Non-cleared trades
Buy-side physical FX clearing at LCH faces scepticism
Lack of clearing mandate and settlement wrangles mean demand for putative service remains weak
Acadiasoft brings IM standards in-house with Quaternion buy
Deal will help data standardisation efforts and cut outsourcing risk in Simm calculation service
Margin rules snare FX options users
US banks forced to post margin on ‘naked’ trades, with buy-side firms soon to follow
Systemic US banks crushed cleared OTC notionals in Q2
Outstanding amounts fall 12% quarter-on-quarter
The FX swaps client clearing comeback
Chatter about the service is picking up again, but significant hurdles remain
The unintended impact of swap stays on financial stability
As swaps leverage shrinks, bankruptcy stay rules are not guaranteed to reduce systemic risk, says economist
Systemic eurozone banks expand cleared portfolios
BNP Paribas is an outlier, having ratcheted up bilateral trading since 2013
Non-cleared euro swaps market wrestles with discount rate switch
Buy-siders prepare for valuation change from move to €STR
HSBC trading unit hit by $355m of XVA costs in H1
Wider spreads continued to eat into derivatives values
The unintended impact of collateral on financial stability
Initial margin requirements for OTC derivatives can increase risk of contagion, writes economist
JP Morgan posts $510m XVA gain
Benefit reverses some of the previous quarter’s record loss
EU banks expect further margin reprieve for equity options
Exemptions for intra-group and equity options from non-cleared margin rules expire by January 2021
CFTC advisory body backs six-month initial margin ‘grace period’
Majority vote to recommend extra six-month extension for phases five and six of initial margin rules
Simm may come with a side benefit – a common data standard
Buy-side firms using Acadiasoft for Simm calculations must adopt the ORE XML data format
European banks seek capital relief for CVA hedges
Volatile trading in March caused CVA hedges to dominate market risk RWAs at some smaller dealers
Initial margin delay disadvantages DBS
Rivals UOB and OCBC enjoy another year of pricing flexibility
Delay to IM calculation window leaves some exasperated
“Hasty” decision by global rule-makers frustrates firms that had already started initial margin prep
Brevan’s Burgess jumps to outsourcing spin-off Coremont
Aneta Bresliska will replace Jasmine Burgess as Brevan Howard’s head of risk in the US
JP Morgan takes $951m XVA hit
Funding spread widening blamed for majority of Q1 hit
After coronavirus rout, concerns raised about Simm
Annual recalibration means March volatility will not be reflected in margin until end-2021
Industry calls for suspension of IM compliance dates
Associations warn phase five deadline may no longer be possible for hundreds of buy-side firms amid Covid-19 disruption
EC: No plans to delay IM phase five
EC official says Europe will go ahead with phase five initial margin requirements set to come into effect in September
Systemic US banks shed more than $7trn of non-cleared swaps in 2019
Cleared notionals stay flat on the year
India preps margin regime as parliament debates netting law
Lawmakers thrash out bill on close-out netting; margin rules likely to follow in H1