Chicago PMI Jumps to 20-Yr High, Consumer Spending Rises
By Maulik Mody, Bond Squawk
Consumer spending increased more than forecast in December, making the last quarter the best one of 2010. Spending increased 0.7% in the last month, following a 0.3% gain in November. Personal income grew for a third month in a row, continuing to grow at 0.4%. Although income and spending continues to grow, the pace is moderate making the recovery very slow. The Fed’s preferred gauge of inflation, the Personal Consumption Expenditure Core Price Index, was flat in December after advancing 0.1% in November.
http://jlne.ws/fKyM7A
Goldman profits from AIG bailout
Dan Collins, Futures Mag.com
Yesterday Bloomberg reported that Goldman Sachs profited $2.9 billion for its own account thanks to the taxpayer bailout of American International Group Inc (AIG) according to a congressionally appointed panel.
http://jlne.ws/fpDjfy
Munis Becoming Attractive to Taxable-Bond Managers
By Christine Benz, Morningstar
Morningstar's Miriam Sjoblom says even though things are looking bad for some issuers, several topnotch taxable-bond managers are starting to see opportunity in the sector.
http://jlne.ws/hbDs9B
Estimating the Macroeconomic Effects of the Fed's Asset Purchases
By Hess Chung, Jean-Philippe Laforte, David Reifschneider, and John C. Williams, FRBSF Economic Letter
An analysis shows that the Federal Reserve's large-scale asset purchases have been effective at reducing the economic costs of the zero lower bound on interest rates. Model simulations indicate that, by 2012, the past and projected expansion of the Fed's securities holdings since late 2008 will lower the unemployment rate by 1½ percentage points relative to what it would have been absent the purchases. The asset purchases also have probably prevented the U.S. economy from falling into deflation.
http://jlne.ws/gFDMTs
U.S., British Exchanges Attacked by Hackers, According to Report
Tom Steinert-Threlkeld, Securities Technology Monitor
The London Stock Exchange has been working with British security services to investigate cyber attacks against it, that may have led to the postponement of a transfer to a new trading technology platform until February 14, according to a report in the Times of London.
http://jlne.ws/hHg6Hp
Dallas Fed's trimmed mean PCE inflation rate 1.2 percent for December
Press Release
The trimmed mean PCE inflation rate for December was an annualized 1.2 percent. According to the BEA, the overall PCE inflation rate for December was 3.8 percent, annualized, while the inflation rate for PCE excluding food and energy was 0.4 percent.
http://jlne.ws/fdBaqC
Egypt may be 2011's black swan
Terry Keenan, New York Post
This weekend Wall Street is keeping an eye on the Arab Street, and with good reason, as rousing protests in Cairo and across Egypt are raising concerns of a 1970s-style oil price shock in the coming months.
http://jlne.ws/feNWvQ
What might happen in China this year?
By Gordon Orr, McKinsey Quarterly
Inflation in food prices will take longer than expected to control. The drivers of inflation are much more structural than cyclical. Indeed, the entire system is now so highly stressed that one snowstorm brings large spikes in food and energy prices as coal runs short.
http://jlne.ws/hcCV1w
New York Fed purchases $7.720 bln in Tsy coupons: New York Fed purchases $7.720 bln in Tsy coupons
Press Release
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system
http://jlne.ws/hmCgjZ
Fed's Lockhart sees only gradual inflation rise
By Greg Robb, MarketWatch
Inflation should rise only gradually over the next two years to "healthier" levels from current "very low levels," said Dennis Lockhart, the president of the Atlanta Federal Reserve Bank on Monday. A few months ago, fear of deflation was justified but recently this concern has abated as the rate of inflation has stabilized, Lockhart said in remarks at Miami Dade College.
http://jlne.ws/gfxCNd
Former Fed Officials Expect Dollar to Stay Dominant
By Luca Di Leo, WSJ.com
The U.S. dollar will still be the world’s dominant currency for at least the next decade, said three former top officials at the Federal Reserve, including former Fed Vice Chairman Donald Kohn.
http://jlne.ws/hPu4rK
ELX Announces 9-Cent One-Tier Fee Schedule for U.S. Tsys and Eurodollar Futures
Press Release
ELX Futures, L.P. (ELX), a leading electronic futures exchange, announced today a new 9 cent one-tier bundled fee schedule for market users trading all U.S. Treasury and Eurodollar futures contracts on ELX, effective February 1, 2011.
http://jlne.ws/gJZTFa
ELX Futures Aggressively Drops Trading Fees For Rate Futures
By Jacob Bunge Of DOW JONES NEWSWIRES
ELX Futures LP said Monday that it will this week cut trading fees on its derivatives exchange to a flat 9 cents per contract ahead of the expected launch of a new rival.
The user-owned U.S. exchange operator told traders that it would lower fees on futures contracts on Treasury yields and inter-bank lending rates to 9 cents per contract beginning Tuesday, as the still-small challenger works to draw business.
http://jlne.ws/gHKfcH
ICE Futures Europe Sets Daily Volume and WTI Crude Futures Records
London (31 January 2011) IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets, announced that ICE Futures Europe set an exchange-wide daily volume record of 1,492,384 contracts on 28 January. The new record surpassed by 4.4% the previous daily record of 1,429,283 contracts, which was established on 12 January 2011.
http://jlne.ws/eStwrD
Wells Fargo Joins CME Group for Interest-Rate Swap Clearing
By Matthew Leising, Bloomberg
Wells Fargo & Co.’s securities unit has joined the CME Group Inc. for guaranteeing interest-rate swaps, the firm said today in a statement. Banks will be required to back most of their interest-rate swaps with a clearinghouse beginning this year under the U.S. Dodd-Frank Act.
http://jlne.ws/gxQzDx
Brooksley Born of the FCIC: "We may well still be in a financial crisis"
By: David Dayen
In a sometimes contentious call, Financial Crisis Inquiry Commission representatives Phil Angelides and Brooksley Born acknowledged that we might still be in a financial crisis, and that their report should not be seen as the last word on an event that still has the capacity to significantly damage the global economy.
FDL News Desk
http://jlne.ws/hRlorF
Harmonised accounting rules to hit US banks
By Helen Thomas, Financial Times
US banks could see their balance sheets balloon under new proposals from the accountancy rulemakers that would dramatically reduce their ability to net their derivatives exposure.
http://jlne.ws/dMhP18
IMF contests complacency over euro
By Chris Giles in Davos, Financial Times
John Lipsky, the leading US official at the International Monetary Fund, challenged the air of complacency over the eurozone at the World Economic Forum, telling the Financial Times that the loans to Greece and Ireland had "no guarantee of success" and that restructuring of debt would not be without cost.
http://jlne.ws/hOR6XX
Europe's banks hint at return to health
By David Oakley in London and Ralph Atkins in Frankfurt - Financial Times
Europe's banking system is returning to health amid signs that financial institutions are no longer hoarding cash, according to key indicators.
http://jlne.ws/fIMK3i
Citigroup restructuring investment banking operations
PTI via Yahoo! India News
New York, Jan 30 (PTI) Citigroup Inc is restructuring its operations with a view to channelise investment in the energy, power and chemical sectors, according to a media report.Citing a memo the bank sent to employees on Friday, The Wall Street Journal reported that Citi is splitting its energy and power businesses into two separate portfolios, while chemicals will now fall under its global ...
http://jlne.ws/dLkVmC
UBS: To Pay CHF16 Million For One-Time Payment To Pensioners
Dow Jones
UBS AG (UBS) said Monday it will charge roughly 16 million Swiss francs ($17 million) against first-quarter earnings in order to pay CHF1,000 each to retired employees in Switzerland.
http://jlne.ws/i8C34h
UK may start selling $73 bln RBS stake in early 2012
Reuters UK Focus via Yahoo! UK & Ireland Finance
Britain could start selling its 46 billion pound ($73 billion) stake in Royal Bankof Scotland early next year, the Financial Times said on Monday citing bosses at the bailed-out ...
http://jlne.ws/fb49vu
Senin, 31 Januari 2011
ISDA Comments on Proposals Issued by the IASB and FASB
ISDA - INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.
NEWS RELEASE
For Immediate Release, Monday, January 31, 2011
ISDA Comments on Proposals Issued by the IASB and FASB
LONDON, Monday, January 31, 2011 – The International Swaps and Derivatives Association, Inc. (ISDA) welcomes the efforts of the International Accounting Standards Board and the Financial Accounting Standards Board to seek convergence on their current US GAAP and IFRS models regarding offsetting of assets and liabilities in the balance sheet.
ISDA believes that reporting derivatives positions on a net basis where netting is enforceable gives the best information for users of financial statements. Net presentation is consistent both with the way derivatives are managed by the entity and with the regulatory treatment of them. It therefore provides the most relevant and risk sensitive information.
ISDA believes the Boards' proposal to report derivatives on a gross basis rather than a net basis on the balance sheet is counterintuitive, may lead to complexity in practice and can obscure the real position of the entity. It is likely to be misleading when presenting the leverage, credit risk and liquidity risk position of an institution. Misperceptions regarding the risk exposure of derivatives users may impede the ability of corporations, government entities and financial institutions to effectively manage the business and financial risks to which they are exposed.
About ISDA
ISDA, which represents participants in the privately negotiated derivatives industry, is among the world’s largest global financial trade associations as measured by number of member firms. ISDA was chartered in 1985, and today has over 800 member institutions from 54 countries on six continents. These members include most of the world’s major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.
NEWS RELEASE
For Immediate Release, Monday, January 31, 2011
ISDA Comments on Proposals Issued by the IASB and FASB
LONDON, Monday, January 31, 2011 – The International Swaps and Derivatives Association, Inc. (ISDA) welcomes the efforts of the International Accounting Standards Board and the Financial Accounting Standards Board to seek convergence on their current US GAAP and IFRS models regarding offsetting of assets and liabilities in the balance sheet.
ISDA believes that reporting derivatives positions on a net basis where netting is enforceable gives the best information for users of financial statements. Net presentation is consistent both with the way derivatives are managed by the entity and with the regulatory treatment of them. It therefore provides the most relevant and risk sensitive information.
ISDA believes the Boards' proposal to report derivatives on a gross basis rather than a net basis on the balance sheet is counterintuitive, may lead to complexity in practice and can obscure the real position of the entity. It is likely to be misleading when presenting the leverage, credit risk and liquidity risk position of an institution. Misperceptions regarding the risk exposure of derivatives users may impede the ability of corporations, government entities and financial institutions to effectively manage the business and financial risks to which they are exposed.
About ISDA
ISDA, which represents participants in the privately negotiated derivatives industry, is among the world’s largest global financial trade associations as measured by number of member firms. ISDA was chartered in 1985, and today has over 800 member institutions from 54 countries on six continents. These members include most of the world’s major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.
Jumat, 28 Januari 2011
Top Interest Rate Headlines 01-28-11: Economists React: ‘The U.S. Economy Is Back’
Economists React: ‘The U.S. Economy Is Back’
By Phil Izzo, WSJ.com
Risks are now moving from the downside to the upside. If the forecast is off it will most likely be because hiring kicks in faster than expected. Firms have the cash to hire; they just need the confidence to do so, and that could develop quickly. The major downside risk remains a global sovereign debt crisis that would roil financial markets, cause businesses and consumers to cut back, and reduce exports.
http://jlne.ws/h4ZjvE
The 2011 World Economic Forum in Davos, Switzerland
Dignitaries, economists, and business leaders from around the world gather in Davos, Switzerland, for the annual World Economic Conference. They will discuss free markets and the global economic recovery during the five-day conference.
http://jlne.ws/ikmYU8
Ardian Fullani, Governor of Bank of Albania, analysis of domestic economic developments, banking sector
BIS
Ladies and Gentlemen,
The Bank of Albania considers its communication with the public a key element to an effective communication of its decision-making. To serve this purpose, it makes use of all forms and types of communication. However, direct contact with the people provides us with a real perception and interpretation of their position and expectations and supports a more effective decision-making process. Therefore, I am pleased to be again in your city, the centre of a region of well-known intellectual, cultural and patriotic...
http://bis.org/review/r110128e.pdf
Chapdelaine Credit Partners Said to Close as Primus Deal Fails
By Lisa Abramowicz, Bloomberg
Chapdelaine Credit Partners, the bond broker started two years ago when debt markets seized up, will close next week after failing to raise capital, according to people with direct knowledge of the matter.The firm held a meeting in New York today to inform employees that the unit of Chapdelaine & Co., a municipal bond broker founded in 1966, will close as soon as Jan. 31, said the people, who declined to be identified because they aren’t authorized to discuss the changes publicly.
Few Signs of United Approach to Financial Regulation
By JACK EWING - NY Times
DAVOS, Switzerland - This heavily guarded ski village is probably the only place on the planet where you can get the world's top central bankers, regulators, economists and business leaders to sit down together in the same room.
http://jlne.ws/gX4Er4
Merkel Defies Deutsche Bank as Ackermann Frets Over Sinking Bonds in Davos
Bloomberg
The leader of Europe's biggest economy and the head of Germany's largest bank, partners in a financial rescue two years ago, are rattling investors with their feud about how to manage the sovereign-debt crisis.
http://jlne.ws/i5ta9S
Experts predict eurozone debt reforms
By Chris Giles in Davos - Financial Times
The financial markets may have offered a recent respite to highly indebted eurozone members but they will still be forced into early sovereign restructuring, said leading economists at the World Economic Forum in Davos.
http://jlne.ws/e8BMAK
Citigroup Chief Pandit Sees `Robust' Capital Markets, Support for the Euro
Bloomberg
Client flows are strong and stable for Citigroup, and credit quality is a "lot better than a year ago," Pandit said today during an interview in Davos, Switzerland, on Bloomberg Television's "Inside Track."
http://jlne.ws/i5yZAt
BofA, Barclays, Credit Suisse, JPMorgan Confer in Davos About Rules, Risk
Bloomberg
Robert Diamond, chief executive officer of Barclays Plc, talks about winning back the public's trust and market share in the bank's merger and acquisition advisory business.
http://jlne.ws/fRYMhj
Sarkozy tells G20 'dare to dream'
By Chris Giles in Davos
The legitimacy of the Group of 20 leading economies rests on "its abilities to take decisions", Nicolas Sarkozy, the French president, told the World Economic Forum on Thursday.
http://jlne.ws/dO5T7S
Harsh Words for Regulators in Crisis Commission Report
By BEN PROTESS and SUSANNE CRAIG - NY Times
The Congressional commission's scathing account of the financial crisis casts regulators in a rather unflattering light, as the sheriff who didn't stop Wall Street from becoming the Wild West.
http://jlne.ws/gnxzV2
New York Fed Weighed Ousting Fuld, Helping Pick His Successor
By Craig Torres and Caroline Salas
Federal Reserve officials considered the need to fire Lehman Brothers Holdings Inc. Chairman Richard Fuld just before the firm collapsed in 2008, an e-mail released by the Financial Crisis Inquiry Commission showed. "Does Fuld have to be replaced on Sunday?" the e-mail memo, dated Sept. 10, 2008, asks. "If so, do we exercise influence over the choice of his successor?"
http://jlne.ws/gu0hIG
Goldman Got $2.9 Billion for Own Bets in AIG Bailout, FCIC Says
BusinessWeek
Goldman Sachs Group Inc. received $2.9 billion for its own account as a taxpayer bailout enabled American International Group Inc. to make good on credit-default swaps linked to mortgages, a congressionally appointed panel said.
http://jlne.ws/foqgfI
La Caixa banking unit to be listed group
By Victor Mallet, Financial Times
La Caixa, the unlisted Barcelona-based savings bank that has the biggest domestic retail network in Spain, will move its banking operations into a listed company as part of a plan to strengthen its capital base and continue growing.
http://jlne.ws/go3tEL
Morgan Stanley Names 232 Managing Directors, the Largest Number Since 2007
Bloomberg
Morgan Stanley , owner of the world's largest brokerage, appointed 232 new managing directors, the most to achieve the company's highest rank since 2007.
http://jlne.ws/ed683Y
RBS fights for universal cause
eFinancial News
Financial institutions with investment banking and retail banking divisions are less risky than narrow banks. Or at least that is what this chart argues. Author of the chart? Well, the Royal Bank of Scotland, a universal bank.
http://jlne.ws/f9kJgX
Schwab Declares Regular Quarterly Dividend
Business Wire
SAN FRANCISCO--(BUSINESS WIRE)--The Board of Directors of The Charles Schwab Corporation has declared a regular quarterly cash dividend of $0.06 per common share. The dividend is payable February 25, 2011 to stockholders of record February 11, 2011. About Charles Schwab The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 8.0 ...
http://jlne.ws/gwbbwJ
By Phil Izzo, WSJ.com
Risks are now moving from the downside to the upside. If the forecast is off it will most likely be because hiring kicks in faster than expected. Firms have the cash to hire; they just need the confidence to do so, and that could develop quickly. The major downside risk remains a global sovereign debt crisis that would roil financial markets, cause businesses and consumers to cut back, and reduce exports.
http://jlne.ws/h4ZjvE
The 2011 World Economic Forum in Davos, Switzerland
Dignitaries, economists, and business leaders from around the world gather in Davos, Switzerland, for the annual World Economic Conference. They will discuss free markets and the global economic recovery during the five-day conference.
http://jlne.ws/ikmYU8
Ardian Fullani, Governor of Bank of Albania, analysis of domestic economic developments, banking sector
BIS
Ladies and Gentlemen,
The Bank of Albania considers its communication with the public a key element to an effective communication of its decision-making. To serve this purpose, it makes use of all forms and types of communication. However, direct contact with the people provides us with a real perception and interpretation of their position and expectations and supports a more effective decision-making process. Therefore, I am pleased to be again in your city, the centre of a region of well-known intellectual, cultural and patriotic...
http://bis.org/review/r110128e.pdf
Chapdelaine Credit Partners Said to Close as Primus Deal Fails
By Lisa Abramowicz, Bloomberg
Chapdelaine Credit Partners, the bond broker started two years ago when debt markets seized up, will close next week after failing to raise capital, according to people with direct knowledge of the matter.The firm held a meeting in New York today to inform employees that the unit of Chapdelaine & Co., a municipal bond broker founded in 1966, will close as soon as Jan. 31, said the people, who declined to be identified because they aren’t authorized to discuss the changes publicly.
