October 28, 2010: SIFMA Forecasts US Tsy Issuance To Be $387.0 Bln In Q4

Conversation Starter

Neal Wolkoff is the CEO of ELX Futures, L.P. He was named to the position on Oct. 6, 2008. Previously, he had been CEO of the American Stock Exchange prior to its acquisition by NYSE. As issue as of late for ELX Futures is that an exchange for futures (EFF) block-trade mechanism offered by ELX Futures that allows traders to move their Treasury futures positions from one exchange to the other. CME Group has claimed ELX's EFF violates CME's rules. Both exchanges have petitioned the Commodity Futures Trading Commission (CFTC) to decide the issue. Wolkoff talked with MarketsWiki Senior Editor/ Producer Christine Nielsen.

Q: So I'm trying to get a handle on where things stand with these petitions to the CFTC regarding EFFs. Could you first give me your impressions on that?
A: The submission of information is over. Although the CFTC could ask for more information; but I can't speak for the agency. We’ve been pleased that the Commission has been responsive on the EFF issue and has publicly stated that EFFs do not violate any laws or regulations.

Q: Have you had a chance to read the interview we recently did with Foley & Lardner's Scott Early? What about this idea of a natural barrier disadvantage?
A: I would just preface this by saying that he (Scott Early) has been a well-respected regulated futures industry attorney for a number of years. By getting into economic theory and intellectual property, he steered away from his area of expertise. Plus, based on his statement that there is an intellectual property right in a product, the reality is that this does not exist. The reality is that there's nothing to patent or to copyright. We're not doing anything that a normal competitor wouldn't do. The CME is essentially a monopoly. There's nothing about ELX using this EFF mechanism that is illegal and this has never been an argument about intellectual property. The role of the exchanges includes promoting the best interest of the investing public. We're confident that we've been on the right side of this issue.

Q: What type of feedback have you gotten from market participants?
A: People are generally interested, and market participants are interested and have privately told us so, but there’s a conscious resistance to publicly come forward because of the CME’s dominance in the industry.

Q: What does ELX hope to achieve overall - in terms of market share of Treasury products?
A: We've been live now for a year. We've added customers, brought on a successful Eurodollar Futures contract. We want to grow to become a company with greater product reach, and increase our market share. We're doing very well and we're in a very good position. We are growing, adding users and I believe we have proven ourselves as a real competitor to the CME. It would be a good thing for market participants and the futures industry if we get the EFF mechanism approved.

Q: How would you see this playing out if the CFTC gives its nod on the use of the EFF mechanism?
A: A number of market participants would use it. What the EFF allows is for market participants to access the best available price across markets without paying a double margin or facing delivery obligations to deliver on one market and take delivery on another.

Q: What is next for the exchange?
A: [Without giving too much away] we have plans for enhancing liquidity; we plan to add new products, continue to diversify and increase our volume and open interest. Our Eurodollar Futures contract was launched four months ago and has been a big success so we hope to keep up the momentum.


Related items:

MarketsWiki: Five Minutes With Scott Early - Oct. 18, 2010
Scott Early: None of the public discourse on this [subject] addresses the real issue...The real issue, in economic terms, is a natural entry barrier issue. If somebody is starting a new exchange and they want to come in and try to compete with an existing product at an existing exchange, they are at, as economists would call, a natural entry barrier disadvantage. That being said, traders need liquidity in order to be confident in trading. Liquidity means not just the ability to put on a trade, but more importantly the ability to get it off at a reasonable price - at a time of crisis, so to speak, when blood is running in The Street.
http://jlne.ws/cUL7yA

ELX Press Statement to CFTC on Portfolio Managing Procedures (Dodd-Frank Act)
"ELX believes that any action by the CFTC to permit and foster portfolio margining between swaps and futures must promote competition among execution and clearing alternatives, and choice by market participants. ELX is against any discretionary action, such as the granting of a 4d order, that would allow the CME Group to assure its ongoing monopoly power in futures, and develop monopoly power over the clearing of swaps. CME controls over 96% of regulated futures trading and clearing. Given such dominance, the CFTC should ensure that portfolio margining systems not be used to prevent competition. In addition, any action by the Commission on this issue should be by rulemaking of general applicability and not by individual order or exemption. In order to protect against the CME from gaining further monopoly power as a result of a new statutory scheme - something not intended by the "open access" provisions of the Dodd Frank Act - ELX strongly recommends that the CFTC not adopt a portfolio margining regime unless it adequately protects the ability of other exchanges and DCOs to adopt different market mechanisms for position transfers. including EFF transactions."
http://jlne.ws/cLnh6e

