notes article, Charles Smithson examines the academic approaches to valuation and applies them to structured credit assets
Net benefit
Meant to minimise counterparty risk, the idea of clearing for credit derivatives has been riddled with questions from the outset. But new research suggests the plans might actually increase counterparty exposures. Mark Pengelly investigates
CEBS: bank disclosures lack detail
The level of disclosure in the 2008 annual reports of major banks was better than the preceding year, but there is still much room for improvement, the Committee of European Banking Supervisors (Cebs) said on May 28.
SEC charges brokers with CMO fraud
The US Securities and Exchange Commission (SEC) has charged 10 brokers from California-based Brookstreet Securities - a now-defunct broker-dealer - with fraud for mis-representing the risks involved in collateralised mortgage obligations (CMO) to…
LCH.Clearnet to offer SwapClear to the buy side
London-based clearing house LCH.Clearnet discusses with Risk its plans to make the SwapClear over-the-counter interest rate swaps clearing platform available to buy-side clients in the fourth quarter of this year.
CDSs tighten on US financials
The cost of credit protection on US banks fell in Asian and European trading today.
PPIP banks may be able to buy rivals' toxic assets
The US Treasury's behind-schedule Public-Private Investment Program (PPIP) could face difficulty in attracting banks to participate in the scheme, while policymakers are considering whether to allow banks to buy each other's assets.
IASB proposes simplifying fair-value measurement
The International Accounting Standards Board (IASB) has sought to simplify its standards on fair-value measurement, bringing International Financial Reporting Standards (IFRS) further into line with US Generally Accepted Accounting Principles (Gaap).
FSA stress tests banks for four-year downturn
Banks in the UK must stress test their capital levels against a "worst-case" recession more severe than any since World War II, the Financial Services Authority revealed today.
CDSs on US financials widen
The cost of credit protection on major US banks rose in Asian and European trading today.
Syncora worth 15%, according to credit derivatives auction
A May 27 auction has determined a final settlement value of 15 cents on the dollar for credit default swaps (CDSs) referencing Bermuda-based Syncora Guarantee, the monoline formerly known as XL Capital Assurance.
Australia lifts ban on short selling
The Australian Securities and Exchange Commission (Asic) lifted its ban on covered short selling on May 25, just over seven months after it was originally imposed.
CDS spreads tighten on Japanese firms
The cost of credit protection fell on Japanese electronics companies in Asian and European trading today, while remaining steady on US and European financials.
EU overhaul of financial supervision raises questions
Ambitious plans laid out by the European Commission to revamp the supervisory framework of the European financial markets have raised concerns about the possible implications of creating new supervisory bodies.
Optimal pays $235 million to Madoff trustee
Optimal Investment Services, the Switzerland-based asset management arm of Banco Santander, has agreed to pay $235 million to the trustee responsible for liquidating Bernard Madoff's investment management firm, Bernard Madoff Investment Securities (BMIS).
Markit and DTCC's OTC services merger could close by end of June
The merger of London-based Markit's and New-York-based Depository Trust & Clearing Corporation's (DTCC) trade-processing services is expected to become official within six weeks.
FDIC taps insured banks for funds as reserves dwindle
The Federal Deposit Insurance Corporation (FDIC) is to levy an additional five-basis-point special assessment charge on depository institutions at the end of the third quarter to boost its fast-dwindling deposit insurance fund (DIF).