Few Signs of United Approach to Financial Regulation
By JACK EWING - NY Times
DAVOS, Switzerland - This heavily guarded ski village is probably the only place on the planet where you can get the world's top central bankers, regulators, economists and business leaders to sit down together in the same room.
http://jlne.ws/gX4Er4
Merkel Defies Deutsche Bank as Ackermann Frets Over Sinking Bonds in Davos
Bloomberg
The leader of Europe's biggest economy and the head of Germany's largest bank, partners in a financial rescue two years ago, are rattling investors with their feud about how to manage the sovereign-debt crisis.
http://jlne.ws/i5ta9S
Experts predict eurozone debt reforms
By Chris Giles in Davos - Financial Times
The financial markets may have offered a recent respite to highly indebted eurozone members but they will still be forced into early sovereign restructuring, said leading economists at the World Economic Forum in Davos.
http://jlne.ws/e8BMAK
Citigroup Chief Pandit Sees `Robust' Capital Markets, Support for the Euro
Bloomberg
Client flows are strong and stable for Citigroup, and credit quality is a "lot better than a year ago," Pandit said today during an interview in Davos, Switzerland, on Bloomberg Television's "Inside Track."
http://jlne.ws/i5yZAt
BofA, Barclays, Credit Suisse, JPMorgan Confer in Davos About Rules, Risk
Bloomberg
Robert Diamond, chief executive officer of Barclays Plc, talks about winning back the public's trust and market share in the bank's merger and acquisition advisory business.
http://jlne.ws/fRYMhj
Sarkozy tells G20 'dare to dream'
By Chris Giles in Davos
The legitimacy of the Group of 20 leading economies rests on "its abilities to take decisions", Nicolas Sarkozy, the French president, told the World Economic Forum on Thursday.
http://jlne.ws/dO5T7S
Harsh Words for Regulators in Crisis Commission Report
By BEN PROTESS and SUSANNE CRAIG - NY Times
The Congressional commission's scathing account of the financial crisis casts regulators in a rather unflattering light, as the sheriff who didn't stop Wall Street from becoming the Wild West.
http://jlne.ws/gnxzV2
New York Fed Weighed Ousting Fuld, Helping Pick His Successor
By Craig Torres and Caroline Salas
Federal Reserve officials considered the need to fire Lehman Brothers Holdings Inc. Chairman Richard Fuld just before the firm collapsed in 2008, an e-mail released by the Financial Crisis Inquiry Commission showed. "Does Fuld have to be replaced on Sunday?" the e-mail memo, dated Sept. 10, 2008, asks. "If so, do we exercise influence over the choice of his successor?"
http://jlne.ws/gu0hIG
Goldman Got $2.9 Billion for Own Bets in AIG Bailout, FCIC Says
BusinessWeek
Goldman Sachs Group Inc. received $2.9 billion for its own account as a taxpayer bailout enabled American International Group Inc. to make good on credit-default swaps linked to mortgages, a congressionally appointed panel said.
http://jlne.ws/foqgfI
La Caixa banking unit to be listed group
By Victor Mallet, Financial Times
La Caixa, the unlisted Barcelona-based savings bank that has the biggest domestic retail network in Spain, will move its banking operations into a listed company as part of a plan to strengthen its capital base and continue growing.
http://jlne.ws/go3tEL
Morgan Stanley Names 232 Managing Directors, the Largest Number Since 2007
Bloomberg
Morgan Stanley , owner of the world's largest brokerage, appointed 232 new managing directors, the most to achieve the company's highest rank since 2007.
http://jlne.ws/ed683Y
RBS fights for universal cause
eFinancial News
Financial institutions with investment banking and retail banking divisions are less risky than narrow banks. Or at least that is what this chart argues. Author of the chart? Well, the Royal Bank of Scotland, a universal bank.
http://jlne.ws/f9kJgX
Schwab Declares Regular Quarterly Dividend
Business Wire
SAN FRANCISCO--(BUSINESS WIRE)--The Board of Directors of The Charles Schwab Corporation has declared a regular quarterly cash dividend of $0.06 per common share. The dividend is payable February 25, 2011 to stockholders of record February 11, 2011. About Charles Schwab The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 8.0 ...
http://jlne.ws/gwbbwJ
Kamis, 27 Januari 2011
January 27, 2011: The Financial-Crisis Commission Fails To Solve The Whodunit [NEWSLETTER]
Conversation Starter
Report of the Financial Crisis Inquiry Commission
The Financial Crisis Inquiry Commission has concluded that the financial crisis was avoidable. It found widespread failures in financial regulation; dramatic breakdowns in corporate governance; excessive borrowing and risk-taking by households and Wall Street; policy makers who were ill prepared for the crisis; and systemic breaches in accountability and ethics at all levels.
See the full report here.
**CN: The most interesting take on all of this is probably the piece below from The Economist.
Stories related to this topic:
America's financial-crisis commission: The financial-crisis commission fails to solve the whodunit
The Economist
IT IS not the most promising script for a whodunit. Ten experts are brought together to solve a mystery, but they can’t get along and ultimately reach three different conclusions. That, sadly, is the story of America’s Financial Crisis Inquiry Commission, whose book-length report was released on January 27th.
http://jlne.ws/e7dbBO
Split US crisis panel blames Greenspan, Wall St
By Dave Clarke and Kevin Drawbaugh, Reuters
A deeply divided U.S. investigative panel issued a scathing critique of the culture of deregulation championed by Former Federal Reserve Chairman Alan Greenspan, saying the government had ample power to avert the financial crisis of 2007-2009 and chose not to use it.
http://jlne.ws/gzfs4b
Crisis Panel Report Pins Blame on Wall Street, Washington
By Robert Schmidt and Phil Mattingly, Bloomberg
The congressionally appointed panel assigned to probe the origins of the 2008 credit crisis heaped blame on “reckless” Wall Street firms and “weak” federal regulators, concluding the meltdown could have been avoided.
http://jlne.ws/fJg3io
Moody's Modeled 4% Annual Rise in Home Prices for Bond Ratings
By Matthew Leising, Bloomberg
Moody's Corp. assumed U.S. home prices would rise 4 percent annually when it developed a model in 2003 to rate mortgage-backed securities, according to the Financial Crisis Inquiry Commission.
http://jlne.ws/hnctPK
Fed Faulted for Lax Mortgage Regulation Before Financial Crisis
Bloomberg
The Federal Reserve failed to forestall the housing bubble or prevent the abusive lending practices that contributed to it, the Financial Crisis Inquiry Commission said in a report, embracing a lesson that legislators have already tried to correct with new laws.
http://jlne.ws/fO9QLa
Goldman Sachs Got Billions From AIG For Its Own Account, Crisis Panel Finds
The Huffington Post
Goldman Sachs collected $2.9 billion from the American International Group as payout on a speculative trade it placed for the benefit of its own account, receiving the bulk of those funds after AIG received an enormous taxpayer rescue, according to the final report of an investigative panel appointed by Congress.
http://jlne.ws/fzMhsI
Financial Meltdown Was ‘Avoidable,’ Inquiry Concludes
By SEWELL CHAN, The New York Times
The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a Congressional inquiry.
http://jlne.ws/esD8T7
Lead Stories
Strengthening Fiscal Credibility: Fiscal Monitor Update -- January 2011 -- IMF
Despite the improving global outlook, the pace of fiscal consolidation this year is slowing in some key countries. The United States and Japan are adopting new stimulus measures and delaying consolidation relative to the pace envisaged in the November 2010 Fiscal Monitor.
http://jlne.ws/f7oNa0
The FOMC is Right to Stay the Course on QE2 | Jeff Frankels Weblog | Views on the Economy and the World
The Fed has come in for a surprising amount of criticism since its decision in the fall of 2010 to launch a new round of monetary easing — Quantitative Easing 2. Ben Bernanke and his colleagues are right not to give in to these attacks.
http://jlne.ws/h1mpcr
Derivatives Rules Need to Be Simpler, Cheaper, Republicans Say
BusinessWeek
The U.S. Commodity Futures Trading Commission should voluntarily follow President Barack Obama's effort to streamline regulations as it sets new rules on the $583 trillion swaps market, two top House Republicans said.
http://jlne.ws/gEdREO
Frank says cuts would hamper oversight
Boston Globe
Representative Barney Frank lashed out yesterday at Republican efforts to cut federal spending to 2008 levels, saying the move would cripple regulators' ability to oversee financial markets and implement the overhaul of financial regulations passed last year.
http://jlne.ws/gK9bC3
TARP Profit on Citigroup: $12.3 Billion
BY Tom Barkley, WSJ.com
The U.S. is set to record a net $312.2 million from its sale of its final 465.1 million warrants to purchase common shares of Citigroup Inc., the Treasury Department said Wednesday.
http://jlne.ws/icd8bp
IMF Sees Europe's Debt as Top Recovery Threat
By MICHAEL R. CRITTENDEN, WSJ.com
European officials need to expand the region's financial rescue fund and subject their banks to more rigorous stress tests to quell a key threat to the global economic recovery, the International Monetary Fund said Tuesday.
http://jlne.ws/fPkpCR
Traders Laying Groundwork For New Type Of Credit Derivative
By Katy Burne
A clutch of traders at big investment banks is trying to get a new kind of derivative instrument off the ground that would help them mitigate the risk of a growing correlation between interest rates and risk premiums in the credit markets.
http://jlne.ws/eTj0pW
Sarkozy: No Desire To Question Global Role Of US Dlr
iMarketNews.com
By calling for a reform of the world monetary system, France has no intention of calling into question the role of the U.S. dollar, French President Nicolas Sarkozy said Monday. Sarkozy, speaking at a press conference at the Elysee Palace, spelled out France's ambitious agenda for tackling global financial instability, growing payments imbalances and the institutional monetary order.
http://jlne.ws/f17UC8
Volcker Out, Immelt In on Economic Board
By SHERYL GAY STOLBERG and ANAHAD O'CONNOR, NY Times
SCHENECTADY, N.Y. - President Obama will name Jeffrey R. Immelt, the chief executive officer and chairman of General Electric, on Friday to run his outside panel of economic advisers, replacing Paul A. Volcker, the former Federal Reserve chairman, who is stepping down, the White House said.
http://jlne.ws/eEvxDs
Issa Asks for Geithner, Settles for Assistant for First Oversight Hearing
Bloomberg
U.S. House Oversight and Government Reform Committee Chairman Darrell Issa , who has said he will hold hundreds of hearings to challenge the Obama administration, tried to get Treasury Secretary Timothy Geithner for his initial one. Instead, he is settling for an assistant.
http://jlne.ws/h0KDsv
Banks Want Pieces of Fannie-Freddie Pie
By LOUISE STORY, NY Times
As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nation's largest banks are offering a few suggestions. Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities - that would be stamped with a government guarantee.
http://jlne.ws/e6NOVG
Budget Deficit Is Expected to Grow 14% to $1.5 Trillion in Fiscal 2011
By COREY BOLES, WSJ.com
The Congressional Budget Office painted a grim picture of the federal government's finances Wednesday, saying the budget deficit would jump to nearly $1.5 trillion in the current fiscal year, largely because of a tax-cut extension enacted last year.
http://jlne.ws/eBE9f1
DJIA Tops 12000
By JONATHAN CHENG, WSJ.com
The Dow Jones Industrial Average vaulted over 12000 for the first time in almost three years and bounced around that milestone throughout the session, as investors cheered President Obama's State of the Union address and the unanimous decision by the Federal Reserve to stay the course on supporting the economy.
http://jlne.ws/hISn8E
Mortgage Giants Leave Legal Bills to the Taxpayers
By NY Times
Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.
http://jlne.ws/fZUMDB
Muni funds record outflow
By Daniel Bases, Reuters
Municipal bond funds suffered a record outflow of cash in the week ended Jan. 19 while U.S. and European equity funds saw inflows as more cash moved off the sidelines, fund-tracker EPFR Global said on Friday.
http://jlne.ws/fYVJmu
CalPERS says investments grew 12.5% in 2010
Los Angeles Times
The smaller CalSTRS ends the year with a 12.7% return as the nation's two largest public pension funds get back on track after suffering steep losses during the recession. Investment returns at the nation's two largest public pension systems are back on track after suffering steep losses during the Great Recession.
http://jlne.ws/hScXUh
FOMC meeting:
FRB: FOMC statement--January 26, 2011
Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward....
http://jlne.ws/e3MF3i
U.S. Rate Futures: traders pare bets on 2011 Fed hike
Reuters
U.S. short-term interest rate futures traders pared bets that the Federal Reserve will start raising rates this year after the central bank left rates near zero and reiterated its promise to keep them there for an extended period.
http://jlne.ws/fMoRsU
**CN: Futures prices move to dip under a 60 percent chance of an increase in December to the Fed's target rate for overnight lending between banks.
