June 9, 2011
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Notes On The 2011 Morningstar Conference:
A few headlines have come out of this year's Morningstar Investment Conference, which has seen upwards of 1,600 in attendance. The conference - held this week in Chicago - is always heavy with journalists and fund managers, and the event garnered some international attention Wednesday when Chief Investment Officer and Founder of the investment management firm Pacific Investment Management Co. (PIMCO), Bill Gross, warned that a potential dollar crisis could be in sight.
Illustrating the high level of sophistication of the individuals who attend these conferences, many participants have been tweeting about their interactions at the event. Even if you can't attend the conference, you can join in the fun by dialing up related tweets with hashtag MIC2011. You can also monitor the conference by reading Morningstar's own blog and video coverage about the event. It's expected that reports will continue to be posted on the Morningstar blog, even after the event has ended.
See the full agenda for the conference here:
Related stories:
Bill Gross Sees Potential Dollar Crisis
By Mark Gongloff, WSJ.com
Pimco’s Bill Gross speaking at an investor conference in Chicago. Here are the headlines from the wire:
*DJ Pimco’s Gross: Questions If ‘Inflating’ Economy Via QE Is Good Idea
*DJ Pimco’S Gross: Real Interest Rates Have Dropped To ‘Staggering’ Levels
*DJ Pimco’s Gross: Falling Rates Are What The Fed Wanted
*DJ Pimco’s Gross: Low Rates Create ‘Potential Crisis’ In US Dollar
*DJ Pimco’s Gross: Rates ‘Can’t Keep Going Lower, Lower, And Lower’
*DJ Pimco’s Gross: Sees ‘Policy Consquences’ From Fed’s Low-Rate Stance
*DJ Pimco’s Gross: Questions If ‘Inflating’ Economy Via QE Is Good Idea
It sounds a great deal like what he’s been saying for more than a few months now. The market continues to ignore him, for now, anyway.
http://jlne.ws/m6FJAo
There Will Be No QE3
Reuters
Pimco co-chief investment officer Bill Gross said the Federal Reserve would not be able to start a third round of quantitative easing after the second round expires at the end of this month.
http://jlne.ws/j8Yfjg
Gross Has 'No Regrets' Missing Treasury Bond Rally for Long-Term Strategy
Bloomberg
Bill Gross , manager of the world's biggest bond fund, is proving once again that he's willing to suffer short-term pain for long-term gain.
http://jlne.ws/lFlgbK
--Christine Nielsen
Lead Stories
Debt Ceiling Talks to Resume After New Warning
By MICHAEL R. CRITTENDEN, WSJ.com
High-stakes negotiations to raise the U.S. debt ceiling will likely include the politically thorny issue of raising revenue when lawmakers meet on Thursday, as pressure mounts for top policy makers to show signs of progress.
http://jlne.ws/jcTEZs
Fitch may cut U.S. to restricted default in August
Reuters
The United States probably wouldn't be able to maintain its prized AAA sovereign ratings status if it suffered even a "technical" default on its debt, Fitch Ratings said on Wednesday.
http://jlne.ws/jTK7eo
FRB: Speech--Bernanke, The U.S. Economic Outlook
I would like to thank the organizers for inviting me to participate once again in the International Monetary Conference. I will begin with a brief update on the outlook for the U.S. economy, then discuss recent developments in global commodity markets that are significantly affecting both the U.S. and world economies, and conclude with some thoughts on the prospects for monetary policy....
http://jlne.ws/itdGTF
Markets throw back Bernanke life preserver
By Greg Robb, MarketWatch
Federal Reserve Board Chairman Ben Bernanke threw financial markets a life preserver, but the markets have thrown it back, disappointed that the U.S. central bank was not preparing another quantitative easing ocean liner to come to its rescue, Fed watchers said Wednesday.
http://jlne.ws/j4kdFb
Bernanke sees job, growth pickup in second half
By Greg Robb, MarketWatch
Federal Reserve Board Chairman Ben Bernanke said Tuesday that he is not in the camp of economists worried about a double-dip recession as he defended the central bank from accusations it’s fueled a boom in commodity prices.
http://jlne.ws/kOGJvq
Sizing up the Fed's few options
By Cyrus Sanati, CNN Money
Wall Street is abuzz with speculation that the government is gearing up to inject billions of dollars of fresh cash into the economy in an effort to speed up economic growth. It would be the third time since the financial crisis that the government, more specifically the Federal Reserve, would move to grease the wheels of the U.S. economy by essentially printing money.
http://jlne.ws/iGG1c2
World Bank Economist: Third Round Of US Quantitative Easing Unlikely
Dow Jones/Morningstar
The U.S. Federal Reserve is unlikely to conduct a third round of quantitative easing, Hans Timmer, director of the World Bank Prospects Group, said Wednesday.
http://jlne.ws/iDq01S
Obama: US, Germany agree European economic crisis cannot put world economy at risk
Desmond Butler, The Canadian Press/Yahoo! Finance
President Barack Obama says the U.S. and Germany have agreed that the economic crisis in Europe cannot put the global economy at risk.
http://jlne.ws/mLxHUg
IMF's John Lipsky: Yen strength will not hurt Japanese growth
Knowledge To Action
The strength of the yen in Forex trading is unlikely to hinder Japan's future economic recovery, according to the acting head of the International Monetary Fund.
http://jlne.ws/lvVDxH
Geithner triggers backlash on regulation
By Kevin Brown in Singapore, Robert Cookson in Hong Kong and Jeremy Grant in London - Financial Times
Tim Geithner’s warning that the world could face another global financial crisis unless Asia adopts US regulations on derivatives transactions triggered a largely critical response in the region. Mr Geithner was careful not to name Asian jurisdictions suspected of seeking to avoid tough regulation on derivatives trading, arguing only that Asian “progress” on derivatives trading was essential to prevent regulatory arbitrage. However, US officials said the Treasury secretary was concerned that Hong Kong and Singapore might try to lure business with softer rules. That went down badly in both Asian financial centres.