CFTC Shouldn't Allow Margin Rules to Aid CME Group, ELX Says
By Matthew Leising, Bloomberg
The U.S. commodity regulator shouldn't allow proposed rules on margin offsets for futures and swaps trades to be used to cement CME Group Inc.'s monopoly in U.S. markets, according to competitor ELX Futures LP.
http://jlne.ws/9ZDdg4

ELX Futures Exceeds 100,000 Contracts Of Open Interest And Sets New Volume Record In Eurodollar Futures
Press Release
New York, Oct 28, 2010 – ELX Futures, L.P. (ELX) announced today that it has reached a new milestone in open interest (OI) and set a new volume record in its Eurodollar Futures contract, which was launched in June 2010. On Wednesday, October 27th, OI for Eurodollar Futures reached 104,313 contracts, with OI more than doubling every month since launch. Eurodollar Futures also set a new volume record, reaching 20,227 contracts on Tuesday, October 26th. Month over month, market share in Eurodollar contracts increased over 100% since September.
http://jlne.ws/chNf0n


Lead Stories

SIFMA Forecasts US Tsy Issuance To Be $387.0 Bln In Q4
Market News International
The Securities Industry and Financial Markets Association (SIFMA) today issued its quarterly government securities issuance and rates forecast for the fourth quarter of 2010.
Highlights of the forecast include:
- SIFMA forecasts total net Treasury bill, note and bond issuance to be $387.0 billion in the fourth quarter of 2010, slightly under the net $395.8 billion issued ($399.0 billion previously forecast in SIFMA's 3Q'10 issuance survey) in the third quarter (as a reminder, actuals include cash management balances). The median forecast for net new issuance of Treasury coupon securities (notes and bonds) is $364 billion in the fourth quarter, 6.6 percent below 3Q'10's net issuance of $389.9 billion but in-line with 4Q'09's $362.5 billion.
In addition, survey respondents expect Treasury to finish the year with $270 billion in cash (accounting for the $200 billion SFP limit), which is directly in-line with the $270 billion Treasury estimated in August for both end-September and end-December 2010 cash balances.
- Survey participants forecast total gross coupon issuance by the four largest Federal agencies to be $334.5 billion in the fourth quarter, compared to $250.7 billion in 3Q'10, a 33.4 percent increase.
- Survey respondents expect a net bill issuance of $23 billion in the fourth quarter, compared to a net issuance of $5.9 billion in 3Q'10 and a significant net redemption of $203 billion in 4Q'09.
- Survey respondents forecast Treasury will issue $19.5 billion of Treasury Inflation-Protected Securities (TIPS) in 4Q'10, 33 percent below the $29.3 billion issued in 3Q'10.
http://jlne.ws/aWo2mf

Federal Funds Futures: When a Bet Is Not a Bet
By Howard Simons
Has any carnival barker ever drawn a crowd with, “Step right up and refloat your fixed-rate overnight index swaps!”? Probably not; traders are supposed to be risk takers, cool and calculating, skirting along the edge of the road and asking passersby for the telephone number for 1-800-GAMBLER.
http://jlne.ws/cqtn39

Retail appetite helps Goldman sell $1.3bn in 50-year bonds
Goldman Sachs sold $1.3bn in 50-year bonds, benefiting from the voracious appetite of retail investors for higher-yielding securities at a time of historically low interest rates. Goldman, which originally said it would sell $250m in 50-year debt, sold the bonds on Tuesday in lots of $25 to attract individual investors.
http://jlne.ws/aly8mX

Tudor Says Yuan Gains Would Add More Jobs Than Fed Easing
By Saijel Kishan, Bloomberg
Paul Tudor Jones, founder of $11.5 billion hedge-fund firm Tudor Investment Corp., said a revaluation of China’s renminbi would do more to cut U.S. unemployment than asset purchases by the Federal Reserve.
http://jlne.ws/bIRTel