United Fed Stands Pat
By Luca Di Leo And Jeffrey Sparshott, WSJ.com
Federal Reserve officials were united Wednesday in deciding to continue buying government bonds to boost the recovery, even as they acknowledged that the U.S. economy looks in better shape.
http://jlne.ws/hvmqMT
Instant view: Fed lukewarm on economy, jobs
Reuters
The U.S. Federal Reserve gave a lukewarm economic assessment on Wednesday despite recent signs the recovery was strengthening, saying high unemployment still justified its $600 billion bond-buying program.
http://jlne.ws/fyDhP9
Stories from Davos:
A Banker's Plaintive Wail
By Matthew Dalton - WSJ
A plaintive cry from one of the world's top bankers on behalf of his industry pierced through an otherwise tame Thursday morning panel discussion here in Davos:
http://jlne.ws/gxbsHS
Global economy fears ease at Davos forum
By Chris Giles in Davos, Financial Times
Participants at the opening sessions of the World Economic Forum in Davos on Wednesday shrugged off weak UK growth figures and expressed confidence that the global economy is set fair.
http://jlne.ws/ffVAaS
Wall Street Partying in Davos as Bankers Overcome Crisis Angst
Bloomberg
As Wall Street chief executive officers flock to the World Economic Forum, they'll be breathing a sigh of relief along with the Swiss mountain air: There are no panels on compensation or redesigning financial regulation.
http://jlne.ws/fiCEN4
**CN: At $20K just to buy a ticket for this forum, Davos is quite a party.
Davos: finding common ground in a complex world
By Patrick Jenkins - Financial Times
If anyone needed a reminder of the vastness of ambition that underpins the annual Davos meeting of the World Economic Forum, a quick glance at the programme of meetings on day one would do it.
http://jlne.ws/gW4rtv
Events
Making Sense of Credit Default Swaps (CDS), New York
January 26, 2011
Institute for Financial Markets Looks At CDS Market - New York
www.theifm.org
The 36th Annual International Futures Industry Conference
March 15-18, 2011
FIA's Annual Convention - Boca Raton
http://www.futuresindustry.org/boca-2011-program.asp
SIFMA 2nd Annual Private Client Conference
Apr. 7 and 8, 2011
SIFMA's Conference For Private Client Groups At All Levels - New York
http://www.sifma.org/events/event.aspx?id=22289
Exchanges, Clearing Houses & MTFs
NYSE Euronext Bond-Trading Venture To Go Live In March
By Jacob Bunge, Dow Jones Newswires
NYSE Euronext (NYX) aims to launch a new bond-trading effort in March after securing approval from U.S. securities market regulators, according to the exchange company. The Securities and Exchange Commission last week cleared NYSE Euronext to move ahead with a program that will see major brokers and electronic trading firms make a new market in the debt of companies listing shares on NYSE Euronext.
http://jlne.ws/fZnki7
CME Treasury Options To Expire Weekly, Eyes Key Economic Data
WSJ.com
Traders of U.S. interest rate derivatives have a new way to speculate on the release of key economic data and other market-moving events. Beginning Sunday evening, users of CME Group Inc. (CME) trading platforms can buy and sell options on Treasury futures that expire on a weekly basis. Treasury options currently expire only on a monthly basis.
http://jlne.ws/fGJD1x
ICE Surpasses $15 Trillion Milestone in Global CDS Clearing
NEW YORK, Jan. 25, 2011 /PRNewswire/ -- IntercontinentalExchange (NYSE: ICE), a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, announced that its credit default swap (CDS) clearing houses surpassed $15 trillion in cumulative gross notional value and 400,000 transactions during the week ending January 21, 2011.
http://jlne.ws/99Rt1r
Firms & Banks
Break up the big banks, says merger mastermind Mathewson
The Scotsman
Veteran Scottish banker Sir George Mathewson has called for the break-up of the deal that defined his years of leadership at Royal Bank of Scotland and cemented his position a
http://jlne.ws/hsgN8I
Barclays CEO Diamond Says Banking Commission Won't Split Up U.K. Lenders
Bloomberg
Barclays Plc Chief Executive Officer Robert Diamond said John Vickers , chairman of the Independent Commission on Banking, won't recommend splitting up U.K. lenders.
http://jlne.ws/fLDJ9L
Barclays bank to axe 1,000 jobs
Straits Times
LONDON - BRITISH bank Barclays on Wednesday announced plans to axe 1,000 jobs and close its financial planning services unit, while the firm's investment banking division was hit with a 1.12 million pound (S$2.27 million) fine. The company said in a statement that it has entered into talks with employees at its Barclays Financial Planning unit, which offers face-to-face financial planning ...
http://jlne.ws/fiJX5R
Fitch Upgrades Citigroup's Individual Rating and Unsupported IDRs
Business Wire
Fitch Ratings has upgraded the Individual Rating of Citigroup Inc. (Citi) to 'B/C' from 'C'. In addition, Fitch has upgraded Citi's 'unsupported' long- and short-term Issuer Default Ratings (IDRs) to 'A-' and 'F1', respectively, from 'BBB+' and 'F2'. A complete list of ratings follows this release. The upgrades of Citi's unsupported ratings reflect its fundamental ...
http://jlne.ws/f7jyqQ
Treasury sells Citigroup warrants for $312 mln
Market Watch
The Treasury Department announced Wednesday that it sold Citigroup Inc. warrants for $312.2 million. The government sold 255 million A warrants for $1.01 per warrant, compared with a minimum bid of 60 cents set on Monday. The government sold 210 million B warrants priced at 26 cents per warrant, compared with a minimum bid of 15 cents per warrant. The buyers of the ...
http://jlne.ws/gwEzqd
Morgan Stanley sees threat banks could shrink credit
Business Standard India
Banks may shrink credit in order to meet tougher capital requirements, posing a "serious threat" to the real economy, Domenico Siniscalco, Vice President of Morgan Stanley International and country head for Italy, told Reuters.
http://jlne.ws/fAVJEj
Credit Agricole Hires Pao as Fixed Income Head in Thailand
Bloomberg
Credit Agricole CIB hired Pao Chatakanonta as head of fixed income markets for Thailand, according to an e-mailed media release.
http://jlne.ws/f7tXzp
Citigroup Bailout Warrants Will Be Auctioned by U.S.
BusinessWeek
The U.S. Treasury Department announced plans to auction warrants to purchase stock in Citigroup Inc. that taxpayers received as part of the bank's $45 billion rescue during the financial crisis.
http://jlne.ws/f7gv9r
HSBC chief drops Hong Kong move
Channel NewsAsia
HONG KONG: The new chief executive of HSBC has dropped plans to relocate to Hong Kong, where his predecessor was based to push the bank's Asia business, and will stay in London, a report said Tuesday.
http://jlne.ws/f9MYkY
American Express Falls Short With 48% Profit Jump
Forbes
In the fourth quarter of 2010, American Express saw profits shoot higher but not as high as analysts had forecasted.
http://jlne.ws/gs4QmW
Paulson posts more than $1bn in Citi gains
By Sam Jones in London and Dan McCrum in New York - Financial Times
Paulson and Co, the world's third-largest hedge fund manager, has told clients it has made more than $1bn from its stake in Citigroup over the past 18 months and expects US growth to accelerate this year.
http://jlne.ws/edPMRf
JPMorgan Refused Mortgage Repurchases It Also Sought, Ambac Assurance Says
Bloomberg
JPMorgan Chase & Co. demanded that a lender repurchase bad mortgages even as it resisted calls to buy back the loans from bonds created by Bear Stearns Cos., an insurer said in court papers.
http://jlne.ws/e5ADoT
Banks face major shake-up in plans being considered by inquiry
Daily Telegraph
The head of the independent commission examining whether the UK's biggest banks should be broken up warns the industry must prepare for wide-ranging reforms.
http://jlne.ws/gzeBfa
Goldman Sachs Bond Sale Signals Inflation Concerns Waning
Bloomberg
Goldman Sachs Group Inc .'s offering of 30-year bonds, its first in more than three years, signals waning concern among investors that inflation is accelerating.
http://jlne.ws/fHd2r5
UBS Snaps Up Two Impressive Ex-Deutsche Bankers To Run "Turbocharged" Equities Desks
Business Insider
Ricardo Honegger , the new Head of UBS Global Synthetic Equity, previously headed global markets and global banking for the Middle East North Africa region. He was also the chief country officer for the UAE.
http://jlne.ws/eSLk15
Citigroup gives CEO Vikram Pandit a big raise
Straits Times
CITIGROUP Inc is giving its CEO a big raise. The New York-based bank is lifting Vikram Pandit's base salary to US$1.75 million (S$2.25 million) from just US$1 a year effective immediately, according to a filing with the Securities and Exchange Commission on Friday.
http://jlne.ws/hHmZIN
Morgan Stanley Hires Goldman Bond Trader As Global Head Of Rates Unit
Dow Jones
The shuffling at Morgan Stanley (MS) continues, as the firm hired Glenn Hadden, a Goldman Sachs Group Inc. (GS) bond trader, as global head of its interest rates division.
http://jlne.ws/fEDXJS
RBS in talks to exit asset protection scheme
Reuters
Royal Bank of Scotland isin talks with the Treasury about ways in which the partlynationalised bank could leave the government's asset protectionscheme (APS) early, the Financial ...
http://jlne.ws/h3tuFE
Fifth Third raises funds to repay Tarp
By Telis Demos, Financial Times
Fifth Third, a leading Midwestern bank, sold $1.7bn in shares on Thursday to help repay funds the US Treasury lent it during the financial crisis.
http://jlne.ws/hR4wC6
Cantor Prepares to Debut Commercial-Mortgage-Backed Bond Offer
By Sarah Mulholland, Bloomberg
Cantor Fitzgerald LP, the bond broker working to transform itself into a full-service investment bank, is preparing to issue its first securities tied to commercial property loans.
http://jlne.ws/fVy99U
Was Barclays mis-selling? It's hardly a million dollar question
Daily Telegraph
Picture the scene. It's Who Wants To Be A Millionaire the Personal Finance Special, and Chris Tarrant turns to the nervous contestant and asks the following question: "OK, take your time, as there is a lot of money at stake here.
http://jlne.ws/dK0o99
Auctions & Statistics
NYFed_news NY Fed purchases $5.790 bln in Tsy coupons: NY Fed purchases $5.790 bln in Tsy coupons
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://bit.ly/ieb7zN
Fed Buys $8.36 Billin In POMO
By Roger Nachman, Benzinga
The New York Federal Reserve purchased $8.36 billion in U.S. Treasury debt during its permanent open market operations (POMO) today. Dealers submitted $18.959 billion worth of debt, meaning the auction was more than five times oversubscribed, which is much higher than most auctions have been recently. This is something to keep an eye on going forward.
http://jlne.ws/fHfplD
Survey Indicates Inflation Expectation Still Muted
By Michael S. Derby, WSJ.com
U.S. households expect inflation to rise over the short term but remain contained over the longer run, shrugging off higher food and energy prices, in a positive sign for consumer spending patterns, according to a report Friday.
http://jlne.ws/fDdByl
Regulators
Noyer Urges More Flexible Rescue Fund
BY BRIAN BLACKSTONE AND NATHALIE BOSCHAT, WSJ.com
A top European Central Bank official urged euro-zone governments to make their €440 billion ($602 billion) crisis fund more flexible so that it can buy bonds of fiscally distressed governments and offer them short-term credit lines, a signal that the ECB wants to reduce its role in fighting the currency bloc's debt crisis.
http://jlne.ws/hMPtbl
IMF extends Poland $30bn credit line
BBC
The International Monetary Fund (IMF) has approved a two-year, $30bn (£19bn) credit facility with Poland, replacing a one-year arrangement agreed in July.
http://jlne.ws/eMUDUa
Accounting tweak could save Fed from losses
By Pedro Nicolaci da Costa, Reuters
Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.
http://jlne.ws/hHU3QM
Dodd-Frank Swaps Rules Deadline 'Unrealistic', O'Malia says
Bloomberg
The Dodd-Frank Act's "unrealistic" July deadline for rules to govern the swaps market may undermine regulators' efforts to increase transparency and reduce risk, Commodity Futures Trading Commission member Scott O'Malia said in a New York speech.
http://jlne.ws/hO2bJP
China’s Top Banking Regulator May Retire This Year
By Kelvin Wong, Bloomberg
China Banking Regulatory Commission Chairman Liu Mingkang may retire this year and be replaced by a senior executive from one of the country’s four biggest state- controlled banks, Ming Pao reported, citing people it didn’t identify.
http://jlne.ws/h47EaJ
OFT chief John Fingleton: 'more banks doesn't mean more competition'
Daily Telegraph
John Fingleton, chief executive of the Office of Fair Trading, has warned MPs that simply creating more banks will not solve competition problems in UK's financial services sector.
http://jlne.ws/i9BmD5
INTERVIEW-Budgets one way to 'throttle' Dodd-Frank - Garrett
Reuters
The head of a congressional panel that oversees U.S. financial regulation said on Tuesday that budget restraint is just one way Republicans are trying to "throttle" some of the Dodd-Frank banking reforms. U.S. Representative Scott Garrett, the Republican chairman of the House capital markets subcommittee, said he knows Democrats accuse Republicans of trying to throttle Dodd-Frank by restraining the budgets of agencies that must implement it.
http://jlne.ws/ezkDkP
The Dodd-Frank rules you don't know
By TIM KILADZE, Globe and Mail
The Dodd-Frank Act is an omnibus 1,200 page document that cracks down on things like consumer protection and derivatives trading. But many people don't know it also includes over 100 SEC and stock exchange mandates, and these will be implemented very soon.
http://jlne.ws/h5JMJL
**CN: This one's worth a read.
Getting financial regulations right - Crain's column from president and chief executive of SIFMA, Tim Ryan
By Tim Ryan, Crain's
The Dodd-Frank Act, legislation that fundamentally changed our financial system, is just 6 months old, and already regulators have made reasonable progress toward implementing the law. But much work still lies ahead, and 2011 will be a crucial year for the financial industry. Our focus will be to “get it right.” We operate in global financial markets where new rules must be written on a coordinated basis by regulators around the world.
http://jlne.ws/g7dWIH
Core Principles for Effective Deposit Insurance Systems - A methodology for compliance assessment
BIS Release
In June 2009, the International Association of Deposit Insurers (IADI) and the Basel Committee on Banking Supervision (BCBS) issued Core Principles for Effective Deposit Insurance Systems. Since December 2009, IADI has been collaborating with the BCBS, the European Forum of Deposit Insurers (EFDI), the International Monetary Fund (IMF), the World Bank, and the European Commission (EC) to develop a robust methodology to assess compliance with the Core Principles. A consultative document was published in November 2010. A final version incorporating the comments received was submitted to the Financial Stability Board in December 2010.
http://jlne.ws/dV9lph
OTC
DTCC and Markitserv Collaberate with Acadiasoft to Automate Collateral Messaging and Reduce Risk in OTC Derivatives
Press Release
The Depository Trust and Clearing Corporation (DTCC), MarkitSERV and AcadiaSoft today announced that they are working to deliver a joint solution for improving communication related to setting and maintaining the collateral required between counterparties to over-the-counter (OTC) derivative transactions. The solution is the first step taken by the three companies to develop a multi-functional collateral processing platform for the OTC derivative market.
http://jlne.ws/dMI2Yw
Derivatives Executives Are Wary Of Electronic Swaps Trading
By Katy Burne, Of DOW JONES NEWSWIRES
Moving a large portion of privately traded derivatives, or swaps, on to futures exchanges and other regulated execution platforms in accordance with new regulation will take a huge leap of faith from industry participants, panelists at a derivatives conference in New York warned Tuesday.
http://jlne.ws/fGfm19
Morningstar adds OTC Markets Group data to Quotes feed
Press Release
Morningstar (NASDAQ: MORN), a leading provider of independent investment research, today announced that the company has added OTC Markets Group data (previously known as Pink OTC Markets) to its Morningstar Quotes Data Feed.
http://jlne.ws/eaPQ4R
Newedge appointed swap counterparty by Aspect Capital on new UCITS launch
Press Release
Newedge, a global leader in multi-asset brokerage and clearing, announces its appointment by Aspect Capital Limited, as swap counterparty to the Aspect Diversified Trends Fund, a Dublin domiciled UCITs-compliant fund with daily liquidity.
http://jlne.ws/dxcSLk
SunGard’s Stream GMI Supports Eris Exchange Interest Rate Swap Futures
Press Release
SunGard’s Stream GMI post-trade derivatives solution now gives CME Clearing members the ability to use their existing trade capture and bookkeeping processes to clear Eris Exchange’s interest rate swap futures through CME Clearing. Support for OTC interest rate swaps clearing is a key element of SunGard’s strategy to support listed derivatives and the transition of OTC interest rate swap products to the clearinghouse model as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition to Eris Exchange, Stream GMI currently supports OTC interest rate swaps clearing with CME Group, International Derivatives Clearinghouse (IDCH) and LCH.Clearnet UK SwapClear.
http://jlne.ws/fEDzlB
Global News
Euro Zone inflation: The Good, The Bad and The Ugly
By Brian Blackstone, WSJ.com
With euro zone inflation above the ECB’s sub-2% target for the first time in over two years, and ECB officials sending hawkish signals of late, price pressures are being scrutinized more closely than usual in the euro bloc.
http://jlne.ws/fo6mWs
S&P downgrades Japan on debt worries
By Lindsay Whipp and Mure Dickie in Tokyo, Financial Times
Standard & Poor's has cut Japan's sovereign debt rating for the first time since 2002, saying the government lacks a "coherent strategy" for dealing with its soaring state debt.
http://jlne.ws/ebalEC
Kenyan Bank Earnings to Rise 30% in 2010 on Margins, African Alliance Says
Bloomberg
Kenya's banks are poised to increase earnings by an average of 30 percent this year as interest margins widen, African Alliance Securities Kenya Ltd. said.
http://jlne.ws/hzJt2W
China Drops Hint On Forex Policy, May Auger Higher Yuan
By Ian Talley, Automated Trader
China hinted in talks during President Hu Jintao's visit this week that it might be looking more broadly at the rationale for setting the exchange rate. A potential change may augur a higher yuan value.
http://jlne.ws/h6Xzgd
Madrid tells banks to boost core capital
By Victor Mallet in Madrid - Financial Times
Spain will force its weaker savings banks to raise more capital or face nationalisation in an effort to restore confidence in the Spanish economy.
http://jlne.ws/f5VEnd
Big banks losing share to Indie fund groups
By Ruth Sullivan, Financial Times
Big asset managers, particularly those with large banking or insurance parents, have traditionally been the winners in Europe. Economies of scale, distribution networks and plentiful resources have all contributed to their dominance, leaving little space for independent investment houses to compete successfully, especially in Spain, France and Italy where asset management is largely part of banking group activity.
http://jlne.ws/hmvgry
Oversight of banks costs US far more than EU
By Brooke Masters in London - Financial Times
The US spends more than six times as much to supervise banks and other credit institutions as the European Union, research has found.
http://jlne.ws/gnA2Hy
Goldman Downplays Spain Insolvency Fears
RTT News
Spain does not have an underlying solvency problem and the prospect of a default is highly unlikely, Goldman Sachs said on Friday.
http://jlne.ws/hNbESq
Lisbon move points to end of risk-free sovereigns
By Gillian Tett, Financial Times
Another week, another bout of angst about sovereign and municipal risk. But as investors fret about Spain and Belgium - or Illinois and California - they should take a close look at a fascinating little development in Lisbon.
http://jlne.ws/hziCo8
Wema Bank of Nigeria Sells $100 Million of Non-Performing Loans to Amcon
Bloomberg
Wema Bank Plc , a Nigerian lender that failed a central-bank audit in 2009, sold 15.2 billion naira ($100 million) of loans to the state-owned company set up to support the nation's banks, spokesman Tunde Olofintila said.
http://jlne.ws/f4OsRv
Report of the Financial Crisis Inquiry Commission
The Financial Crisis Inquiry Commission has concluded that the financial crisis was avoidable. It found widespread failures in financial regulation; dramatic breakdowns in corporate governance; excessive borrowing and risk-taking by households and Wall Street; policy makers who were ill prepared for the crisis; and systemic breaches in accountability and ethics at all levels.
