Risk magazine
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).
Hypo Real Estate appoints new CEO
Axel Wieandt will take over from Georg Funke as chief executive of Hypo Real Estate Holding (HRE), Germany’s second-largest commercial property lender, on October 13.
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).
Ted spread continues to climb
The Ted spread, which is used to measure perceived counterparty risk by tracking the disparity between three-month Libor rates and US Treasury bills, broke yesterday’s record high by 0.10%.
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.
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.
UK bank CDS spreads tighten on bailout news
The cost of credit protection on UK banks fell in early trading on Wednesday following the unveiling of a £50 billion recapitalisation plan by the UK government.
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).
"Fear index" hits high as Ted spread breaks 4%
The Ted spread, which tracks the difference between three-month Libor and US Treasury bills, hit yet another all time high today, reaching 4.03% at 1400 BST.
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.
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).
TriOptima reconciling 50% of collateralised OTC derivatives
Swedish technology company TriOptima’s portfolio reconciliation service, TriResolve, now reconciles more than 50% of all collateralised over-the-counter (OTC) derivatives transactions globally, up from 40% in June.
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…
Overnight Libor rockets
Overnight Libor shot up today as a tumultuous morning dented confidence in the interbank lending markets.
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.
Icelandic bank CDSs the riskiest in Europe
Fears over the future of Icelandic bank Glitnir grew yesterday despite a €600 million government intervention. Five year credit default swap (CDS) spreads on the bank reached 4620.5 basis points by close of trading, the highest of any European financial…
Paulson picks GS alumnus to run bailout
US Treasury Secretary Henry Paulson has picked Neel Kashkari, a fellow veteran of Goldman Sachs, to run the planned $700 billion financial bailout.
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.