Bill Gross, PIMCO | Investment Outlook - Run Turkey, Run
They say a country gets the politicians it deserves or perhaps it deserves the politicians it gets. Whatever the order, America is next in line, and as we go to the polls in a few short days it’s incumbent upon a sleepy and befuddled electorate to at least ask ourselves, “What’s going on here?” Democrat or Republican, Elephant or Donkey, nothing much ever seems to change. Each party has shown it can add hundreds of billions of dollars to the national debt with little to show for it or move our military from one country to the next chasing phantoms instead of focusing on more serious problems back home. This isn’t a choice between chocolate and vanilla folks, it’s all rocky road: a few marshmallows to get you excited before the election, but with a lot of nuts to ruin the aftermath.
http://jlne.ws/bfYYKc

***CN: Gross talking up for the Turkey.

U.S. Seeks to Shield Goldman Secrets
By SCOTT PATTERSON, WSJ.com
Goldman Sachs Group Inc. has always closely guarded the secrets of its lucrative high-speed trading system. Now the securities firm is getting a help from an unusual source: federal prosecutors.
http://jlne.ws/8Z6K20

Financial Overhaul Should Help Long-Term Growth, Paulson Says
By Margaret Collins, Bloomberg
The financial overhaul law passed earlier this year should provide greater long-term growth for the economy, former U.S. Treasury Secretary Henry Paulson said.
http://jlne.ws/9kXXUR

Bernanke Asset Purchases Risk Unleashing 1970s Inflation Genie
By Craig Torres, Bloomberg
For the second time since he became chairman in 2006, Ben S. Bernanke is leading the Federal Reserve into uncharted monetary territory.
http://jlne.ws/caYAmJ

`Black Swan' Author Taleb Says Financial Bonus Pay Should Be `Symmetric'
By Laura Marcinek, Bloomberg
Nassim Nicholas Taleb, author of the "The Black Swan," said bonuses to financial executives and traders should be "symmetric" with their performance to solve the problem of overconfidence in global markets.
http://jlne.ws/bsLqhY

Robert Shiller And Foreclosuregate: Playing With Systemic Fire? - Street Sweep: Fortune's Wall Street Blog
CNNMoney.com/Fortune
Robert Shiller, the Yale professor who was a leading skeptic of the financial bubbles of the past decade, and New York City Comptroller John Liu, spoke Tuesday at The Economist magazine's annual Buttonwood conference, where they discussed how to manage systemic risk under the new world of regulatory reform.
http://jlne.ws/9O4Beo

Shrinking Bank Revenue Signals Worst Decade of Growth
By Dawn Kopecki and Michael J. Moore, Bloomberg
Shrinking revenue at U.S. banks, led by Goldman Sachs Group Inc. and Citigroup Inc., may continue to fall as the industry heads into what could be its slowest period of growth since the Great Depression.
http://jlne.ws/90OoAv

Basel Could Make Credit Crunches Worse, Pandit Says
BusinessWeek
Citigroup Inc. Chief Executive Officer Vikram Pandit said many of the goals set by the Basel Committee on Banking Supervision are likely to be ineffective or make existing capital inequalities worse.
http://jlne.ws/cRWYAG

Vince Cable orders bankers back down to Earth on bonuses
Guardian Unlimited
Barclays' Bob Diamond mounts defence of the City as business secretary launches government review Vince Cable today warned bankers against embarking on a "self-indulgent bonus round" as he put soaring executive pay and potentially destructive takeovers at the heart of a new government review into the way the City operates. The business secretary's plea at the CBI conference followed an attempt ...
http://jlne.ws/bYS3rr

US Treasury: Oversight Council Taking Next Steps On Nonbank Rules
Dow Jones
The new Financial Stability Oversight Council at its second meeting next month will further discuss the criteria for identifing when a financial firm outside the banking system becomes large or complex enough to threaten markets, Deputy Treasury Secretary Neal Wolin said Monday.
http://jlne.ws/dk4kF8

Greenspan's Niece Fires Back at Hedge Fund
New York Times
It seems one hedge fund employee recently let go from Kingdon Capital wasn't going gently into that dark night.
http://jlne.ws/cFEo37

Treasury Draws Negative Yield for First Time
By Cordell Eddings and Daniel Kruger, Bloomberg
The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in sparking inflation.
http://jlne.ws/bEivFI

Wall Street Sold `Tragically Deficient' Product, Angelides Says
By Phil Mattingly, Bloomberg
Wall Street firms such as Goldman Sachs Group Inc. and Citigroup Inc. created products that were "tragically deficient," in the view of the chairman of the panel charged by Congress with identifying the causes of the financial crisis.
http://jlne.ws/d9uzfk