See the full report here.
**CN: The most interesting take on all of this is probably the piece below from The Economist.
Stories related to this topic:
America's financial-crisis commission: The financial-crisis commission fails to solve the whodunit
The Economist
IT IS not the most promising script for a whodunit. Ten experts are brought together to solve a mystery, but they can’t get along and ultimately reach three different conclusions. That, sadly, is the story of America’s Financial Crisis Inquiry Commission, whose book-length report was released on January 27th.
http://jlne.ws/e7dbBO
Split US crisis panel blames Greenspan, Wall St
By Dave Clarke and Kevin Drawbaugh, Reuters
A deeply divided U.S. investigative panel issued a scathing critique of the culture of deregulation championed by Former Federal Reserve Chairman Alan Greenspan, saying the government had ample power to avert the financial crisis of 2007-2009 and chose not to use it.
http://jlne.ws/gzfs4b
Crisis Panel Report Pins Blame on Wall Street, Washington
By Robert Schmidt and Phil Mattingly, Bloomberg
The congressionally appointed panel assigned to probe the origins of the 2008 credit crisis heaped blame on “reckless” Wall Street firms and “weak” federal regulators, concluding the meltdown could have been avoided.
http://jlne.ws/fJg3io
Moody's Modeled 4% Annual Rise in Home Prices for Bond Ratings
By Matthew Leising, Bloomberg
Moody's Corp. assumed U.S. home prices would rise 4 percent annually when it developed a model in 2003 to rate mortgage-backed securities, according to the Financial Crisis Inquiry Commission.
http://jlne.ws/hnctPK
Fed Faulted for Lax Mortgage Regulation Before Financial Crisis
Bloomberg
The Federal Reserve failed to forestall the housing bubble or prevent the abusive lending practices that contributed to it, the Financial Crisis Inquiry Commission said in a report, embracing a lesson that legislators have already tried to correct with new laws.
http://jlne.ws/fO9QLa
Goldman Sachs Got Billions From AIG For Its Own Account, Crisis Panel Finds
The Huffington Post
Goldman Sachs collected $2.9 billion from the American International Group as payout on a speculative trade it placed for the benefit of its own account, receiving the bulk of those funds after AIG received an enormous taxpayer rescue, according to the final report of an investigative panel appointed by Congress.
http://jlne.ws/fzMhsI
Financial Meltdown Was ‘Avoidable,’ Inquiry Concludes
By SEWELL CHAN, The New York Times
The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a Congressional inquiry.
http://jlne.ws/esD8T7
Lead Stories
Strengthening Fiscal Credibility: Fiscal Monitor Update -- January 2011 -- IMF
Despite the improving global outlook, the pace of fiscal consolidation this year is slowing in some key countries. The United States and Japan are adopting new stimulus measures and delaying consolidation relative to the pace envisaged in the November 2010 Fiscal Monitor.
http://jlne.ws/f7oNa0
The FOMC is Right to Stay the Course on QE2 | Jeff Frankels Weblog | Views on the Economy and the World
The Fed has come in for a surprising amount of criticism since its decision in the fall of 2010 to launch a new round of monetary easing — Quantitative Easing 2. Ben Bernanke and his colleagues are right not to give in to these attacks.
http://jlne.ws/h1mpcr
Derivatives Rules Need to Be Simpler, Cheaper, Republicans Say
BusinessWeek
The U.S. Commodity Futures Trading Commission should voluntarily follow President Barack Obama's effort to streamline regulations as it sets new rules on the $583 trillion swaps market, two top House Republicans said.
http://jlne.ws/gEdREO
Frank says cuts would hamper oversight
Boston Globe
Representative Barney Frank lashed out yesterday at Republican efforts to cut federal spending to 2008 levels, saying the move would cripple regulators' ability to oversee financial markets and implement the overhaul of financial regulations passed last year.
http://jlne.ws/gK9bC3
TARP Profit on Citigroup: $12.3 Billion
BY Tom Barkley, WSJ.com
The U.S. is set to record a net $312.2 million from its sale of its final 465.1 million warrants to purchase common shares of Citigroup Inc., the Treasury Department said Wednesday.
http://jlne.ws/icd8bp
IMF Sees Europe's Debt as Top Recovery Threat
By MICHAEL R. CRITTENDEN, WSJ.com
European officials need to expand the region's financial rescue fund and subject their banks to more rigorous stress tests to quell a key threat to the global economic recovery, the International Monetary Fund said Tuesday.
http://jlne.ws/fPkpCR
Traders Laying Groundwork For New Type Of Credit Derivative
By Katy Burne
A clutch of traders at big investment banks is trying to get a new kind of derivative instrument off the ground that would help them mitigate the risk of a growing correlation between interest rates and risk premiums in the credit markets.
http://jlne.ws/eTj0pW
Sarkozy: No Desire To Question Global Role Of US Dlr
iMarketNews.com
By calling for a reform of the world monetary system, France has no intention of calling into question the role of the U.S. dollar, French President Nicolas Sarkozy said Monday. Sarkozy, speaking at a press conference at the Elysee Palace, spelled out France's ambitious agenda for tackling global financial instability, growing payments imbalances and the institutional monetary order.
http://jlne.ws/f17UC8
Volcker Out, Immelt In on Economic Board
By SHERYL GAY STOLBERG and ANAHAD O'CONNOR, NY Times
SCHENECTADY, N.Y. - President Obama will name Jeffrey R. Immelt, the chief executive officer and chairman of General Electric, on Friday to run his outside panel of economic advisers, replacing Paul A. Volcker, the former Federal Reserve chairman, who is stepping down, the White House said.
http://jlne.ws/eEvxDs
Issa Asks for Geithner, Settles for Assistant for First Oversight Hearing
Bloomberg
U.S. House Oversight and Government Reform Committee Chairman Darrell Issa , who has said he will hold hundreds of hearings to challenge the Obama administration, tried to get Treasury Secretary Timothy Geithner for his initial one. Instead, he is settling for an assistant.
http://jlne.ws/h0KDsv
Banks Want Pieces of Fannie-Freddie Pie
By LOUISE STORY, NY Times
As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nation's largest banks are offering a few suggestions. Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities - that would be stamped with a government guarantee.
http://jlne.ws/e6NOVG
Budget Deficit Is Expected to Grow 14% to $1.5 Trillion in Fiscal 2011
By COREY BOLES, WSJ.com
The Congressional Budget Office painted a grim picture of the federal government's finances Wednesday, saying the budget deficit would jump to nearly $1.5 trillion in the current fiscal year, largely because of a tax-cut extension enacted last year.
http://jlne.ws/eBE9f1
DJIA Tops 12000
By JONATHAN CHENG, WSJ.com
The Dow Jones Industrial Average vaulted over 12000 for the first time in almost three years and bounced around that milestone throughout the session, as investors cheered President Obama's State of the Union address and the unanimous decision by the Federal Reserve to stay the course on supporting the economy.
http://jlne.ws/hISn8E
Mortgage Giants Leave Legal Bills to the Taxpayers
By NY Times
Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.
http://jlne.ws/fZUMDB
Muni funds record outflow
By Daniel Bases, Reuters
Municipal bond funds suffered a record outflow of cash in the week ended Jan. 19 while U.S. and European equity funds saw inflows as more cash moved off the sidelines, fund-tracker EPFR Global said on Friday.
http://jlne.ws/fYVJmu
CalPERS says investments grew 12.5% in 2010
Los Angeles Times
The smaller CalSTRS ends the year with a 12.7% return as the nation's two largest public pension funds get back on track after suffering steep losses during the recession. Investment returns at the nation's two largest public pension systems are back on track after suffering steep losses during the Great Recession.
http://jlne.ws/hScXUh
FOMC meeting:
FRB: FOMC statement--January 26, 2011
Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward....
http://jlne.ws/e3MF3i
U.S. Rate Futures: traders pare bets on 2011 Fed hike
Reuters
U.S. short-term interest rate futures traders pared bets that the Federal Reserve will start raising rates this year after the central bank left rates near zero and reiterated its promise to keep them there for an extended period.
http://jlne.ws/fMoRsU
**CN: Futures prices move to dip under a 60 percent chance of an increase in December to the Fed's target rate for overnight lending between banks.
United Fed Stands Pat
By Luca Di Leo And Jeffrey Sparshott, WSJ.com
Federal Reserve officials were united Wednesday in deciding to continue buying government bonds to boost the recovery, even as they acknowledged that the U.S. economy looks in better shape.
http://jlne.ws/hvmqMT
Instant view: Fed lukewarm on economy, jobs
Reuters
The U.S. Federal Reserve gave a lukewarm economic assessment on Wednesday despite recent signs the recovery was strengthening, saying high unemployment still justified its $600 billion bond-buying program.
http://jlne.ws/fyDhP9
Stories from Davos:
A Banker's Plaintive Wail
By Matthew Dalton - WSJ
A plaintive cry from one of the world's top bankers on behalf of his industry pierced through an otherwise tame Thursday morning panel discussion here in Davos:
http://jlne.ws/gxbsHS
Global economy fears ease at Davos forum
By Chris Giles in Davos, Financial Times
Participants at the opening sessions of the World Economic Forum in Davos on Wednesday shrugged off weak UK growth figures and expressed confidence that the global economy is set fair.
http://jlne.ws/ffVAaS
Wall Street Partying in Davos as Bankers Overcome Crisis Angst
Bloomberg
As Wall Street chief executive officers flock to the World Economic Forum, they'll be breathing a sigh of relief along with the Swiss mountain air: There are no panels on compensation or redesigning financial regulation.
http://jlne.ws/fiCEN4
**CN: At $20K just to buy a ticket for this forum, Davos is quite a party.
Davos: finding common ground in a complex world
By Patrick Jenkins - Financial Times
If anyone needed a reminder of the vastness of ambition that underpins the annual Davos meeting of the World Economic Forum, a quick glance at the programme of meetings on day one would do it.
http://jlne.ws/gW4rtv
Events
Making Sense of Credit Default Swaps (CDS), New York
January 26, 2011
Institute for Financial Markets Looks At CDS Market - New York
www.theifm.org
The 36th Annual International Futures Industry Conference
March 15-18, 2011
FIA's Annual Convention - Boca Raton
http://www.futuresindustry.org/boca-2011-program.asp
SIFMA 2nd Annual Private Client Conference
Apr. 7 and 8, 2011
SIFMA's Conference For Private Client Groups At All Levels - New York
http://www.sifma.org/events/event.aspx?id=22289
Exchanges, Clearing Houses & MTFs
NYSE Euronext Bond-Trading Venture To Go Live In March
By Jacob Bunge, Dow Jones Newswires
NYSE Euronext (NYX) aims to launch a new bond-trading effort in March after securing approval from U.S. securities market regulators, according to the exchange company. The Securities and Exchange Commission last week cleared NYSE Euronext to move ahead with a program that will see major brokers and electronic trading firms make a new market in the debt of companies listing shares on NYSE Euronext.
http://jlne.ws/fZnki7
CME Treasury Options To Expire Weekly, Eyes Key Economic Data
WSJ.com
Traders of U.S. interest rate derivatives have a new way to speculate on the release of key economic data and other market-moving events. Beginning Sunday evening, users of CME Group Inc. (CME) trading platforms can buy and sell options on Treasury futures that expire on a weekly basis. Treasury options currently expire only on a monthly basis.
http://jlne.ws/fGJD1x
ICE Surpasses $15 Trillion Milestone in Global CDS Clearing
NEW YORK, Jan. 25, 2011 /PRNewswire/ -- IntercontinentalExchange (NYSE: ICE), a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, announced that its credit default swap (CDS) clearing houses surpassed $15 trillion in cumulative gross notional value and 400,000 transactions during the week ending January 21, 2011.
http://jlne.ws/99Rt1r
Firms & Banks
Break up the big banks, says merger mastermind Mathewson
The Scotsman
Veteran Scottish banker Sir George Mathewson has called for the break-up of the deal that defined his years of leadership at Royal Bank of Scotland and cemented his position a
http://jlne.ws/hsgN8I
Barclays CEO Diamond Says Banking Commission Won't Split Up U.K. Lenders
Bloomberg
Barclays Plc Chief Executive Officer Robert Diamond said John Vickers , chairman of the Independent Commission on Banking, won't recommend splitting up U.K. lenders.
http://jlne.ws/fLDJ9L
Barclays bank to axe 1,000 jobs
Straits Times
LONDON - BRITISH bank Barclays on Wednesday announced plans to axe 1,000 jobs and close its financial planning services unit, while the firm's investment banking division was hit with a 1.12 million pound (S$2.27 million) fine. The company said in a statement that it has entered into talks with employees at its Barclays Financial Planning unit, which offers face-to-face financial planning ...
http://jlne.ws/fiJX5R
Fitch Upgrades Citigroup's Individual Rating and Unsupported IDRs
Business Wire
Fitch Ratings has upgraded the Individual Rating of Citigroup Inc. (Citi) to 'B/C' from 'C'. In addition, Fitch has upgraded Citi's 'unsupported' long- and short-term Issuer Default Ratings (IDRs) to 'A-' and 'F1', respectively, from 'BBB+' and 'F2'. A complete list of ratings follows this release. The upgrades of Citi's unsupported ratings reflect its fundamental ...
http://jlne.ws/f7jyqQ
Treasury sells Citigroup warrants for $312 mln
Market Watch
The Treasury Department announced Wednesday that it sold Citigroup Inc. warrants for $312.2 million. The government sold 255 million A warrants for $1.01 per warrant, compared with a minimum bid of 60 cents set on Monday. The government sold 210 million B warrants priced at 26 cents per warrant, compared with a minimum bid of 15 cents per warrant. The buyers of the ...
http://jlne.ws/gwEzqd
Morgan Stanley sees threat banks could shrink credit
Business Standard India
Banks may shrink credit in order to meet tougher capital requirements, posing a "serious threat" to the real economy, Domenico Siniscalco, Vice President of Morgan Stanley International and country head for Italy, told Reuters.
http://jlne.ws/fAVJEj
Credit Agricole Hires Pao as Fixed Income Head in Thailand
Bloomberg
Credit Agricole CIB hired Pao Chatakanonta as head of fixed income markets for Thailand, according to an e-mailed media release.
http://jlne.ws/f7tXzp
Citigroup Bailout Warrants Will Be Auctioned by U.S.
