Week InReview: January 23, 2015

Davos "Word of the Year" May Be Lukewarm, but the Tweets Were Great | (Jan. 21) Guess what the word of the year is in Davos. Deflation? Pandemics? Inequality? Nope. The unofficial word of the year, plastered over the program of the World Economic Forum's annual meeting in the Swiss Alps, is ... context. Read more.


FDIC Approves Rule After Swaps Industry Change | (Jan. 21) The Federal Deposit Insurance Corporation board, in 4-1 vote, approved action to harmonize new capital and liquidity rules with industry move establishing temporary stays of derivatives contracts when a major bank fails. The regulator proposes aligning bank capital rules with an international agreement on derivatives that involves big-bank wind-downs. Planned changes mean regulatory capital treatment of swaps wouldn't be affected by foreign resolution regimes. Read more.


Fed Working With Dealers to Find Libor Alternatives | (Jan. 20) Federal Reserve Governor Jerome Powell said the central bank has convened a group of the largest global dealers to work with the Fed in promoting alternatives to U.S. dollar Libor, a series of benchmarks for about $300 trillion in financial securities worldwide. Read more.


The 'Toxic Flow' of High-Speed Trading Algorithms | (Jan. 20) Companies such as GTS and Virtu are helping banks' currency desks by providing them with an additional source of prices to quote to their customers in the $5.3 trillion-a-day foreign-exchange market, which has suffered a rate-fixing scandal, last year's record-low volatility and a thicket of regulations intended to prevent a repeat of the financial crisis. Read more.


Timetable for Swaps Margin Rules Under Review, EU Watchdog Says | (Jan. 19) The European Securities and Markets Authority i("ESMA") s holding talks with global regulators such as the International Organization of Securities Commissions ("IOSCO")  on the timetable for introducing minimum margin requirements for non-centrally cleared derivatives. Current timetable would see rules phase in over a four year period beginning December 2015. Read more.