G20 reaches agreement on global banking
The Age
G20 finance ministers have reached agreement on tougher rules for banks and big finance firms blamed for triggering the global economic crisis.
http://jlne.ws/devcz9

President's Working Group On Financial Markets Releases Money Market Funds Report
Press Release
The President's Working Group on Financial Markets (PWG) today released a report detailing a number of options for reforms related to money market funds. These options address the vulnerabilities of money market funds that contributed to the financial crisis in 2008.
http://jlne.ws/cxgbC7

U.S. Treasury Shielding of Citigroup With Deletions Make FOIA Meaningless
Bloomberg
The late Bloomberg News reporter Mark Pittman asked the U.S. Treasury in January 2009 to identify $301 billion of securities owned by Citigroup Inc. that the government had agreed to guarantee . He made the request on the grounds that taxpayers ought to know how their money was being used.
http://jlne.ws/cMOgKB

How Howard Lutnick Is Growing Cantor and BGC
BusinessWeek
The Cantor Fitzgerald chief is on a hiring binge, opening new offices abroad, and moving the firm in new directions
http://jlne.ws/bvu7wI


Events

Greece is Changing
Hellenic Observatory 11th Annual Lecture in association with APCO worldwide
When: Nov. 8, 2010
Where: LSE Campus
Full info: http://www2.lse.ac.uk/publicEvents/events/2010/20101108t1830vLSE.aspx
Details: The Greek sovereign debt crisis of 2010 has received world-wide attention and has elicited unprecedented action by the European Union and its member governments as well as by the IMF. Greece is now obliged to follow the terms of the 'Memorandum' agreed with the 'bail-out' loan it has received. Is Greek economic policy on track? What are its future prospects?

Deutsche Bank Annual Financial Technology Senior Executive Forum
When: Nov. 9-10, 2010
Where: The Pierre in New York
Full info: http://conferences.db.com/americas/fintech10/
Details: Participants will include prominent figures from exchange, FCM / Inter-dealer broker, trading technology, merchant acquiring, payment processing, prepaid, information provider, and financial software companies. Through a series of interactive panels, these senior business leaders will explore the challenges and opportunities as they expand into new markets, face increasing global competition, and respond to an ever-changing regulatory environment. For context, this is not a research analyst conference but rather, a forum that organized to engage senior executives in industry-related discussions. This forum is also an excellent networking opportunity as the individuals who attend are decision-makers within their organizations. Similar to last year, this year's forum will feature panel discussions comprised of senior executives and board members from a variety of industry sub-sectors.

***CN: Deutsche Bank reserves the right to determine which attendees have priority for admission.

The Devil in the Details: Implications of Recent Regulatory Reforms and Other Updates for the Financial Services Industry
When: Nov. 10, 2010
Full info: http://events.mcgladrey.com/forms/RedefiningtheSwapsMarketWebinar111010
Details: You are invited to a lively discussion of recent regulation from three different perspectives – legal, regulatory and accounting. Join leading professionals in the financial services, law, accounting and tax sectors as they identify certain implications of these regulations. In addition, a tax specialist will provide an update on the taxation of carried interest and other important tax issues. Speakers include John W. McPartland, senior financial markets advisor, Financial Markets Group, Federal Reserve Bank of Chicago and John Hague, partner and national director of financial services, McGladrey & Pullen, LLP. The webinar will cover topics such aslegal and regulatory update and impact of Dodd-Frank.


Economic News

UK retail sales growth slowed in October, says CBI
BBC
Retail sales slowed in October from the month before, according to the latest CBI distributive trades survey.
http://jlne.ws/bS75qL

Consumer confidence ticks up in October
By Annalyn Censky, CNN Money.com
Americans got slightly more optimistic about the economy in October, but still have an overwhelmingly gloomy outlook, according to the latest reading on consumer morale.
http://jlne.ws/dli9cN

U.S. home prices fall 0.2% in August: Case-Shiller Economic Report
By Greg Robb, MarketWatch
Home prices fell 0.2% in August, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s, in a report labelled “disappointing” by its compilers.
http://jlne.ws/9sloUm


Exchanges, Clearing Houses & MTFs

MF Global Sees Barrier To CME's Interest-Rate Swap Clearing
By Jacob Bunge Of DOW JONES NEWSWIRES
Brokerage firm MF Global Holdings (MF) charged Monday that exchange company CME Group Inc. (CME) has set too high a threshold for participating in a new service for interest-rate swaps. MF Global, among the biggest independent futures commission merchants, said that tough capital requirements for firms looking to clear interest-rate swap deals at CME ensure that the $349 trillion market will continue to be dominated by big banks.
http://jlne.ws/bkpluW

