Companies Slow to Adopt Libor Replacement

By Daniel Kruger and Telis Demos May 20, 2019, The Wall Street Journal Companies are dawdling in their adoption of the Federal Reserve’s preferred replacement for the interest-rate benchmark underpinning trillions of dollars in financial contracts. Borrowers led by...

Negative Rates, Designed as a Short-Term Jolt, Have Become an Addiction

By Brian Blackstone May 20, 2019, The Wall Street Journal For five years, European nations have been trying to jump-start their ailing economies with what was supposed to be a radical, short-term remedy — negative interest rates. Instead, central...

Fed chair tempers fears over corporate debt meltdown

By Sam Fleming May 20, 2019, Financial Times Hefty quantities of debt could impose severe strains on some U.S. businesses in a downturn but the borrowings do not present a threat to the overall stability of the financial sector,...

Fannie, Freddie need to raise capital before privatization: FHFA’s Calabria

By Richard Leong May 20, 2019, Reuters Fannie Mae and Freddie Mac need to build adequate capital as a critical step toward privatizing them, the head of their regulator said on Monday, more than a decade after the government...

Repos becoming the bedrock of market capital liquidity

By Maddie Saghir May 16, 2019, Securities Lending Times Repos are the most widely and commonly used securities finance transactions and are fast becoming the bedrock of market capital liquidity, according to one speaker during a presentation at this...

Lack of buy-side repo backstop a concern – Citi repo head

By Lukas Becker May 20, 2019, Risk With buy-side repo books swelling in recent years, a senior Citi executive has expressed concern about the lack of a liquidity backstop to help these entities in times of stress. The buy...

U.S. G-SIBs keep on expanding repo books

By Abdool Fawzee Bhollah May 17, 2019, Risk Quantum Systemically important U.S. banks built up their repo exposures in the first three months of the year and JP Morgan led the way with a 9% increase on the prior...

Brexit to have negative affect on collateral management harmonization

By Maddie Saghir May 16, 2019, Securities Lending Times Over half, 52%, thought that having London outside the E.U. will have a negative impact on collateral management harmonization, according to those surveyed at Vermeg’s Annual Collateral Management Conference. The...

GOP goes to bat for banks in risky move to boost growth

By Zachary Warmbrodt May 19, 2019, Politico Congressional Republicans, looking to boost the economy as an election year approaches, are pushing for a politically risky solution to help ward off a slowdown: rolling back regulations on the nation’s booming...

E.U. trio tries to quicken drive to more integrated capital markets

By Jim Brunsden May 16, 2019, Financial Times France, Germany, and the Netherlands have issued a joint call for more integrated capital markets in Europe, warning that Brexit had left the bloc facing “an urgent strategic issue”. The three...

Fund-linked structured products face extinction under FRTB

By Samuel Wilkes May 20, 2019, Risk A few years from now, trading book capital standards threaten to do to fund-linked structured products what humans did to the dodo more than three centuries ago: wipe them out. And just...

Banks rethink fund-linked trades ahead of FRTB

By Samuel Wilkes May 17, 2019, Risk With spikes in capital requirements on the way, European banks are fretting over how to avoid ending up with mispriced trades in structured products linked to funds. Already, some banks have stopped...

Are interest rates headed back to zero lower bound?

By Gary Siegel May 17, 2019, The Bond Buyer Federal Reserve officials steadfastly proclaim their patience on rate changes and many, most notably Board Chair Jerome Powell, have said they see no reason to change rates up or down....

PRIIPs continues to restrict bond supply to retail investors

By Thomas Helm May 16, 2019, Practice Insight from IFLR The rigid disclosure requirements of the E.U.’s PRIIPs regulation, together with uncertainty surrounding the scope of the regulation, are still causing corporate bond...

Regulators cut banks some slack on shift away from Libor

By Philip Stafford May 14, 2019, Financial Times Global markets regulators are beginning to consider concessions to help banks struggling to shift away from the Libor lending benchmark. Banks have complained for months that abandoning the discredited Libor benchmark...