BusinessWeek
The U.S. Treasury Department announced plans to auction warrants to purchase stock in Citigroup Inc. that taxpayers received as part of the bank's $45 billion rescue during the financial crisis.
http://jlne.ws/f7gv9r
HSBC chief drops Hong Kong move
Channel NewsAsia
HONG KONG: The new chief executive of HSBC has dropped plans to relocate to Hong Kong, where his predecessor was based to push the bank's Asia business, and will stay in London, a report said Tuesday.
http://jlne.ws/f9MYkY
American Express Falls Short With 48% Profit Jump
Forbes
In the fourth quarter of 2010, American Express saw profits shoot higher but not as high as analysts had forecasted.
http://jlne.ws/gs4QmW
Paulson posts more than $1bn in Citi gains
By Sam Jones in London and Dan McCrum in New York - Financial Times
Paulson and Co, the world's third-largest hedge fund manager, has told clients it has made more than $1bn from its stake in Citigroup over the past 18 months and expects US growth to accelerate this year.
http://jlne.ws/edPMRf
JPMorgan Refused Mortgage Repurchases It Also Sought, Ambac Assurance Says
Bloomberg
JPMorgan Chase & Co. demanded that a lender repurchase bad mortgages even as it resisted calls to buy back the loans from bonds created by Bear Stearns Cos., an insurer said in court papers.
http://jlne.ws/e5ADoT
Banks face major shake-up in plans being considered by inquiry
Daily Telegraph
The head of the independent commission examining whether the UK's biggest banks should be broken up warns the industry must prepare for wide-ranging reforms.
http://jlne.ws/gzeBfa
Goldman Sachs Bond Sale Signals Inflation Concerns Waning
Bloomberg
Goldman Sachs Group Inc .'s offering of 30-year bonds, its first in more than three years, signals waning concern among investors that inflation is accelerating.
http://jlne.ws/fHd2r5
UBS Snaps Up Two Impressive Ex-Deutsche Bankers To Run "Turbocharged" Equities Desks
Business Insider
Ricardo Honegger , the new Head of UBS Global Synthetic Equity, previously headed global markets and global banking for the Middle East North Africa region. He was also the chief country officer for the UAE.
http://jlne.ws/eSLk15
Citigroup gives CEO Vikram Pandit a big raise
Straits Times
CITIGROUP Inc is giving its CEO a big raise. The New York-based bank is lifting Vikram Pandit's base salary to US$1.75 million (S$2.25 million) from just US$1 a year effective immediately, according to a filing with the Securities and Exchange Commission on Friday.
http://jlne.ws/hHmZIN
Morgan Stanley Hires Goldman Bond Trader As Global Head Of Rates Unit
Dow Jones
The shuffling at Morgan Stanley (MS) continues, as the firm hired Glenn Hadden, a Goldman Sachs Group Inc. (GS) bond trader, as global head of its interest rates division.
http://jlne.ws/fEDXJS
RBS in talks to exit asset protection scheme
Reuters
Royal Bank of Scotland isin talks with the Treasury about ways in which the partlynationalised bank could leave the government's asset protectionscheme (APS) early, the Financial ...
http://jlne.ws/h3tuFE
Fifth Third raises funds to repay Tarp
By Telis Demos, Financial Times
Fifth Third, a leading Midwestern bank, sold $1.7bn in shares on Thursday to help repay funds the US Treasury lent it during the financial crisis.
http://jlne.ws/hR4wC6
Cantor Prepares to Debut Commercial-Mortgage-Backed Bond Offer
By Sarah Mulholland, Bloomberg
Cantor Fitzgerald LP, the bond broker working to transform itself into a full-service investment bank, is preparing to issue its first securities tied to commercial property loans.
http://jlne.ws/fVy99U
Was Barclays mis-selling? It's hardly a million dollar question
Daily Telegraph
Picture the scene. It's Who Wants To Be A Millionaire the Personal Finance Special, and Chris Tarrant turns to the nervous contestant and asks the following question: "OK, take your time, as there is a lot of money at stake here.
http://jlne.ws/dK0o99
Auctions & Statistics
NYFed_news NY Fed purchases $5.790 bln in Tsy coupons: NY Fed purchases $5.790 bln in Tsy coupons
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.
http://bit.ly/ieb7zN
Fed Buys $8.36 Billin In POMO
By Roger Nachman, Benzinga
The New York Federal Reserve purchased $8.36 billion in U.S. Treasury debt during its permanent open market operations (POMO) today. Dealers submitted $18.959 billion worth of debt, meaning the auction was more than five times oversubscribed, which is much higher than most auctions have been recently. This is something to keep an eye on going forward.
http://jlne.ws/fHfplD
Survey Indicates Inflation Expectation Still Muted
By Michael S. Derby, WSJ.com
U.S. households expect inflation to rise over the short term but remain contained over the longer run, shrugging off higher food and energy prices, in a positive sign for consumer spending patterns, according to a report Friday.
http://jlne.ws/fDdByl
Regulators
Noyer Urges More Flexible Rescue Fund
BY BRIAN BLACKSTONE AND NATHALIE BOSCHAT, WSJ.com
A top European Central Bank official urged euro-zone governments to make their €440 billion ($602 billion) crisis fund more flexible so that it can buy bonds of fiscally distressed governments and offer them short-term credit lines, a signal that the ECB wants to reduce its role in fighting the currency bloc's debt crisis.
http://jlne.ws/hMPtbl
IMF extends Poland $30bn credit line
BBC
The International Monetary Fund (IMF) has approved a two-year, $30bn (£19bn) credit facility with Poland, replacing a one-year arrangement agreed in July.
http://jlne.ws/eMUDUa
Accounting tweak could save Fed from losses
By Pedro Nicolaci da Costa, Reuters
Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.
http://jlne.ws/hHU3QM
Dodd-Frank Swaps Rules Deadline 'Unrealistic', O'Malia says
Bloomberg
The Dodd-Frank Act's "unrealistic" July deadline for rules to govern the swaps market may undermine regulators' efforts to increase transparency and reduce risk, Commodity Futures Trading Commission member Scott O'Malia said in a New York speech.
http://jlne.ws/hO2bJP
China’s Top Banking Regulator May Retire This Year
By Kelvin Wong, Bloomberg
China Banking Regulatory Commission Chairman Liu Mingkang may retire this year and be replaced by a senior executive from one of the country’s four biggest state- controlled banks, Ming Pao reported, citing people it didn’t identify.
http://jlne.ws/h47EaJ
OFT chief John Fingleton: 'more banks doesn't mean more competition'
Daily Telegraph
John Fingleton, chief executive of the Office of Fair Trading, has warned MPs that simply creating more banks will not solve competition problems in UK's financial services sector.
http://jlne.ws/i9BmD5
INTERVIEW-Budgets one way to 'throttle' Dodd-Frank - Garrett
Reuters
The head of a congressional panel that oversees U.S. financial regulation said on Tuesday that budget restraint is just one way Republicans are trying to "throttle" some of the Dodd-Frank banking reforms. U.S. Representative Scott Garrett, the Republican chairman of the House capital markets subcommittee, said he knows Democrats accuse Republicans of trying to throttle Dodd-Frank by restraining the budgets of agencies that must implement it.
http://jlne.ws/ezkDkP
The Dodd-Frank rules you don't know
By TIM KILADZE, Globe and Mail
The Dodd-Frank Act is an omnibus 1,200 page document that cracks down on things like consumer protection and derivatives trading. But many people don't know it also includes over 100 SEC and stock exchange mandates, and these will be implemented very soon.
http://jlne.ws/h5JMJL
**CN: This one's worth a read.
Getting financial regulations right - Crain's column from president and chief executive of SIFMA, Tim Ryan
By Tim Ryan, Crain's
The Dodd-Frank Act, legislation that fundamentally changed our financial system, is just 6 months old, and already regulators have made reasonable progress toward implementing the law. But much work still lies ahead, and 2011 will be a crucial year for the financial industry. Our focus will be to “get it right.” We operate in global financial markets where new rules must be written on a coordinated basis by regulators around the world.
http://jlne.ws/g7dWIH
Core Principles for Effective Deposit Insurance Systems - A methodology for compliance assessment
BIS Release
In June 2009, the International Association of Deposit Insurers (IADI) and the Basel Committee on Banking Supervision (BCBS) issued Core Principles for Effective Deposit Insurance Systems. Since December 2009, IADI has been collaborating with the BCBS, the European Forum of Deposit Insurers (EFDI), the International Monetary Fund (IMF), the World Bank, and the European Commission (EC) to develop a robust methodology to assess compliance with the Core Principles. A consultative document was published in November 2010. A final version incorporating the comments received was submitted to the Financial Stability Board in December 2010.
http://jlne.ws/dV9lph
OTC
DTCC and Markitserv Collaberate with Acadiasoft to Automate Collateral Messaging and Reduce Risk in OTC Derivatives
Press Release
The Depository Trust and Clearing Corporation (DTCC), MarkitSERV and AcadiaSoft today announced that they are working to deliver a joint solution for improving communication related to setting and maintaining the collateral required between counterparties to over-the-counter (OTC) derivative transactions. The solution is the first step taken by the three companies to develop a multi-functional collateral processing platform for the OTC derivative market.
http://jlne.ws/dMI2Yw
Derivatives Executives Are Wary Of Electronic Swaps Trading
By Katy Burne, Of DOW JONES NEWSWIRES
Moving a large portion of privately traded derivatives, or swaps, on to futures exchanges and other regulated execution platforms in accordance with new regulation will take a huge leap of faith from industry participants, panelists at a derivatives conference in New York warned Tuesday.
http://jlne.ws/fGfm19
Morningstar adds OTC Markets Group data to Quotes feed
Press Release
Morningstar (NASDAQ: MORN), a leading provider of independent investment research, today announced that the company has added OTC Markets Group data (previously known as Pink OTC Markets) to its Morningstar Quotes Data Feed.
http://jlne.ws/eaPQ4R
Newedge appointed swap counterparty by Aspect Capital on new UCITS launch
Press Release
Newedge, a global leader in multi-asset brokerage and clearing, announces its appointment by Aspect Capital Limited, as swap counterparty to the Aspect Diversified Trends Fund, a Dublin domiciled UCITs-compliant fund with daily liquidity.
http://jlne.ws/dxcSLk
SunGard’s Stream GMI Supports Eris Exchange Interest Rate Swap Futures
Press Release
SunGard’s Stream GMI post-trade derivatives solution now gives CME Clearing members the ability to use their existing trade capture and bookkeeping processes to clear Eris Exchange’s interest rate swap futures through CME Clearing. Support for OTC interest rate swaps clearing is a key element of SunGard’s strategy to support listed derivatives and the transition of OTC interest rate swap products to the clearinghouse model as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition to Eris Exchange, Stream GMI currently supports OTC interest rate swaps clearing with CME Group, International Derivatives Clearinghouse (IDCH) and LCH.Clearnet UK SwapClear.
http://jlne.ws/fEDzlB
Global News
Euro Zone inflation: The Good, The Bad and The Ugly
By Brian Blackstone, WSJ.com
With euro zone inflation above the ECB’s sub-2% target for the first time in over two years, and ECB officials sending hawkish signals of late, price pressures are being scrutinized more closely than usual in the euro bloc.
http://jlne.ws/fo6mWs
S&P downgrades Japan on debt worries
By Lindsay Whipp and Mure Dickie in Tokyo, Financial Times
Standard & Poor's has cut Japan's sovereign debt rating for the first time since 2002, saying the government lacks a "coherent strategy" for dealing with its soaring state debt.
http://jlne.ws/ebalEC
Kenyan Bank Earnings to Rise 30% in 2010 on Margins, African Alliance Says
Bloomberg
Kenya's banks are poised to increase earnings by an average of 30 percent this year as interest margins widen, African Alliance Securities Kenya Ltd. said.
http://jlne.ws/hzJt2W
China Drops Hint On Forex Policy, May Auger Higher Yuan
By Ian Talley, Automated Trader
China hinted in talks during President Hu Jintao's visit this week that it might be looking more broadly at the rationale for setting the exchange rate. A potential change may augur a higher yuan value.
http://jlne.ws/h6Xzgd
Madrid tells banks to boost core capital
By Victor Mallet in Madrid - Financial Times
Spain will force its weaker savings banks to raise more capital or face nationalisation in an effort to restore confidence in the Spanish economy.
http://jlne.ws/f5VEnd
Big banks losing share to Indie fund groups
By Ruth Sullivan, Financial Times
Big asset managers, particularly those with large banking or insurance parents, have traditionally been the winners in Europe. Economies of scale, distribution networks and plentiful resources have all contributed to their dominance, leaving little space for independent investment houses to compete successfully, especially in Spain, France and Italy where asset management is largely part of banking group activity.
http://jlne.ws/hmvgry
Oversight of banks costs US far more than EU
By Brooke Masters in London - Financial Times
The US spends more than six times as much to supervise banks and other credit institutions as the European Union, research has found.
http://jlne.ws/gnA2Hy
Goldman Downplays Spain Insolvency Fears
RTT News
Spain does not have an underlying solvency problem and the prospect of a default is highly unlikely, Goldman Sachs said on Friday.
http://jlne.ws/hNbESq
Lisbon move points to end of risk-free sovereigns
By Gillian Tett, Financial Times
Another week, another bout of angst about sovereign and municipal risk. But as investors fret about Spain and Belgium - or Illinois and California - they should take a close look at a fascinating little development in Lisbon.
http://jlne.ws/hziCo8
Wema Bank of Nigeria Sells $100 Million of Non-Performing Loans to Amcon
Bloomberg
Wema Bank Plc , a Nigerian lender that failed a central-bank audit in 2009, sold 15.2 billion naira ($100 million) of loans to the state-owned company set up to support the nation's banks, spokesman Tunde Olofintila said.
http://jlne.ws/f4OsRv
Rabu, 26 Januari 2011
Top Interest Rate Headlines 01-26-11: United Fed Stands Pat
United Fed Stands Pat
By Luca Di Leo And Jeffrey Sparshott, WSJ.com
Federal Reserve officials were united Wednesday in deciding to continue buying government bonds to boost the recovery, even as they acknowledged that the U.S. economy looks in better shape.
http://jlne.ws/hvmqMT
Instant view: Fed lukewarm on economy, jobs
Reuters
The U.S. Federal Reserve gave a lukewarm economic assessment on Wednesday despite recent signs the recovery was strengthening, saying high unemployment still justified its $600 billion bond-buying program.
http://jlne.ws/fyDhP9
FRB: FOMC statement--January 26, 2011
Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward....
http://jlne.ws/e3MF3i
DTCC and Markitserv Collaberate with Acadiasoft to Automate Collateral Messaging and Reduce Risk in OTC Derivatives
Press Release
The Depository Trust & Clearing Corporation (DTCC), MarkitSERV and AcadiaSoft today announced that they are working to deliver a joint solution for improving communication related to setting and maintaining the collateral required between counterparties to over-the-counter (OTC) derivative transactions. The solution is the first step taken by the three companies to develop a multi-functional collateral processing platform for the OTC derivative market.
http://jlne.ws/dMI2Yw
Derivatives Executives Are Wary Of Electronic Swaps Trading
By Katy Burne, Of DOW JONES NEWSWIRES
Moving a large portion of privately traded derivatives, or swaps, on to futures exchanges and other regulated execution platforms in accordance with new regulation will take a huge leap of faith from industry participants, panelists at a derivatives conference in New York warned Tuesday.
http://jlne.ws/fGfm19
TARP Profit on Citigroup: $12.3 Billion
BY Tom Barkley, WSJ.com
The U.S. is set to record a net $312.2 million from its sale of its final 465.1 million warrants to purchase common shares of Citigroup Inc., the Treasury Department said Wednesday.
http://jlne.ws/icd8bp
Noyer Urges More Flexible Rescue Fund
BY BRIAN BLACKSTONE AND NATHALIE BOSCHAT, WSJ.com
A top European Central Bank official urged euro-zone governments to make their €440 billion ($602 billion) crisis fund more flexible so that it can buy bonds of fiscally distressed governments and offer them short-term credit lines, a signal that the ECB wants to reduce its role in fighting the currency bloc's debt crisis.
http://jlne.ws/gV1kSf
Budget Deficit Is Expected to Grow 14% to $1.5 Trillion in Fiscal 2011
By COREY BOLES, WSJ.com
The Congressional Budget Office painted a grim picture of the federal government's finances Wednesday, saying the budget deficit would jump to nearly $1.5 trillion in the current fiscal year, largely because of a tax-cut extension enacted last year.
http://jlne.ws/eBE9f1
Cantor Prepares to Debut Commercial-Mortgage-Backed Bond Offer
By Sarah Mulholland, Bloomberg
Cantor Fitzgerald LP, the bond broker working to transform itself into a full-service investment bank, is preparing to issue its first securities tied to commercial property loans.
http://jlne.ws/fVy99U
DJIA Tops 12000
By JONATHAN CHENG, WSJ.com
The Dow Jones Industrial Average vaulted over 12000 for the first time in almost three years and bounced around that milestone throughout the session, as investors cheered President Obama's State of the Union address and the unanimous decision by the Federal Reserve to stay the course on supporting the economy.
http://jlne.ws/hISn8E
Crisis Panel Report Pins Blame on Wall Street, Washington
By Robert Schmidt and Phil Mattingly, Bloomberg
The congressionally appointed panel assigned to probe the origins of the 2008 credit crisis heaped blame on “reckless” Wall Street firms and “weak” federal regulators, concluding the meltdown could have been avoided.
http://jlne.ws/fJg3io
U.S. REP GARRETT SAYS RESTRAINING SEC, CFTC BUDGETS ONLY ONE WAY GOP TRYING TO "THROTTLE" SOME DODD-FRANK REFORMS
17:49 25Jan11 -INTERVIEW-Budgets one way to 'throttle' Dodd-Frank - Garrett
WASHINGTON, Jan 25 (Reuters) - The head of a congressional panel that oversees U.S. financial regulation said on Tuesday that budget restraint is just one way Republicans are trying to "throttle" some of the Dodd-Frank banking reforms. U.S. Representative Scott Garrett, the Republican chairman of the House capital markets subcommittee, said he knows Democrats accuse Republicans of trying to throttle Dodd-Frank by restraining the budgets of agencies that must implement it.