CME to Begin Trading 'On-the-Run' Treasury Futures Contracts
By Liz Capo McCormick, Bloomberg
CME Group Inc., the world's largest futures market, will begin trading on-the-run Treasury futures contracts next week that will provide investors exposure to benchmark 2-, 5- and 10-year notes.
http://jlne.ws/bJ2l7O

***CN: Learn more about CME Group OTR Treasury Futures contracts here on the exchange's Web site.

Morgan Stanley Clears OTC Derivative Trades at CME
Press Release
Morgan Stanley, a market leader in derivatives trading and clearing, announced today that it has cleared OTC interest rate swap transactions for clients of the firm at the Chicago Mercantile Exchange (CME). Trades were cleared on the first day of operation of the CME Clearing service for interest rate swaps. This follows the previously announced clearing of client OTC Credit Default Swap (CDS) transactions at CME's CDS clearing service.
http://jlne.ws/dcbwGQ


Firms & Banks

Wells Fargo Will File More Foreclosure Affidavits After Lapses
By Donal Griffin and Dakin Campbell, Bloomberg
Wells Fargo & Co., the biggest U.S. home lender, said it will file supplemental foreclosure affidavits to courts in about 55,000 proceedings after finding some statements “did not strictly adhere to the required procedures.”
http://jlne.ws/9MbSS4

Goldman Launches 50-Year Bond Sale
By KATY BURNE, WSJ.com
Goldman Sachs Group Inc. launched a $1.3 billion sale of 50-year bonds Tuesday, its longest senior bond ever. The sale was targeted at private, also known as retail, investors rather than institutions.
http://jlne.ws/bNBaHN

Banks spend $82 million to sell credit cards to students
By Amy Haimerl, CNN Money
The U.S. Marines recruit college students to become one of the few, one of the proud. Bank of America just wants their financial future. The Charlotte, N.C.-based bank spends exponentially more money than any other bank to recruit students for credit cards.
http://jlne.ws/c4ktkF

UBS reports $1.7 bln net; outflows are halted
Market Watch
UBS reports a $1.7 billion profit and halts the outflow of cash from its private- banking arm, though the group's shares drop as its investment-banking unit disappoints investors.
http://jlne.ws/asdYcO

Deutsche Bank's Biggest Deal in Decade May Hurt Profit
BusinessWeek
Deutsche Bank AG's plan to build a German consumer-banking powerhouse with the $8.9 billion purchase of Deutsche Postbank AG, its biggest takeover in a decade, may end up weighing on profitability.
http://jlne.ws/a2aM0O

BankServ's Corporate SWIFT Service Bureau to Be Offered by Bank of America Merrill Lynch
Marketwire
BankServ and Bank of America Merrill Lynch today announced an agreement to create a Global SWIFT Service Bureau solution for the bank's many Fortune 1000 clients worldwide.
http://jlne.ws/bDqUSK

Jefferies Names James Golden Head of Treasury Desk
BusinessWeek
Jefferies & Co., one of the 18 primary dealers that trade U.S. government debt with the Federal Reserve, hired former Royal Bank of Scotland Plc trader James Golden as head of its Treasury trading desk.
http://jlne.ws/dlIpWn

UBS Appoints Miskovic as Chief Risk Officer, Lofts as CEO of the Americas
Bloomberg
UBS AG, Switzerland's largest bank, hired Maureen Miskovic as chief risk officer, the first woman to join its 13-member group executive board.
http://jlne.ws/9eo8K


Auctions & Statistics

Treasury 5-Year Notes Go At 1.330% High Yield
By Gary Siegel, The Bond Buyer
The Treasury Department auctioned $35 billion of five-year notes, with a 1 1/4% coupon, a 1.330% high yield, a price of 99.614432.
http://jlne.ws/aUGqdj

Fannie Mae to sell new 3-yr and 5-yr notes in reopen
Reuters
Fannie Mae (FNMA.OB), the largest U.S. home funding company is planning to sell on Thursday new three-year benchmark notes and $1.0 billion of five-year benchmark notes in a reopening of an existing 1.625 percent issue, said a market source familiar with the transaction on Wednesday.
http://jlne.ws/9cog3l

