Posts Tagged ‘swaps’
Christmas Comes Early For Hedgers of FX Swaps & Forwards Under Dodd-Frank
At long last, the U.S. Treasury Department on Friday came out with the final determination that FX swaps and FX forwards will be exempt from mandatory trading and clearing under Dodd-Frank.
Read MoreTwo years later, the Dodd-Frank train has left the station.
With the passing of the Swap Definition rule on Tuesday, July 10th the clock really starts ticking as some key rules are going into effect this fall. Any rational person would assume that before you write rules governing Swaps, you start with the simple task of defining the Swap. Unfortunately life in the derivative world…
Read MoreClearing the Way for Clearing: Cost vs. Benefits to End-Users
ISDA put out a great summary of some of the key issues on the future of clearing OTC derivatives versus the current benefits of bilateral collateral arrangements that exist today (http://isda.derivativiews.org/2012/04/24/the-bilateral-world-vs-the-cleared-world/), highlighting additional margin, capital charges, documentation and players. There has been much discussion already about the initial margin hit that end-users will take and…
Read MoreReady to Report? Swap Dealers May Need to Report to SDRs as Early as July 2012
It is hard to see how Swap Dealers, MSPs, SEFs and DCOs can realistically and properly plan and implement a technology undertaking of this magnitude without having SDRs approved, let alone ready to go themselves.
Read MoreOTC Derivative Volumes Rise: But Do We Know Why?
The Bank for International Settlements reported that OTC derivative volumes increased to a record $708 trillion, up 18% for the first half of 2011. I have some theories on why.
Read MoreWill CDS Survive the European Debt Crisis?
Governments and large issuers hate them, regulators wrestle with them and the general public do not have a clue of what they are, but Credit Default Swaps are the cleanest way to hedge credit risk. They also promote liquidity (ok, and sometimes volatility) into the bond markets as bond holders can buy CDS protection instead of selling bonds in the open market. But as Greece and other issuers start to test the waters with voluntary bond swaps, where large investors take a significant haircut on the principle value of the bonds in order to stem a default, CDS holders are crying foul.
Read MoreDodd-Frank Wider Bid Offers Already Here
Although final rules for Dodd-Frank have a ways to go and Basle III capital requirements are years away, the market is already reacting.
Read MoreWhat is the Swap Market Telling us about a U.S. Credit Rating Downgrade?
The swap market is very early predictor of a U.S. credit rating downgrade if this event does indeed result from the game of chicken the government is playing with the debt ceiling.
Read MoreReval Comments to CFTC on Margin Rules
Comments to the CFTC on Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants closed on Monday. Reval’s comment letter outlines potential impacts to end-users.
Read MoreCFTC and Dodd-Frank: Swaps Are Still Legal After July 16
Whatever the final date is for implementing Dodd-Frank, Reval CEO Jiro Okochi says market participants will likely need more than a year to properly comply.
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