http://jlne.ws/ezkDkP
ICE Surpasses $15 Trillion Milestone in Global CDS Clearing
NEW YORK, Jan. 25, 2011 /PRNewswire/ -- IntercontinentalExchange (NYSE: ICE), a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, announced that its credit default swap (CDS) clearing houses surpassed $15 trillion in cumulative gross notional value and 400,000 transactions during the week ending January 21, 2011.
http://jlne.ws/99Rt1r
Dodd-Frank Swaps Rules Deadline 'Unrealistic', O'Malia says
Bloomberg
The Dodd-Frank Act's "unrealistic" July deadline for rules to govern the swaps market may undermine regulators' efforts to increase transparency and reduce risk, Commodity Futures Trading Commission member Scott O'Malia said in a New York speech.
http://jlne.ws/hO2bJP
Derivatives Executives Are Wary Of Electronic Swaps Trading
By Katy Burne, DOW JONES NEWSWIRES
Moving a large portion of privately traded derivatives, or swaps, on to futures exchanges and other regulated execution platforms in accordance with new regulation will take a huge leap of faith from industry participants, panelists at a derivatives conference in New York warned Tuesday. Swaps are currently executed "over the counter," allowing counterparties to negotiate terms bilaterally. That suits many customers, who want tailored hedges. But global financial regulators want to bring swaps--which were blamed for deepening the financial crisis--into the open so that customers of every stripe, not just the largest users, can get access to the lowest prices available.
http://jlne.ws/f6nmgg
Global economy fears ease at Davos forum
By Chris Giles in Davos, Financial Times
Participants at the opening sessions of the World Economic Forum in Davos on Wednesday shrugged off weak UK growth figures and expressed confidence that the global economy is set fair.
http://jlne.ws/ffVAaS
IMF Sees Europe's Debt as Top Recovery Threat
By MICHAEL R. CRITTENDEN, WSJ.com
European officials need to expand the region's financial rescue fund and subject their banks to more rigorous stress tests to quell a key threat to the global economic recovery, the International Monetary Fund said Tuesday.
http://jlne.ws/fPkpCR
Credit Agricole Hires Pao as Fixed Income Head in Thailand
Bloomberg
Credit Agricole CIB hired Pao Chatakanonta as head of fixed income markets for Thailand, according to an e-mailed media release.
http://jlne.ws/f7tXzp
By Luca Di Leo And Jeffrey Sparshott, WSJ.com
Federal Reserve officials were united Wednesday in deciding to continue buying government bonds to boost the recovery, even as they acknowledged that the U.S. economy looks in better shape.
http://jlne.ws/hvmqMT
Instant view: Fed lukewarm on economy, jobs
Reuters
The U.S. Federal Reserve gave a lukewarm economic assessment on Wednesday despite recent signs the recovery was strengthening, saying high unemployment still justified its $600 billion bond-buying program.
http://jlne.ws/fyDhP9
FRB: FOMC statement--January 26, 2011
Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward....
http://jlne.ws/e3MF3i
DTCC and Markitserv Collaberate with Acadiasoft to Automate Collateral Messaging and Reduce Risk in OTC Derivatives
Press Release
The Depository Trust & Clearing Corporation (DTCC), MarkitSERV and AcadiaSoft today announced that they are working to deliver a joint solution for improving communication related to setting and maintaining the collateral required between counterparties to over-the-counter (OTC) derivative transactions. The solution is the first step taken by the three companies to develop a multi-functional collateral processing platform for the OTC derivative market.
http://jlne.ws/dMI2Yw
Derivatives Executives Are Wary Of Electronic Swaps Trading
By Katy Burne, Of DOW JONES NEWSWIRES
Moving a large portion of privately traded derivatives, or swaps, on to futures exchanges and other regulated execution platforms in accordance with new regulation will take a huge leap of faith from industry participants, panelists at a derivatives conference in New York warned Tuesday.
http://jlne.ws/fGfm19
TARP Profit on Citigroup: $12.3 Billion
BY Tom Barkley, WSJ.com
The U.S. is set to record a net $312.2 million from its sale of its final 465.1 million warrants to purchase common shares of Citigroup Inc., the Treasury Department said Wednesday.
http://jlne.ws/icd8bp
Noyer Urges More Flexible Rescue Fund
BY BRIAN BLACKSTONE AND NATHALIE BOSCHAT, WSJ.com
A top European Central Bank official urged euro-zone governments to make their €440 billion ($602 billion) crisis fund more flexible so that it can buy bonds of fiscally distressed governments and offer them short-term credit lines, a signal that the ECB wants to reduce its role in fighting the currency bloc's debt crisis.
http://jlne.ws/gV1kSf
Budget Deficit Is Expected to Grow 14% to $1.5 Trillion in Fiscal 2011
By COREY BOLES, WSJ.com
The Congressional Budget Office painted a grim picture of the federal government's finances Wednesday, saying the budget deficit would jump to nearly $1.5 trillion in the current fiscal year, largely because of a tax-cut extension enacted last year.
http://jlne.ws/eBE9f1
Cantor Prepares to Debut Commercial-Mortgage-Backed Bond Offer
By Sarah Mulholland, Bloomberg
Cantor Fitzgerald LP, the bond broker working to transform itself into a full-service investment bank, is preparing to issue its first securities tied to commercial property loans.
http://jlne.ws/fVy99U
DJIA Tops 12000
By JONATHAN CHENG, WSJ.com
The Dow Jones Industrial Average vaulted over 12000 for the first time in almost three years and bounced around that milestone throughout the session, as investors cheered President Obama's State of the Union address and the unanimous decision by the Federal Reserve to stay the course on supporting the economy.
http://jlne.ws/hISn8E
Crisis Panel Report Pins Blame on Wall Street, Washington
By Robert Schmidt and Phil Mattingly, Bloomberg
The congressionally appointed panel assigned to probe the origins of the 2008 credit crisis heaped blame on “reckless” Wall Street firms and “weak” federal regulators, concluding the meltdown could have been avoided.
http://jlne.ws/fJg3io
U.S. REP GARRETT SAYS RESTRAINING SEC, CFTC BUDGETS ONLY ONE WAY GOP TRYING TO "THROTTLE" SOME DODD-FRANK REFORMS
17:49 25Jan11 -INTERVIEW-Budgets one way to 'throttle' Dodd-Frank - Garrett
WASHINGTON, Jan 25 (Reuters) - The head of a congressional panel that oversees U.S. financial regulation said on Tuesday that budget restraint is just one way Republicans are trying to "throttle" some of the Dodd-Frank banking reforms. U.S. Representative Scott Garrett, the Republican chairman of the House capital markets subcommittee, said he knows Democrats accuse Republicans of trying to throttle Dodd-Frank by restraining the budgets of agencies that must implement it.
http://jlne.ws/ezkDkP
ICE Surpasses $15 Trillion Milestone in Global CDS Clearing
NEW YORK, Jan. 25, 2011 /PRNewswire/ -- IntercontinentalExchange (NYSE: ICE), a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, announced that its credit default swap (CDS) clearing houses surpassed $15 trillion in cumulative gross notional value and 400,000 transactions during the week ending January 21, 2011.
http://jlne.ws/99Rt1r
Dodd-Frank Swaps Rules Deadline 'Unrealistic', O'Malia says
Bloomberg
The Dodd-Frank Act's "unrealistic" July deadline for rules to govern the swaps market may undermine regulators' efforts to increase transparency and reduce risk, Commodity Futures Trading Commission member Scott O'Malia said in a New York speech.
http://jlne.ws/hO2bJP
Derivatives Executives Are Wary Of Electronic Swaps Trading
By Katy Burne, DOW JONES NEWSWIRES
Moving a large portion of privately traded derivatives, or swaps, on to futures exchanges and other regulated execution platforms in accordance with new regulation will take a huge leap of faith from industry participants, panelists at a derivatives conference in New York warned Tuesday. Swaps are currently executed "over the counter," allowing counterparties to negotiate terms bilaterally. That suits many customers, who want tailored hedges. But global financial regulators want to bring swaps--which were blamed for deepening the financial crisis--into the open so that customers of every stripe, not just the largest users, can get access to the lowest prices available.
http://jlne.ws/f6nmgg
Global economy fears ease at Davos forum
By Chris Giles in Davos, Financial Times
Participants at the opening sessions of the World Economic Forum in Davos on Wednesday shrugged off weak UK growth figures and expressed confidence that the global economy is set fair.
http://jlne.ws/ffVAaS
IMF Sees Europe's Debt as Top Recovery Threat
By MICHAEL R. CRITTENDEN, WSJ.com
European officials need to expand the region's financial rescue fund and subject their banks to more rigorous stress tests to quell a key threat to the global economic recovery, the International Monetary Fund said Tuesday.
http://jlne.ws/fPkpCR
Credit Agricole Hires Pao as Fixed Income Head in Thailand
Bloomberg
Credit Agricole CIB hired Pao Chatakanonta as head of fixed income markets for Thailand, according to an e-mailed media release.
http://jlne.ws/f7tXzp
FRB: FOMC statement - January 26, 2011
Federal Reserve Press Release
Release Date: January 26, 2011
For immediate release
Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Release Date: January 26, 2011
For immediate release
Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Selasa, 25 Januari 2011
Top Interest Rate Headlines 01-25-11: Financial Meltdown Was ‘Avoidable,’ Inquiry Concludes
Financial Meltdown Was ‘Avoidable,’ Inquiry Concludes
By SEWELL CHAN, The New York Times
The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a Congressional inquiry.
http://jlne.ws/esD8T7
Traders Laying Groundwork For New Type Of Credit Derivative
By Katy Burne
A clutch of traders at big investment banks is trying to get a new kind of derivative instrument off the ground that would help them mitigate the risk of a growing correlation between interest rates and risk premiums in the credit markets.
http://jlne.ws/eTj0pW
NYSE Euronext Bond-Trading Venture To Go Live In March
By Jacob Bunge, Dow Jones Newswires
NYSE Euronext (NYX) aims to launch a new bond-trading effort in March after securing approval from U.S. securities market regulators, according to the exchange company. The Securities and Exchange Commission last week cleared NYSE Euronext to move ahead with a program that will see major brokers and electronic trading firms make a new market in the debt of companies listing shares on NYSE Euronext.
http://jlne.ws/fZnki7
Newedge appointed swap counterparty by Aspect Capital on new UCITS launch
Press Release
Newedge, a global leader in multi-asset brokerage and clearing, announces its appointment by Aspect Capital Limited, as swap counterparty to the Aspect Diversified Trends Fund, a Dublin domiciled UCITs-compliant fund with daily liquidity.
http://jlne.ws/dxcSLk
Wall Street Partying in Davos as Bankers Overcome Crisis Angst
Bloomberg
As Wall Street chief executive officers flock to the World Economic Forum, they'll be breathing a sigh of relief along with the Swiss mountain air: There are no panels on compensation or redesigning financial regulation.
http://jlne.ws/fiCEN4
JPMorgan Refused Mortgage Repurchases It Also Sought, Ambac Assurance Says
Bloomberg
JPMorgan Chase & Co. demanded that a lender repurchase bad mortgages even as it resisted calls to buy back the loans from bonds created by Bear Stearns Cos., an insurer said in court papers.
http://jlne.ws/e5ADoT
Citigroup Bailout Warrants Will Be Auctioned by U.S.
BusinessWeek
The U.S. Treasury Department announced plans to auction warrants to purchase stock in Citigroup Inc. that taxpayers received as part of the bank's $45 billion rescue during the financial crisis.
http://jlne.ws/f7gv9r
HSBC chief drops Hong Kong move
Channel NewsAsia
HONG KONG: The new chief executive of HSBC has dropped plans to relocate to Hong Kong, where his predecessor was based to push the bank's Asia business, and will stay in London, a report said Tuesday.
http://jlne.ws/f9MYkY
Madrid tells banks to boost core capital
By Victor Mallet in Madrid - Financial Times
Spain will force its weaker savings banks to raise more capital or face nationalisation in an effort to restore confidence in the Spanish economy.
http://jlne.ws/f5VEnd
American Express Falls Short With 48% Profit Jump
Forbes
In the fourth quarter of 2010, American Express saw profits shoot higher but not as high as analysts had forecasted.
http://jlne.ws/gs4QmW
Paulson posts more than $1bn in Citi gains
By Sam Jones in London and Dan McCrum in New York - Financial Times
Paulson & Co, the world's third-largest hedge fund manager, has told clients it has made more than $1bn from its stake in Citigroup over the past 18 months and expects US growth to accelerate this year.
http://jlne.ws/edPMRf
Morningstar adds OTC Markets Group data to Quotes feed
Press Release
Morningstar (NASDAQ: MORN), a leading provider of independent investment research, today announced that the company has added OTC Markets Group data (previously known as Pink OTC Markets) to its Morningstar Quotes Data Feed.
http://jlne.ws/eaPQ4R
By SEWELL CHAN, The New York Times
The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a Congressional inquiry.
http://jlne.ws/esD8T7
Traders Laying Groundwork For New Type Of Credit Derivative
By Katy Burne
A clutch of traders at big investment banks is trying to get a new kind of derivative instrument off the ground that would help them mitigate the risk of a growing correlation between interest rates and risk premiums in the credit markets.
http://jlne.ws/eTj0pW
NYSE Euronext Bond-Trading Venture To Go Live In March
By Jacob Bunge, Dow Jones Newswires
NYSE Euronext (NYX) aims to launch a new bond-trading effort in March after securing approval from U.S. securities market regulators, according to the exchange company. The Securities and Exchange Commission last week cleared NYSE Euronext to move ahead with a program that will see major brokers and electronic trading firms make a new market in the debt of companies listing shares on NYSE Euronext.
http://jlne.ws/fZnki7
Newedge appointed swap counterparty by Aspect Capital on new UCITS launch
Press Release
Newedge, a global leader in multi-asset brokerage and clearing, announces its appointment by Aspect Capital Limited, as swap counterparty to the Aspect Diversified Trends Fund, a Dublin domiciled UCITs-compliant fund with daily liquidity.
http://jlne.ws/dxcSLk
Wall Street Partying in Davos as Bankers Overcome Crisis Angst
Bloomberg
As Wall Street chief executive officers flock to the World Economic Forum, they'll be breathing a sigh of relief along with the Swiss mountain air: There are no panels on compensation or redesigning financial regulation.
http://jlne.ws/fiCEN4
JPMorgan Refused Mortgage Repurchases It Also Sought, Ambac Assurance Says
Bloomberg
JPMorgan Chase & Co. demanded that a lender repurchase bad mortgages even as it resisted calls to buy back the loans from bonds created by Bear Stearns Cos., an insurer said in court papers.
http://jlne.ws/e5ADoT
Citigroup Bailout Warrants Will Be Auctioned by U.S.
BusinessWeek
The U.S. Treasury Department announced plans to auction warrants to purchase stock in Citigroup Inc. that taxpayers received as part of the bank's $45 billion rescue during the financial crisis.
http://jlne.ws/f7gv9r
HSBC chief drops Hong Kong move
Channel NewsAsia
HONG KONG: The new chief executive of HSBC has dropped plans to relocate to Hong Kong, where his predecessor was based to push the bank's Asia business, and will stay in London, a report said Tuesday.
http://jlne.ws/f9MYkY
Madrid tells banks to boost core capital
By Victor Mallet in Madrid - Financial Times
Spain will force its weaker savings banks to raise more capital or face nationalisation in an effort to restore confidence in the Spanish economy.
http://jlne.ws/f5VEnd
American Express Falls Short With 48% Profit Jump
Forbes
In the fourth quarter of 2010, American Express saw profits shoot higher but not as high as analysts had forecasted.
http://jlne.ws/gs4QmW
Paulson posts more than $1bn in Citi gains
By Sam Jones in London and Dan McCrum in New York - Financial Times
Paulson & Co, the world's third-largest hedge fund manager, has told clients it has made more than $1bn from its stake in Citigroup over the past 18 months and expects US growth to accelerate this year.
http://jlne.ws/edPMRf
Morningstar adds OTC Markets Group data to Quotes feed
Press Release
Morningstar (NASDAQ: MORN), a leading provider of independent investment research, today announced that the company has added OTC Markets Group data (previously known as Pink OTC Markets) to its Morningstar Quotes Data Feed.
http://jlne.ws/eaPQ4R
Newedge appointed swap counterparty by Aspect Capital on new UCITS launch
Press Release
London, January 25th, 2011 - Newedge, a global leader in multi-asset brokerage and clearing, announces its appointment by Aspect Capital Limited, as swap counterparty to the Aspect Diversified Trends Fund, a Dublin domiciled UCITs-compliant fund with daily liquidity.