TIPS auction reflects profound uncertainty
By Mark Hulbert, MarketWatch
How much should you have to pay for an insurance policy that protects you against both severe deflation and hyperinflation?
http://jlne.ws/d9RUw5


Regulators

SIFMA Says It's Not Looking to Roll Back Dodd-Frank Law
Finance Technology Network
A major financial services trade group said Tuesday it is not seeking to roll back key portions of the new U.S. financial reform law regardless of the outcome of the November elections.
http://jlne.ws/aHRfTY

IMF Managing Director Dominique Strauss-Kahn Names Antonio Borges as Director of the European Department of the Fund
Press Release
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), announced today his intention to name Mr. Antonio Borges to the post of Director of the European Department of the Fund.
http://jlne.ws/96hVFy

Fed Won't Join Banks' Appeal to High Court Over Emergency-Loan Disclosures
Bloomberg
The Federal Reserve won't join a banking industry trade group in asking the U.S. Supreme Court to let the government continue to withhold details of emergency loans made to financial firms in 2008.
http://jlne.ws/9ATM1X

Geithner's Global Central Planning
By JOHN H. COCHRANE, WSJ.com
Economists are full of bad ideas. Terrible ideas seem to emerge when the gurus get together to talk about coordinating their bad ideas. Last week's public letter from Treasury Secretary Tim Geithner to the G-20 finance ministers is a great example.
http://jlne.ws/a0k6jF

ECB revises estimated T2S fees
By Jeremy Grant, FT.com
The European Central Bank has come up with a more precise estimate for how much the planned pan-European settlement system - known as Target2Securities (T2S) - will cost, setting a fee of 15 euro cents per transaction.
http://jlne.ws/dnYnHQ

CFTC aims for middle ground in segregating funds
By Roberta Rampton and Christopher Doering, Reuters
The U.S. futures regulator is aiming to find middle ground between money managers who want their swaps' collateral protected in times of financial crisis, and the clearinghouses and their members who worry new rules will ratchet up costs.
http://jlne.ws/9BbmIX

Fed boss: Regulators looking into foreclosure mess
By JEANNINE AVERSA, AP
Federal banking regulators are examining whether mortgage companies cut corners on their own procedures when they moved to foreclose on people's homes, Federal Reserve Chairman Ben Bernanke said Monday.
http://jlne.ws/cYhES1

Fed's Fisher: Policy Makers Must Be Aware of Dollar Impact
Bloomberg
Federal Reserve officials need to be mindful of the effect their actions are having on the dollar, said Richard Fisher, president of the Fed bank of Dallas and a former deputy U.S. trade representative.
http://jlne.ws/aNG7IT

New York Fed Faces 'Conflict' in Mortgage Buybacks
BusinessWeek
The Federal Reserve Bank of New York's effort to recover taxpayer money used in bailouts during the crisis may be at odds with its mission to ensure the stability of the financial system.
http://jlne.ws/9r22oF

Plosser Says Fed in 'Difficult Spot' on Mortgage-Debt Buybacks
BusinessWeek
The Federal Reserve's effort to recover taxpayer money used in bailouts while also ensuring the stability of the financial system puts it in a "difficult spot," said Charles Plosser, president of the Philadelphia Fed.
http://jlne.ws/c0DQJt


OTC

OTC Derivatives May Face Curbs as FSB Seeks Central Clearing
By Jim Brunsden and Abigail Moses, Bloomberg
Regulators should consider limiting trades in some derivatives that aren't centrally cleared in a bid to cut excessive risk, the Financial Stability Board said.
http://jlne.ws/dl9E7x

Curbing Swaps Correlation Risk Vital, Regulators Told
By Matthew Leising and Shannon D. Harrington, Bloomberg
Regulators need to consider the collective risk of the credit-default swap market when deciding margin requirements for cleared trades, University of Houston finance professor Craig Pirrong said today in Washington.
http://jlne.ws/anJqga

OTC derivatives trade grows in 2010 despite crackdown - ISDA
By Daisy Ku, Reuters
The outstanding amount of over-the-counter derivatives rose during the first half of 2010 despite calls by regulators to move much of the market on to exchanges, the International Swaps and Derivatives Association said on Monday.
http://jlne.ws/aVPeD3

Foreign Banks Selling Swaps in U.S. to Face Dodd-Frank Rules, Gensler Says
Bloomberg
International banks selling derivatives in the U.S. will face higher capital requirements and new business conduct standards under the most sweeping rewrite of Wall Street rules since the Great Depression, according to a top regulator.
http://jlne.ws/d5bgzn

