The Dodd-Frank requirement that standardized OTC derivatives contracts be cleared through regulated central counterparty clearing houses (CCPs) is causing many to ask if the reform will backfire and lead to a new concentration of risk among CCPs, rendering them “too big to fail.” The issue was a key point of Andrea Kramer, a… Read More >>
Sifma Panel Urges Pragmatism for OTC Overhaul
Panelists taking part in a Sifma conference last week said they have made progress in getting some US regulators to take a more pragmatic approach in reforming the over-the-counter (OTC) derivatives market. However, securities firms will still have to brace themselves for the IT management challenges, new capital allocation and margining burdens, and revamped business… Read More >>
The CFTC Delay
The decision last week by the Commodity Futures Trading Commission to allow six more months before implementing key regulations spawned by the Dodd-Frank Act is a necessity. It will give the industry the time needed for a sweeping overhaul of the $600 trillion derivatives market. Yet it would be a mistake to think that regulators… Read More >>
A Few Missed Lessons from the Great Recession?
US Treasury Secretary Timothy Geithner said this week he wants new global standards governing derivatives trades. Essentially, if major global financial centers are singing from the same regulatory hymnal, regulatory arbitrage opportunities go away. But, US regulators are pushing for reforms well in advance of Europe. File this one under the “We really should have… Read More >>
Q&A: CME Group Readies Open OTC Clearing Solutions
Mark Cox has served as director of clearing solutions and services at the CME Group since February 2010. His team is responsible for the design and delivery of clearing services for interest rate swaps (IRS), credit default swaps (CDS), foreign exchange (FX) and commodity over-the-counter (OTC) clearing initiatives globally. He also is responsible for all… Read More >>
Q&A: Bruel Says OTC Clearing May Cause Financial Burdens
As part of his role as research director at TowerGroup’s Capital Markets practice, Stephen Bruel has focused on the operational and risk management challenges of over-the-counter (OTC) derivatives, including IT, collateral management and market structure issues. Bruel joined TowerGroup from State Street’s Wealth Manager Services group, helping expand the technology solutions for the firm’s global… Read More >>
Dangerously Exposed?
The rise of the Swaps and Derivatives Market Association (SDMA) is the story of many Davids taking on several Goliaths over a powerful idea—democratizing clearing for over-the-counter (OTC) derivatives such as credit default and interest rate swaps. In its first year, the SDMA has garnered more than 20 public and private members, engaged powerful Congressional… Read More >>
SDMA vs. ISDA?
As the advocacy role of the Swaps and Derivatives Market Association (SDMA) evolves, industry participants will inevitably compare it to the International Swaps and Derivatives Association (ISDA), which has been in existence since 1985.“We’re not really in competition with ISDA—it’s done a fabulous job, historically, of addressing the needs of a bilateral marketplace,” says Jamie… Read More >>
The Regulators and OTC Clearing
In accelerating the move to clearing, US regulators risk rushing out reforms for OTC derivatives that may do more harm than good. That was the thoroughly anecdotal consensus at FTF’s 3rd Annual OTC & Exchange Traded Derivatives Ops Conference in Chicago this past Monday. Conference panelists and participants drove home that point and others as… Read More >>
The End of Bilateral Darkness?
A major story that got scant attention in the US is the European Union’s investigations into whether a financial technology vendor, a clearinghouse and major banks engaged in antitrust activities in the credit default swaps (CDS) market. The EU action is similar to one started by US authorities in 2009 and both efforts, along with… Read More >>