Newedge Group's UCITS III servicing capability offers comprehensive solutions to fund managers looking to launch regulated products such as UCITS-compliant investment funds. Funds using the Newedge service offering are able to use total return swaps (TRS) to create a synthetic exposure to a financial index, catering specifically for the needs of liquid systematic CTA & Global Macro investment strategies. This is in addition to the extensive synthetic prime brokerage services already offered by Newedge to UCITS fund structures in the equity long-short space.
By using an open-architecture approach to working with other service providers, including administrators and custodians, Newedge provides its clients with the maximum flexibility to structure products to suit their business model.
Andrew Dollery, Origination & Structuring for UCITS Funds at Newedge said, “The functionality of the Newedge UCITS III service offering is a significant advantage in providing innovation and value added services to fund managers who are looking to diversify their product range and investor base. Working with leading fund managers specialized in alternative investment strategies such as Aspect Capital Management is further validation that our strategy is adding value to managers seeking to offer UCITS investment solutions.”
About Newedge Group
Newedge, a 50/50 joint venture between Société Générale and Crédit Agricole CIB, is a major force in global multi-asset brokerage business and amongst the world leaders in the execution and clearing of listed derivative products. With a presence in more than 20 locations in 17 countries, Newedge offers a full range of clearing and execution services covering options and futures contracts for financial products and commodities, as well as for money market instruments, bonds, FX, equities, and commodities on OTC markets. Newedge provides a range of value added services, including prime brokerage, asset financing, an electronic platform for trading and order routing, cross margining, and the centralized reporting of client portfolios. Newedge, which primarily serves institutional clients, provides access to more than 85 exchanges. Newedge’s 2,800+ employees form a close-knit, multinational team that can innovatively respond to its clients in fast-moving markets. For more information, visit www.newedge.com (012511N02)
London, January 25th, 2011 - Newedge, a global leader in multi-asset brokerage and clearing, announces its appointment by Aspect Capital Limited, as swap counterparty to the Aspect Diversified Trends Fund, a Dublin domiciled UCITs-compliant fund with daily liquidity.
Newedge Group's UCITS III servicing capability offers comprehensive solutions to fund managers looking to launch regulated products such as UCITS-compliant investment funds. Funds using the Newedge service offering are able to use total return swaps (TRS) to create a synthetic exposure to a financial index, catering specifically for the needs of liquid systematic CTA & Global Macro investment strategies. This is in addition to the extensive synthetic prime brokerage services already offered by Newedge to UCITS fund structures in the equity long-short space.
By using an open-architecture approach to working with other service providers, including administrators and custodians, Newedge provides its clients with the maximum flexibility to structure products to suit their business model.
Andrew Dollery, Origination & Structuring for UCITS Funds at Newedge said, “The functionality of the Newedge UCITS III service offering is a significant advantage in providing innovation and value added services to fund managers who are looking to diversify their product range and investor base. Working with leading fund managers specialized in alternative investment strategies such as Aspect Capital Management is further validation that our strategy is adding value to managers seeking to offer UCITS investment solutions.”
About Newedge Group
Newedge, a 50/50 joint venture between Société Générale and Crédit Agricole CIB, is a major force in global multi-asset brokerage business and amongst the world leaders in the execution and clearing of listed derivative products. With a presence in more than 20 locations in 17 countries, Newedge offers a full range of clearing and execution services covering options and futures contracts for financial products and commodities, as well as for money market instruments, bonds, FX, equities, and commodities on OTC markets. Newedge provides a range of value added services, including prime brokerage, asset financing, an electronic platform for trading and order routing, cross margining, and the centralized reporting of client portfolios. Newedge, which primarily serves institutional clients, provides access to more than 85 exchanges. Newedge’s 2,800+ employees form a close-knit, multinational team that can innovatively respond to its clients in fast-moving markets. For more information, visit www.newedge.com (012511N02)
Senin, 24 Januari 2011
Top Interest Rate Headlines 01-24-11: CME Treasury Options To Expire Weekly
CME Treasury Options To Expire Weekly, Eyes Key Economic Data
WSJ.com
Traders of U.S. interest rate derivatives have a new way to speculate on the release of key economic data and other market-moving events. Beginning Sunday evening, users of CME Group Inc. (CME) trading platforms can buy and sell options on Treasury futures that expire on a weekly basis. Treasury options currently expire only on a monthly basis.
http://jlne.ws/fGJD1x
Getting financial regulations right - Crain's column from president and chief executive of SIFMA, Tim Ryan
By Tim Ryan, Crain's
The Dodd-Frank Act, legislation that fundamentally changed our financial system, is just 6 months old, and already regulators have made reasonable progress toward implementing the law. But much work still lies ahead, and 2011 will be a crucial year for the financial industry. Our focus will be to “get it right.” We operate in global financial markets where new rules must be written on a coordinated basis by regulators around the world.
http://jlne.ws/g7dWIH
SunGard’s Stream GMI Supports Eris Exchange Interest Rate Swap Futures
Press Release
SunGard’s Stream GMI post-trade derivatives solution now gives CME Clearing members the ability to use their existing trade capture and bookkeeping processes to clear Eris Exchange’s interest rate swap futures through CME Clearing. Support for OTC interest rate swaps clearing is a key element of SunGard’s strategy to support listed derivatives and the transition of OTC interest rate swap products to the clearinghouse model as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition to Eris Exchange, Stream GMI currently supports OTC interest rate swaps clearing with CME Group, International Derivatives Clearinghouse (IDCH) and LCH.Clearnet UK SwapClear.
http://jlne.ws/fEDzlB
Survey Indicates Inflation Expectation Still Muted
By Michael S. Derby, WSJ.com
U.S. households expect inflation to rise over the short term but remain contained over the longer run, shrugging off higher food and energy prices, in a positive sign for consumer spending patterns, according to a report Friday.
http://jlne.ws/fDdByl
Sarkozy: No Desire To Question Global Role Of US Dlr
iMarketNews.com
By calling for a reform of the world monetary system, France has no intention of calling into question the role of the U.S. dollar, French President Nicolas Sarkozy said Monday. Sarkozy, speaking at a press conference at the Elysee Palace, spelled out France's ambitious agenda for tackling global financial instability, growing payments imbalances and the institutional monetary order.
http://jlne.ws/f17UC8
Banks face major shake-up in plans being considered by inquiry
Daily Telegraph
The head of the independent commission examining whether the UK's biggest banks should be broken up warns the industry must prepare for wide-ranging reforms.
http://jlne.ws/gzeBfa
Davos: finding common ground in a complex world
By Patrick Jenkins - Financial Times
If anyone needed a reminder of the vastness of ambition that underpins the annual Davos meeting of the World Economic Forum, a quick glance at the programme of meetings on day one would do it.
http://jlne.ws/gW4rtv
Big banks losing share to Indie fund groups
By Ruth Sullivan, Financial Times
Big asset managers, particularly those with large banking or insurance parents, have traditionally been the winners in Europe. Economies of scale, distribution networks and plentiful resources have all contributed to their dominance, leaving little space for independent investment houses to compete successfully, especially in Spain, France and Italy where asset management is largely part of banking group activity.
http://jlne.ws/hmvgry
Oversight of banks costs US far more than EU
By Brooke Masters in London - Financial Times
The US spends more than six times as much to supervise banks and other credit institutions as the European Union, research has found.
http://jlne.ws/gnA2Hy
The Dodd-Frank rules you don't know
TIM KILADZE - Globe and Mail
The Dodd-Frank Act is an omnibus 1,200 page document that cracks down on things like consumer protection and derivatives trading. But many people don't know it also includes over 100 SEC and stock exchange mandates, and these will be implemented very soon.
http://jlne.ws/h5JMJL
Goldman Sachs Bond Sale Signals Inflation Concerns Waning: Credit Markets
Bloomberg
Goldman Sachs Group Inc .'s offering of 30-year bonds, its first in more than three years, signals waning concern among investors that inflation is accelerating.
http://jlne.ws/fHd2r5
UBS Snaps Up Two Impressive Ex-Deutsche Bankers To Run "Turbocharged" Equities Desks
Business Insider
Ricardo Honegger , the new Head of UBS Global Synthetic Equity, previously headed global markets and global banking for the Middle East North Africa region. He was also the chief country officer for the UAE.
http://jlne.ws/eSLk15
Barclays to unveil radical pay overhaul
By Patrick Jenkins and Megan Murphy in London - Financial Times
Bob Diamond will stamp his authority on Barclays next month, when the incoming chief executive announces a radical overhaul of the way it pays its top bankers as part of a broader strategic review that could see the group shed staff and put increased pressure on underperforming businesses.
http://jlne.ws/gpSlDp
Citigroup gives CEO Vikram Pandit a big raise
Straits Times
NEW YORK - CITIGROUP Inc is giving its CEO a big raise. The New York-based bank is lifting Vikram Pandit's base salary to US$1.75 million (S$2.25 million) from just US$1 a year effective immediately, according to a filing with the Securities and Exchange Commission on Friday.
http://jlne.ws/hHmZIN
Was Barclays mis-selling? It's hardly a million dollar question
Daily Telegraph
Picture the scene. It's Who Wants To Be A Millionaire the Personal Finance Special, and Chris Tarrant turns to the nervous contestant and asks the following question: "OK, take your time, as there is a lot of money at stake here.
http://jlne.ws/dK0o99
Mortgage Giants Leave Legal Bills to the Taxpayers
By NY Times
Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.
http://jlne.ws/fZUMDB
Kenyan Bank Earnings to Rise 30% in 2010 on Margins, African Alliance Says
Bloomberg
Kenya's banks are poised to increase earnings by an average of 30 percent this year as interest margins widen, African Alliance Securities Kenya Ltd. said.
http://jlne.ws/hzJt2W
WSJ.com
Traders of U.S. interest rate derivatives have a new way to speculate on the release of key economic data and other market-moving events. Beginning Sunday evening, users of CME Group Inc. (CME) trading platforms can buy and sell options on Treasury futures that expire on a weekly basis. Treasury options currently expire only on a monthly basis.
http://jlne.ws/fGJD1x
Getting financial regulations right - Crain's column from president and chief executive of SIFMA, Tim Ryan
By Tim Ryan, Crain's
The Dodd-Frank Act, legislation that fundamentally changed our financial system, is just 6 months old, and already regulators have made reasonable progress toward implementing the law. But much work still lies ahead, and 2011 will be a crucial year for the financial industry. Our focus will be to “get it right.” We operate in global financial markets where new rules must be written on a coordinated basis by regulators around the world.
http://jlne.ws/g7dWIH
SunGard’s Stream GMI Supports Eris Exchange Interest Rate Swap Futures
Press Release
SunGard’s Stream GMI post-trade derivatives solution now gives CME Clearing members the ability to use their existing trade capture and bookkeeping processes to clear Eris Exchange’s interest rate swap futures through CME Clearing. Support for OTC interest rate swaps clearing is a key element of SunGard’s strategy to support listed derivatives and the transition of OTC interest rate swap products to the clearinghouse model as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition to Eris Exchange, Stream GMI currently supports OTC interest rate swaps clearing with CME Group, International Derivatives Clearinghouse (IDCH) and LCH.Clearnet UK SwapClear.
http://jlne.ws/fEDzlB
Survey Indicates Inflation Expectation Still Muted
By Michael S. Derby, WSJ.com
U.S. households expect inflation to rise over the short term but remain contained over the longer run, shrugging off higher food and energy prices, in a positive sign for consumer spending patterns, according to a report Friday.
http://jlne.ws/fDdByl
Sarkozy: No Desire To Question Global Role Of US Dlr
iMarketNews.com
By calling for a reform of the world monetary system, France has no intention of calling into question the role of the U.S. dollar, French President Nicolas Sarkozy said Monday. Sarkozy, speaking at a press conference at the Elysee Palace, spelled out France's ambitious agenda for tackling global financial instability, growing payments imbalances and the institutional monetary order.
http://jlne.ws/f17UC8
Banks face major shake-up in plans being considered by inquiry
Daily Telegraph
The head of the independent commission examining whether the UK's biggest banks should be broken up warns the industry must prepare for wide-ranging reforms.
http://jlne.ws/gzeBfa
Davos: finding common ground in a complex world
By Patrick Jenkins - Financial Times
If anyone needed a reminder of the vastness of ambition that underpins the annual Davos meeting of the World Economic Forum, a quick glance at the programme of meetings on day one would do it.
http://jlne.ws/gW4rtv
Big banks losing share to Indie fund groups
By Ruth Sullivan, Financial Times
Big asset managers, particularly those with large banking or insurance parents, have traditionally been the winners in Europe. Economies of scale, distribution networks and plentiful resources have all contributed to their dominance, leaving little space for independent investment houses to compete successfully, especially in Spain, France and Italy where asset management is largely part of banking group activity.
http://jlne.ws/hmvgry
Oversight of banks costs US far more than EU
By Brooke Masters in London - Financial Times
The US spends more than six times as much to supervise banks and other credit institutions as the European Union, research has found.
http://jlne.ws/gnA2Hy
The Dodd-Frank rules you don't know
TIM KILADZE - Globe and Mail
The Dodd-Frank Act is an omnibus 1,200 page document that cracks down on things like consumer protection and derivatives trading. But many people don't know it also includes over 100 SEC and stock exchange mandates, and these will be implemented very soon.
http://jlne.ws/h5JMJL
Goldman Sachs Bond Sale Signals Inflation Concerns Waning: Credit Markets
Bloomberg
Goldman Sachs Group Inc .'s offering of 30-year bonds, its first in more than three years, signals waning concern among investors that inflation is accelerating.
http://jlne.ws/fHd2r5
UBS Snaps Up Two Impressive Ex-Deutsche Bankers To Run "Turbocharged" Equities Desks
Business Insider
Ricardo Honegger , the new Head of UBS Global Synthetic Equity, previously headed global markets and global banking for the Middle East North Africa region. He was also the chief country officer for the UAE.
http://jlne.ws/eSLk15
Barclays to unveil radical pay overhaul
By Patrick Jenkins and Megan Murphy in London - Financial Times
Bob Diamond will stamp his authority on Barclays next month, when the incoming chief executive announces a radical overhaul of the way it pays its top bankers as part of a broader strategic review that could see the group shed staff and put increased pressure on underperforming businesses.
http://jlne.ws/gpSlDp
Citigroup gives CEO Vikram Pandit a big raise
Straits Times
NEW YORK - CITIGROUP Inc is giving its CEO a big raise. The New York-based bank is lifting Vikram Pandit's base salary to US$1.75 million (S$2.25 million) from just US$1 a year effective immediately, according to a filing with the Securities and Exchange Commission on Friday.
http://jlne.ws/hHmZIN
Was Barclays mis-selling? It's hardly a million dollar question
Daily Telegraph
Picture the scene. It's Who Wants To Be A Millionaire the Personal Finance Special, and Chris Tarrant turns to the nervous contestant and asks the following question: "OK, take your time, as there is a lot of money at stake here.
http://jlne.ws/dK0o99
Mortgage Giants Leave Legal Bills to the Taxpayers
By NY Times
Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.
http://jlne.ws/fZUMDB
Kenyan Bank Earnings to Rise 30% in 2010 on Margins, African Alliance Says
Bloomberg
Kenya's banks are poised to increase earnings by an average of 30 percent this year as interest margins widen, African Alliance Securities Kenya Ltd. said.
http://jlne.ws/hzJt2W
SunGard’s Stream GMI To Support Eris Exchange Interest Rate Swap Futures
January 24, 2011 — Chicago, IL
SunGard’s Stream GMI post-trade derivatives solution now gives CME Clearing members the ability to use their existing trade capture and bookkeeping processes to clear Eris Exchange’s interest rate swap futures through CME Clearing. Support for OTC interest rate swaps clearing is a key element of SunGard’s strategy to support listed derivatives and the transition of OTC interest rate swap products to the clearinghouse model as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition to Eris Exchange, Stream GMI currently supports OTC interest rate swaps clearing with CME Group, International Derivatives Clearinghouse (IDCH) and LCH.Clearnet UK SwapClear.
Eris Exchange has traded more than $18 billion in notional value for interest rate swap futures since the first trading activity in August 2010. Eris Exchange interest rate swap futures are eligible to be cleared by any of the more than 50 Class A CME Clearing member firms with more than $50 million in net adjusted capital, without requiring firms to contribute capital to a segregated guarantee pool.
In addition to providing processing and accounting support through Stream GMI, SunGard is also developing financial and regulatory reporting capabilities for cleared interest rate swaps within its StreamCore data management and technology framework, as well as enhancing its Stream Credit Monitor credit management and margin monitoring solution to support new margin methodologies.