CFTC May Finish Proposed Swaps Rules by Mid-December
By SARAH N. LYNCH, WSJ.com
The Commodity Futures Trading Commission hopes to finish proposing all of its new over-the-counter derivatives regulations by mid-December, but to implement them it may need 400 additional staffers, CFTC Chairman Gary Gensler said Thursday.
http://jlne.ws/aJfgoi


Global News

International Borrowers Take to Islamic Bond Market
The New York Times
Until recently the issuance of Islamic bonds, or sukuk, was confined to the Muslim world. But now a number of international borrowers are tapping the markets, including Nomura Holdings in Japan and Europe's first corporate borrower, International Innovative Technologies.
http://jlne.ws/cw1m0E

Bean explains why Bank forecasts failed
By Daniel Pimlott, FT.com
The Bank of England could not have foreseen the depth of the recession, according to its deputy governor, because downturns following banking meltdowns are so unpredictable. Economists should treat such events the way seismologists approach earthquakes, said Charlie Bean, by remaining alert to a build-up of stresses and vulnerabilities.
http://jlne.ws/9ptB6T

Argentina credit default swaps spreads narrow
Reuters
Argentina's credit default swap spreads narrowed on Wednesday following news of the death of former Argentine president Nestor Kirchner, husband of current president Cristina Fernandez.
http://jlne.ws/aGVH9b

Greece Likely to Default By 2013 as Debts Remain, El-Erian Says
By Susanne Walker, Bloomberg
Greece is likely to default over the next three years because budget-cutting won’t be enough to reduce the nation’s debt burden, Pacific Investment Management Co. Chief Executive Officer Mohamed A. El-Erian said.
http://jlne.ws/9ah6WF

Iceland Wants Failed Banker Criminal Probes Sped Up
BusinessWeek
Iceland's parliamentary committee in charge of probing the country's financial collapse wants to speed up investigations of former bank executives and ensure criminal acts are prosecuted soon.
http://jlne.ws/bgCw9z

Qatar Bourse Expects to Start Bond Trading, Short-Selling in First Quarter
Bloomberg
Qatar Exchange expects to start trading in bonds in the first quarter of next year, Saif Al- Mansoori, deputy chief executive officer, said in Beirut today.
http://jlne.ws/bQQnh9

Barclays named 'Best Bank in Botswana'
Mmegi Online
For the second year running, Barclays Bank of Botswana (BBB) has been named 'Best Bank in Botswana' by emeafinance Magazine.
http://jlne.ws/bTNu0n

Abu Dhabi Islamic Bank Hires HSBC, Barclays, StanChart to Sell Dollar Bond
Bloomberg
Abu Dhabi Islamic Bank PJSC's sale of five-year Islamic bonds in dollars may be priced to yield about 3.625 percent, according to two people with knowledge of the sale.
http://jlne.ws/aJ1Nmb

South Korea's Economic Growth Likely Slowed as Won Surge Endangers Exports
By William Sim and Sarina Yoo, Bloomberg
South Korea’s economic expansion probably slowed last quarter as the nation’s currency surged the most in Asia and global growth cooled, imperiling exports and increasing scope to extend a pause in interest-rate increases.
http://jlne.ws/9bnmYe

Singapore Exchange eyes up a move for ASX
Sydney Morning Herald
The nation's monopoly sharemarket operator, the ASE, is back in talks with its offshore peers.
http://jlne.ws/9s7zkO

Brussels looks to cut settlement times
By Jeremy Grant in London and Nikki Tait in Brussels, FT.com
European regulators are considering ways to cut the time it takes for securities to be processed after trades are done in a bid to reduce risks to the system in the event of defaults and other large financial failures.
http://jlne.ws/c5Q5zj

Spain's Banco Santander wins EU approval to buy RBS assets
People's Daily
Banco Santander of Spain has won approval from the European Union (EU) to buy a number of retail and commercial banking assets of the Royal Bank of Scotland Group (RBS) in Britain.
http://jlne.ws/9pZAE9

Bank levy raises worries over 'double taxation'
Daily Telegraph
Banks face being taxed twice on their balance sheets in the first year of the Government's new L2.5bn levy with Britain unlikely to reach an agreement with other countries on the issue of double taxation before the measure is introduced next year.
http://jlne.ws/d7J0xK