Derivatives
CCP default risks not correlated, CFTC finds
Timothy Massad: stress tests reveal “quite a bit of diversification” in CCP exposures
Central clearing boosts welfare but margin matters – RBA paper
Study shows how central counterparties boost welfare by insuring against counterparty credit risk, but gains are sensitive to the level of margin
‘Unlikely’ London’s financial hub will move to Europe – BoE’s Cunliffe
BoE deputy says London’s “complex financial ecosystem” is not easily transplanted; warns moving euro clearing system across channel would increase costs
ESRB publishes guide to OTC derivatives database
Draghi repeats pledge to extend central clearing regulation to all forms of derivatives; ESRB paper sheds light on “opaque” markets
CPMI-Iosco issues report on key data for future derivatives reporting
Report sets out working group’s proposals for how OTC derivatives products should be reported to trade repositories using unique identifiers
Credit, liquidity and collateral versus more intermediation
Richard Heckinger examines the costs and benefits of complex financial market infrastructure regulations, including the impact of new layers of intermediation
Network analysis sheds light on systemic risk – BoE paper
Pilot study of derivatives markets makes use of CDS data to map network of interlinkages, finding more than just immediate counterparty ties matter for systemic risk
European supervisors raise ‘strong concerns’ over Commission’s delay in derivatives regulation
Three European cross-border supervisory authorities challenge European Commission over implementation of standards; delay could have "significant negative impact"
Divergent monetary policies are top concern for reserve managers in 2016
Reserve managers view divergent monetary policies among the world’s top central banks as the most pressing challenge they face in 2016; asset and currency diversification continues
Esma criticises European Commission plans for regulating NFCs
“Significant drawbacks” present in European Commission’s proposed approach to regulating non-financial corporations’ derivatives transactions, European Securities and Markets Authority argues
BoE paper: CCP legal framework may need work
Process of handling default is legally robust in many cases, but has room for improvement in others, authors say
Vítor Constâncio calls for macro-prudential tools to reach beyond banks
Authorities should be granted wider powers over alternative investment funds and shadow banking sector, including margins and haircuts on derivatives and securities financing, Constâncio says
RBI report lays ground for trading new derivatives
Working group proposes allowing new interest rate options in India to improve financial institutions' ability to hedge interest rate risk
China permits central banks to trade forex derivatives based on Isda agreements
China allows derivatives trading based on international standard agreement for the first time; applies only to sovereign investors and foreign exchange derivatives
Difficult liquidity conditions are here to stay, say Asia conference panellists
Gapping moves in spot markets and higher prices for clients in FX derivatives are here to stay, as banks pull back from market-making in non-core currencies, panellists warn
Can inflation derivatives help the ECB hit its inflation target?
The ECB could reinforce its pursuit of price stability by using inflation derivatives should current tools prove insufficient or the implementation of QE encounter technical difficulties
Thai Government Pension Fund eyes deeper bond futures market
Thailand's $23 billion Government Pension Fund is one of the institutions that wants to see the country's bond futures market build on the progress already made in equity and forex derivatives
New swaps margin hub aims to solve disputes pre-call
Matching up risk factors should avoid collateral headaches, hub hopes
CSRC's Xiao Gang on major reforms to deepen capital markets in China
China Securities Regulatory Commission chairman Xiao Gang speaks about efforts to comprehensively reform the operation of China's capital markets
Leverage ratio begins to bite for FX derivatives
The capital-intensive rule for banks, which has already affected the rates and credit world, is starting to hit FX - with clients expected to bear the brunt of higher costs
Bank of Mexico lays out new rules for local derivatives
Interest rate swaps will have to be traded on electronic platforms and derivatives exchanges and transacted through clearing houses, according to new rules
India to become netting friendly on bankruptcy law reform
Different treatment of public and private banks stymied netting - but this could now change
RBI official says India corporates need to increase forex hedging
Potential US rate rise puts rupee depreciation back on the table; executive director at RBI raises concern over corporate balance sheets
BoE researchers posit dual model of interbank markets
Working paper separates exposures from funding to show the two parts of the interbank market have different structures; large ‘core’ banks present contagion risk