Neal Brady, chief executive officer of Eris Exchange, said, "The capability of Eris Exchange’s interest rates swap futures to clear seamlessly through the existing infrastructure of CME Clearing members is a critical component of our service offerings. Coupled with the time-tested backing of the CME Clearing guarantee fund that has current safeguards exceeding $8 billion, the integrated support from SunGard’s Stream GMI helps set Eris Exchange interest rate swap futures apart from alternative offerings."
Tony Scianna, executive vice president of SunGard's position, risk and operations business, said, “As US-based market participants look for solutions to respond to the regulatory mandate for central clearing of interest rate swaps, they need the ability to process and clear OTC interest rate instruments efficiently and cost effectively to meet the July 2011 regulatory deadline. Stream GMI’s support for Eris Exchange interest rate swap futures is the latest example of the successful execution of SunGard’s post-trade strategy in providing clearance and settlement support for the new cleared interest rate swap marketplace."
About Eris Exchange
Eris Exchange is a futures exchange that is an Exempt Board of Trade subject to the CFTC’s jurisdiction. Formed by a group of Chicago-based proprietary trading firms to increase access to traditional OTC markets that are migrating to centrally-cleared trading venues as a result of recent US financial regulation, Eris Exchange has traded more than $18 billion in notional value of Eris Interest Rate Swap Futures since the first trades in August 2010. Eris Exchange contracts are cleared by CME Clearing, the nation’s leading clearing house, with whom Eris Exchange has signed a long-term clearing services agreement. For more information, visit www.erisfutures.com.
About SunGard’s Stream GMI
A clearing and accounting system for global exchange-traded derivatives, futures and options, Stream GMI supports the activities of clearing firms, securities firms, brokerage houses, and other participants in derivatives trading, such as multi-national agriculture and energy companies. Stream GMI links to exchanges worldwide for access to pricing updates, margins and risk arrays. Customers use Stream GMI to help eliminate manual processes and consolidate data in a single integrated accounting system, control costs and increase competitiveness.
About SunGard
SunGard is one of the world's leading software and technology services companies. SunGard has more than 20,000 employees and serves 25,000 customers in 70 countries. SunGard provides software and processing solutions for financial services, higher education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue exceeding $5 billion, SunGard is ranked 380 on the Fortune 500 and is the largest privately held business software and IT services company. For more information, visit www.sungard.com.
Trademark Information: SunGard, the SunGard logo, StreamCore, Stream Credit Monitor and Stream GMI are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.
SunGard’s Stream GMI post-trade derivatives solution now gives CME Clearing members the ability to use their existing trade capture and bookkeeping processes to clear Eris Exchange’s interest rate swap futures through CME Clearing. Support for OTC interest rate swaps clearing is a key element of SunGard’s strategy to support listed derivatives and the transition of OTC interest rate swap products to the clearinghouse model as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition to Eris Exchange, Stream GMI currently supports OTC interest rate swaps clearing with CME Group, International Derivatives Clearinghouse (IDCH) and LCH.Clearnet UK SwapClear.
Eris Exchange has traded more than $18 billion in notional value for interest rate swap futures since the first trading activity in August 2010. Eris Exchange interest rate swap futures are eligible to be cleared by any of the more than 50 Class A CME Clearing member firms with more than $50 million in net adjusted capital, without requiring firms to contribute capital to a segregated guarantee pool.
In addition to providing processing and accounting support through Stream GMI, SunGard is also developing financial and regulatory reporting capabilities for cleared interest rate swaps within its StreamCore data management and technology framework, as well as enhancing its Stream Credit Monitor credit management and margin monitoring solution to support new margin methodologies.
Neal Brady, chief executive officer of Eris Exchange, said, "The capability of Eris Exchange’s interest rates swap futures to clear seamlessly through the existing infrastructure of CME Clearing members is a critical component of our service offerings. Coupled with the time-tested backing of the CME Clearing guarantee fund that has current safeguards exceeding $8 billion, the integrated support from SunGard’s Stream GMI helps set Eris Exchange interest rate swap futures apart from alternative offerings."
Tony Scianna, executive vice president of SunGard's position, risk and operations business, said, “As US-based market participants look for solutions to respond to the regulatory mandate for central clearing of interest rate swaps, they need the ability to process and clear OTC interest rate instruments efficiently and cost effectively to meet the July 2011 regulatory deadline. Stream GMI’s support for Eris Exchange interest rate swap futures is the latest example of the successful execution of SunGard’s post-trade strategy in providing clearance and settlement support for the new cleared interest rate swap marketplace."
About Eris Exchange
Eris Exchange is a futures exchange that is an Exempt Board of Trade subject to the CFTC’s jurisdiction. Formed by a group of Chicago-based proprietary trading firms to increase access to traditional OTC markets that are migrating to centrally-cleared trading venues as a result of recent US financial regulation, Eris Exchange has traded more than $18 billion in notional value of Eris Interest Rate Swap Futures since the first trades in August 2010. Eris Exchange contracts are cleared by CME Clearing, the nation’s leading clearing house, with whom Eris Exchange has signed a long-term clearing services agreement. For more information, visit www.erisfutures.com.
About SunGard’s Stream GMI
A clearing and accounting system for global exchange-traded derivatives, futures and options, Stream GMI supports the activities of clearing firms, securities firms, brokerage houses, and other participants in derivatives trading, such as multi-national agriculture and energy companies. Stream GMI links to exchanges worldwide for access to pricing updates, margins and risk arrays. Customers use Stream GMI to help eliminate manual processes and consolidate data in a single integrated accounting system, control costs and increase competitiveness.
About SunGard
SunGard is one of the world's leading software and technology services companies. SunGard has more than 20,000 employees and serves 25,000 customers in 70 countries. SunGard provides software and processing solutions for financial services, higher education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue exceeding $5 billion, SunGard is ranked 380 on the Fortune 500 and is the largest privately held business software and IT services company. For more information, visit www.sungard.com.
Trademark Information: SunGard, the SunGard logo, StreamCore, Stream Credit Monitor and Stream GMI are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.
Jumat, 21 Januari 2011
Top Interest Rate Headlines 01-21-11: Muni Funds Record Outflow
Muni funds record outflow
By Daniel Bases, Reuters
Municipal bond funds suffered a record outflow of cash in the week ended Jan. 19 while U.S. and European equity funds saw inflows as more cash moved off the sidelines, fund-tracker EPFR Global said on Friday.
http://jlne.ws/fYVJmu
Accounting tweak could save Fed from losses
By Pedro Nicolaci da Costa, Reuters
Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.
http://jlne.ws/hHU3QM
IMF extends Poland $30bn credit line
BBC
The International Monetary Fund (IMF) has approved a two-year, $30bn (£19bn) credit facility with Poland, replacing a one-year arrangement agreed in July.
http://jlne.ws/eMUDUa
China’s Top Banking Regulator May Retire This Year
By Kelvin Wong, Bloomberg
China Banking Regulatory Commission Chairman Liu Mingkang may retire this year and be replaced by a senior executive from one of the country’s four biggest state- controlled banks, Ming Pao reported, citing people it didn’t identify.
http://jlne.ws/h47EaJ
Fed Buys $8.36 Billin In POMO
By Roger Nachman, Benzinga
The New York Federal Reserve purchased $8.36 billion in U.S. Treasury debt during its permanent open market operations (POMO) today. Dealers submitted $18.959 billion worth of debt, meaning the auction was more than five times oversubscribed, which is much higher than most auctions have been recently. This is something to keep an eye on going forward.
http://jlne.ws/fHfplD
China Drops Hint On Forex Policy, May Auger Higher Yuan
By Ian Talley, Automated Trader
China hinted in talks during President Hu Jintao's visit this week that it might be looking more broadly at the rationale for setting the exchange rate. A potential change may augur a higher yuan value.
http://jlne.ws/h6Xzgd
Issa Asks for Geithner, Settles for Assistant for First Oversight Hearing
Bloomberg
U.S. House Oversight and Government Reform Committee Chairman Darrell Issa , who has said he will hold hundreds of hearings to challenge the Obama administration, tried to get Treasury Secretary Timothy Geithner for his initial one. Instead, he is settling for an assistant.
http://jlne.ws/h0KDsv
Volcker Out, Immelt In on Economic Board
By SHERYL GAY STOLBERG and ANAHAD O'CONNOR, NY Times
SCHENECTADY, N.Y. - President Obama will name Jeffrey R. Immelt, the chief executive officer and chairman of General Electric, on Friday to run his outside panel of economic advisers, replacing Paul A. Volcker, the former Federal Reserve chairman, who is stepping down, the White House said.
http://jlne.ws/eEvxDs
Banks Want Pieces of Fannie-Freddie Pie
By LOUISE STORY - NY Times
As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nation's largest banks are offering a few suggestions. Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities - that would be stamped with a government guarantee.
http://jlne.ws/e6NOVG
Lisbon move points to end of risk-free sovereigns
By Gillian Tett - Financial Times
Another week, another bout of angst about sovereign and municipal risk. But as investors fret about Spain and Belgium - or Illinois and California - they should take a close look at a fascinating little development in Lisbon.
http://jlne.ws/hziCo8
Goldman Downplays Spain Insolvency Fears
RTT News
Spain does not have an underlying solvency problem and the prospect of a default is highly unlikely, Goldman Sachs said on Friday.
http://jlne.ws/hNbESq
OFT chief John Fingleton: 'more banks doesn't mean more competition'
Daily Telegraph
John Fingleton, chief executive of the Office of Fair Trading, has warned MPs that simply creating more banks will not solve competition problems in UK's financial services sector.
http://jlne.ws/i9BmD5
Morgan Stanley Hires Goldman Bond Trader As Global Head Of Rates Unit
Dow Jones
NEW YORK -(Dow Jones)- The shuffling at Morgan Stanley (MS) continues, as the firm hired Glenn Hadden, a Goldman Sachs Group Inc. (GS) bond trader, as global head of its interest rates division.
http://jlne.ws/fEDXJS
RBS in talks to exit asset protection scheme
FT
Reuters UK Focus via Yahoo! UK & Ireland Finance
LONDON, Jan 20 (Reuters) - Royal Bank of Scotland isin talks with the Treasury about ways in which the partlynationalised bank could leave the government's asset protectionscheme (APS) early, the Financial ...
http://jlne.ws/h3tuFE
HSBC cuts 500 U.S. jobs, pares credit card work
Reuters HSBC Holdings Plc is laying off about 500 employees as it ends credit card customer service and c
ollections work at a center in New Castle, Delaware.
http://jlne.ws/g7DPKj
Fifth Third raises funds to repay Tarp
By Telis Demos in New York - Financial Times
Fifth Third, a leading Midwestern bank, sold $1.7bn in shares on Thursday to help repay funds the US Treasury lent it during the financial crisis.
http://jlne.ws/hR4wC6
CalPERS says investments grew 12.5% in 2010
Los Angeles Times
The smaller CalSTRS ends the year with a 12.7% return as the nation's two largest public pension funds get back on track after suffering steep losses during the recession. Investment returns at the nation's two largest public pension systems are back on track after suffering steep losses during the Great Recession.
http://jlne.ws/hScXUh
Wema Bank of Nigeria Sells $100 Million of Non-Performing Loans to Amcon
Bloomberg
Wema Bank Plc , a Nigerian lender that failed a central-bank audit in 2009, sold 15.2 billion naira ($100 million) of loans to the state-owned company set up to support the nation's banks, spokesman Tunde Olofintila said.
http://jlne.ws/f4OsRv
By Daniel Bases, Reuters
Municipal bond funds suffered a record outflow of cash in the week ended Jan. 19 while U.S. and European equity funds saw inflows as more cash moved off the sidelines, fund-tracker EPFR Global said on Friday.
http://jlne.ws/fYVJmu
Accounting tweak could save Fed from losses
By Pedro Nicolaci da Costa, Reuters
Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.
http://jlne.ws/hHU3QM
IMF extends Poland $30bn credit line
BBC
The International Monetary Fund (IMF) has approved a two-year, $30bn (£19bn) credit facility with Poland, replacing a one-year arrangement agreed in July.
http://jlne.ws/eMUDUa
China’s Top Banking Regulator May Retire This Year
By Kelvin Wong, Bloomberg
China Banking Regulatory Commission Chairman Liu Mingkang may retire this year and be replaced by a senior executive from one of the country’s four biggest state- controlled banks, Ming Pao reported, citing people it didn’t identify.
http://jlne.ws/h47EaJ
Fed Buys $8.36 Billin In POMO
By Roger Nachman, Benzinga
The New York Federal Reserve purchased $8.36 billion in U.S. Treasury debt during its permanent open market operations (POMO) today. Dealers submitted $18.959 billion worth of debt, meaning the auction was more than five times oversubscribed, which is much higher than most auctions have been recently. This is something to keep an eye on going forward.
http://jlne.ws/fHfplD
China Drops Hint On Forex Policy, May Auger Higher Yuan
By Ian Talley, Automated Trader
China hinted in talks during President Hu Jintao's visit this week that it might be looking more broadly at the rationale for setting the exchange rate. A potential change may augur a higher yuan value.
http://jlne.ws/h6Xzgd
Issa Asks for Geithner, Settles for Assistant for First Oversight Hearing
Bloomberg
U.S. House Oversight and Government Reform Committee Chairman Darrell Issa , who has said he will hold hundreds of hearings to challenge the Obama administration, tried to get Treasury Secretary Timothy Geithner for his initial one. Instead, he is settling for an assistant.
http://jlne.ws/h0KDsv
Volcker Out, Immelt In on Economic Board
By SHERYL GAY STOLBERG and ANAHAD O'CONNOR, NY Times
SCHENECTADY, N.Y. - President Obama will name Jeffrey R. Immelt, the chief executive officer and chairman of General Electric, on Friday to run his outside panel of economic advisers, replacing Paul A. Volcker, the former Federal Reserve chairman, who is stepping down, the White House said.
http://jlne.ws/eEvxDs
Banks Want Pieces of Fannie-Freddie Pie
By LOUISE STORY - NY Times
As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nation's largest banks are offering a few suggestions. Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities - that would be stamped with a government guarantee.
http://jlne.ws/e6NOVG
Lisbon move points to end of risk-free sovereigns
By Gillian Tett - Financial Times
Another week, another bout of angst about sovereign and municipal risk. But as investors fret about Spain and Belgium - or Illinois and California - they should take a close look at a fascinating little development in Lisbon.
http://jlne.ws/hziCo8
Goldman Downplays Spain Insolvency Fears
RTT News
Spain does not have an underlying solvency problem and the prospect of a default is highly unlikely, Goldman Sachs said on Friday.
http://jlne.ws/hNbESq
OFT chief John Fingleton: 'more banks doesn't mean more competition'
Daily Telegraph
John Fingleton, chief executive of the Office of Fair Trading, has warned MPs that simply creating more banks will not solve competition problems in UK's financial services sector.
http://jlne.ws/i9BmD5
Morgan Stanley Hires Goldman Bond Trader As Global Head Of Rates Unit
Dow Jones
NEW YORK -(Dow Jones)- The shuffling at Morgan Stanley (MS) continues, as the firm hired Glenn Hadden, a Goldman Sachs Group Inc. (GS) bond trader, as global head of its interest rates division.
http://jlne.ws/fEDXJS
RBS in talks to exit asset protection scheme
FT
Reuters UK Focus via Yahoo! UK & Ireland Finance
LONDON, Jan 20 (Reuters) - Royal Bank of Scotland isin talks with the Treasury about ways in which the partlynationalised bank could leave the government's asset protectionscheme (APS) early, the Financial ...
http://jlne.ws/h3tuFE
HSBC cuts 500 U.S. jobs, pares credit card work
Reuters HSBC Holdings Plc is laying off about 500 employees as it ends credit card customer service and c
ollections work at a center in New Castle, Delaware.
http://jlne.ws/g7DPKj
Fifth Third raises funds to repay Tarp
By Telis Demos in New York - Financial Times
Fifth Third, a leading Midwestern bank, sold $1.7bn in shares on Thursday to help repay funds the US Treasury lent it during the financial crisis.
http://jlne.ws/hR4wC6
CalPERS says investments grew 12.5% in 2010
Los Angeles Times
The smaller CalSTRS ends the year with a 12.7% return as the nation's two largest public pension funds get back on track after suffering steep losses during the recession. Investment returns at the nation's two largest public pension systems are back on track after suffering steep losses during the Great Recession.
http://jlne.ws/hScXUh
Wema Bank of Nigeria Sells $100 Million of Non-Performing Loans to Amcon
Bloomberg
Wema Bank Plc , a Nigerian lender that failed a central-bank audit in 2009, sold 15.2 billion naira ($100 million) of loans to the state-owned company set up to support the nation's banks, spokesman Tunde Olofintila said.
http://jlne.ws/f4OsRv
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