With adjustments to Basel III nearing completion, it's not clear whether client clearing ROE can be rendered sustainable by clearing fee increases alone. Here I look at a way to reduce capital burdens of bank clearing members by eliminating client-driven exposures whilst keeping banks providing client clearing - the Pure Agency client clearing model.
ACER recently issued their first “REMIT Quarterly” (here) which is a newsletter giving updates about progress and issues around the REMIT Initiative.
To help institutions comply with guidelines surrounding operational risk, Shigatsu Baka Financial Technologies (SBFT) has developed a new technology system to help firms cope with "Fat Finger" trading errors, a common problem on trading desks.
The European Securities and Markets Authority (ESMA) has published today an update of its list of central clearinghouses (CCPs) which are authorised under the European Markets Infrastructu
There is currently something of a big data revolution taking place as processing speeds increase and hardware costs decrease. Many banks already perform pre-trade data runs, generating millions of scenarios when performing Monte Carlo simulations to calculate CVA.
With regard to systemic counterparty risk reduction the bank regulators' minimum capital, liquidity reserve and margin levels are a major incentive. The current fine-tuning debate and regulatory rule adjustment are understandable given the financial implications.
By contrast the lack of discussion of clearing mandates might imply they are a straight systemic counterparty risk win through promotion of consolidation, netting and margining in CCP facing portfolios. Unfortunately it is not that simple - clearing mandates also entrenching bilateral counterparty risk by limiting key risk reduction techniques.
Here I explore these limitations and suggest some solutions.
The European Securities and Markets Authority (ESMA) has today issued the 12th update of its Q&A document on the implementation of the European Markets Infrast
Rocket 3 is now available as an on-line edition formatted for tablets and computer screens.
The Rising Cost of Trade Reporting: Can Firms Afford to Stay Compliant?
With financial institutions increasingly adapting to regulatory demands and expectations, risk professionals face additional burdens to ensure industry standards are upheld alongside further challenges with emerging risks.
Imagine an IRS and a Bund Future cleared within two CCPs, or both cleared at Eurex via PRISMA to achieve cross-margining. The resulting drop in IM is dramatic.
Mark Croxon may have the best beard in Finance, but won't for much longer - if you can sponsor his shave-a-thon he'd be grateful.
Reader statistics were last provided on the 12th of December, and we’re pleased to announce we now have more than 2,000 registered readers, including 344 new readers since our last report in December 2014, in addition to casual daily visitors.
In my last article I reviewed the SEC’s final and proposed rules on transaction reporting by market participants. In this article I will look at the final rule on SDRs, and make some observations on the effectiveness of current and future reporting regimes.
NetOTC updates it's website to describe two new services to address the un-cleared OTC market
One of the biggest challenges for both the Buy Side and Sell Side with the introduction of mandatory OTC Clearing is the posting of the required collateral for initial margin requirements at the clearing house on a daily basis.