ISDA consults on Libor pre-cessation issues

By James Thursfield May 16, 2019, Global Investor Group The International Swaps and Derivatives Association (ISDA) has released two consultation papers, one of which addresses pre-cessation issues related to Libor and other Ibor contracts. On May 16, ISDA published...

Moody’s: ‘Window is fast closing’ to limit Libor disruption

By Mike Sheen May 16, 2019, Investment Week Less than a third of global non-bank financial institutions such as asset managers have taken action to limit risks associated with the phase out of Libor and other banking reference rates,...

Fed’s Lieber urges switch away from Libor, says it is raising systemic risks

By Virginia Furness May 17, 2019, Reuters Using the London interbank offered rate (Libor) for financial contracts is increasing systemic risks and market participants must ditch it in favor of a new risk-free rate, the Federal Reserve Bank of...

BOE’s Woods warns against post-Brexit weakening of bank rules

By Huw Jones May 16, 2019, Reuters Weakening rules for banks and insurers after Brexit would be “anathema”, but Britain could change its style of regulating to respond faster to change, Bank of England Deputy Governor Sam Woods said...

Debt bubbles could burst as economies slow, threatening stability, bankers warn

By Virginia Furness May 16, 2019, Reuters Heavy reliance on debt financing and slow economic growth are leading to the creation of debt bubbles which risk destabilizing the entire financial system should a major shock occur, bond bankers and...

Banks to invest around $50 million in digital cash settlement project – sources

By Anna Irrera May 16, 2019, Reuters Several of the world’s largest banks are in the process of investing around $50 million to create a digital cash system using blockchain technology to settle financial transactions, according to people familiar...

Treasury Official Hired to Fix Fannie and Freddie Is Leaving

By Emily Flitter May 16, 2019, The New York Times When Craig S. Phillips, a veteran Wall Street mortgage trader, agreed to join the Treasury Department as a top aide to Secretary Steven Mnuchin in 2017, his mandate was...

Fed Officials Reveal More Doubts About Inflation Dynamics, but See Few Solutions

By Nick Timiraos May 16, 2019, The Wall Street Journal Federal Reserve officials thought inflation would be running solidly at their 2% target this year. It isn’t. And they are puzzled over why and what they should do about...

Fannie, Freddie need strong capital position to exit conservatorship: FHFA chief

By Hannah Lang May 14, 2019, American Banker In his first public policy discussion as director of the Federal Housing Finance Agency, Mark Calabria stressed that a strong capital position will determine the future for Fannie Mae and Freddie...

U.S. regulator throws sand in the wheels of high frequency traders

By Richard Henderson May 15, 2019, Financial Times The highly profitable world of high frequency trading is under threat after the U.S. derivatives regulator allowed a futures exchange to slow down activity on its platform. Atlanta-based Intercontinental Exchange will...

CFTC’s Berkovitz puts his weight behind position limits

By Stella Farrington May 15, 2019, Risk Dan Berkovitz, a Democratic member of the US Commodity Futures Trading Commission, has voiced his backing for a new rule on speculative position limits, which the agency is expected to consider before...

Europe prepares raft of post-Brexit banking reforms

By Huw Jones May 15, 2019, Reuters The European Commission is working on its biggest regulatory push on banking since the 2008 financial crash that could curb Britain’s access to the bloc, according to an internal draft document seen...

New inflation calculation clips buy-side

By Ben St. Clair May 15, 2019, Risk Some buy-side inflation traders are still smarting after an adjustment to Europe’s primary inflation index in February stalled markets and left investors scratching their heads. The confusion started with a change...

FCA keen to press on with non-Brexit issues

By Louisa Chender May 14, 2019, Global Investor Group The Financial Conduct Authority’s (FCA) chief exec said the regulator is keen not too lose sight of the other big issues on its agenda amid ongoing uncertainty around Brexit. In...

Initial margin ‘big bang’ could be deferred, says EC’s Pearson

By Costas Mourselas May 14, 2019, Risk A top European Commission official has hinted that the final phase of initial margin rules for non-cleared derivatives trades could be deferred, encouraging the industry to “keep on banging the drum” on...