Friday, May 1, 2015

OTC derivatives markets contracted 9% in 2H2014

Amount now $630 trillion, says BIS

(Apr. 30) Over-the-counter derivatives markets contracted in the second half 2014, according to the Bank for International Settlements. The notional amount of outstanding contracts fell by 9 percent between the end of June 2014 and the end of December 2014, from $692 trillion to $630 trillion, BIS says in report on their website. Central clearing, a key element in global regulators' agenda for reforming OTC derivatives markets to reduce systemic risks, made further inroads.

Lawmakers unhappy with global insurance regulators

Senate Banking outlines concerns to federal regulators

(Apr. 27) Senators, along with industry and state regulators, are concerned that they are being kept in the dark by international insurance regulators. The Federal Insurance Office's (FIO) director and the Fed's deputy director for banking supervision and regulation disagree, and believe the international process is providing more, not less, transparency.

Clearinghouse deal eyed by May 7

Would end EU-U.S. swaps rule spat

(Apr. 29) The European Union and the U.S. will try to break a deadlock over clashing swaps rules in a bid to avert fault lines in global markets and to spare banks unnecessary costs. The aim is to reach a deal before Jonathan Hill, the member of the EU Commission responsible for financial services policy, meets with CFTC Chairman Timothy Massad in Brussels on May 7. The key outstanding issue is how to overcome differences in initial margin rules. Massad says the discussions probably won't result in public announcement of a deal.

Here's the old nemesis again

And it's starting to spook bond traders

(Apr. 27) Three months ago, bond traders were bracing for deflation in the U.S. Now, they're starting to worry about inflation, and snapping up a record share of Treasuries that offer some protection. So what's changed? Part of the answer, of course, has to do with oil. But perhaps just as important is the bond market's changing perception of the Federal Reserve.

Binge Reading Disorder

In case you miss all of the above this weekend

Drinking Through A Diversity Hangover: What if investors don't want diversity in asset management? (CIO)
The Great Inflation Conundrum: How do you hedge a risk when the tool box is so small -- and everyone wants to use it? (Chief Investment Officer)
U.S. Money Managers Turn Cautious, Reining in Their Optimism Since the Fall (Barron's)
Can Bankers Behave? Government regulators begin to question whether financial institutions can be reformed at all. (The Atlantic)
The Death of Cash: could negative interest rates create an existential crisis for money itself? (Bloomberg)

Transparency. Inclusiveness. Consensus.