http://jlne.ws/mvNxec
Senate votes to let Fed trim debit card swipe fees
AP
The Senate has voted to let the Federal Reserve limit the fees that stores pay banks each time a shopper swipes a debit card.
http://jlne.ws/mkVy7C
U.S. can take both sides in IMF leadership fray
By Chris Brummer, Milken Institute
The unscheduled and humiliating departure of Dominique Strauss-Kahn from the IMF has sparked intense debate about who should replace him as the leader of the pivotal international organization. Traditionally, the IMF has always been led by a European. And in light of the recent debt crises in Greece, Spain, Portugal and Ireland, Europeans are calling for continued leadership from one of their own to help save both the European Union and the euro. But leaders from upstart economic powers like Brazil, Russia, India, China and South Africa are pushing for a director from the developing world, especially because emerging markets are increasingly acting as financiers for their more developed counterparts.
http://jlne.ws/jg0eNA
U.S. debt default unimaginable, creditors say
By Emily Kaiser, Reuters
Allowing a brief U.S. debt default to force government spending cuts is a "horrible idea" that could destabilize the world economy and sour already tense relations with big creditors like China, government officials and investors said on Wednesday.
http://jlne.ws/mArjyq
Trichet Holds Line on Greek Debt Plan
By BRIAN BLACKSTONE, WSJ.com
European Central Bank President Jean-Claude Trichet stood his ground in the high-stakes dispute between the bank and Germany over how to handle Greece's debt burden, reiterating the ECB's opposition to extending the maturities on Greek debt.
http://jlne.ws/mTYg2Y
Schaeuble: coalition backs stance on Greek bondholders
By Gernot Heller, Reuters
All three parties in Germany's ruling coalition back the government's position on Greece, Finance Minister Wolfgang Schaeuble said on Thursday after proposing private investors should renew their Greek bondholdings.
http://jlne.ws/kRLg8S
Greece Is Said to Require $65 Billion More in Emergency Loans From EU, IMF
By James G. Neuger, Bloomberg
European governments and the International Monetary Fund would lend as much as an extra 45 billion euros ($65 billion) to Greece under an expanded plan to avoid the euro area’s first sovereign default, two people with direct knowledge of the talks said.
http://jlne.ws/jbUou6
Berlin seeks 7-year Greek debt extension
By Gerrit Wiesmann, FT.com
The German government wants Greece to offer all holders of its sovereign bonds a seven-year extension of maturities as a condition of more financial aid from Berlin, Wolfgang Schäuble, finance minister, said in a letter to his European Union colleagues.
http://jlne.ws/kmeXve
One Billion Served: IRS E-File Passes Major Milestone
Press Release
IRS e-file has reached a major milestone as it passed the one billion mark for individual tax returns processed safely and securely since 1986.
http://jlne.ws/mvu4Do
Interest-Rate Trading: Rules, Tech Forcing Change
By Tom Steinert-Threlkeld, Securities Technology Monitor
Rule changes brought on by the Dodd-Frank Wall Street Reform Act are expected to produce the most change in the way trading in contracts involving interest-rate commitments. But, for at least sell-side traders, technology is expected to produce at least as much change in the trading of interest-rate products. Which, in turn affects how corporations handle risk, since hedging dominates trading of those products.
http://jlne.ws/lvev7I
Swap Exemption May Post Risk to U.S. Financial System, Exchange Group Says
Bloomberg
A U.S. Treasury Department proposal exempting foreign exchange swaps and forwards from Dodd-Frank Act regulations could increase risk in the financial system and undermine the regulatory overhaul, a trade association for exchanges and users of the derivatives market said.
http://jlne.ws/jzRB65
SIFMA Submits Comments to CFTC Regarding Dodd-Frank
Press Release
SIFMA today announced that SIFMA and the Futures Industry Association (the “Associations”) have filed a supplemental comment letter with the Commodity Futures Trading Commission (CFTC) regarding the CFTC’s Proposed Rules on the designation of a chief compliance officer (CCO) for futures commission merchants (FCMs), swap dealers (SDs), and major swap participants (MSPs). The Associations’ additional comments supplement those provided to the CFTC in their joint letter submitted January 18, 2011.
http://jlne.ws/mhUJeb
Dow Jones Indexes Launches Four Bond Indexes For Costa Rica
Press Release
http://jlne.ws/lGAZfV
How Dimon Played on Wall Street
NY Times
In an exchange with Ben Bernanke of the Federal Reserve, Jamie Dimon, the chief executive of JPMorgan Chase, questioned whether regulation was too harsh. CNBC discusses whether this is the broad industry view.
http://jlne.ws/l0qwPM
Dominique Strauss-Kahn Pleads Not Guilty
By JOHN ELIGON, The New York Times
Dominique Strauss-Kahn, the former managing director of the International Monetary Fund, pleaded not guilty on Monday to charges that he sexually assaulted a hotel housekeeper.
http://jlne.ws/lTHBW7
Lagarde ‘confident’ about IMF job
By Kathrin Hille in Beijing - Financial Times
Christine Lagarde said she was “positive and confident” about her bid to become the next head of the International Monetary Fund after two days of meetings in Beijing to discuss her candidacy.
http://jlne.ws/k5A3RE
Carstens has credibility but his IMF bid will fail
By John Paul Rathbone in Mexico City, Financial Times
Three prejudices, but only one true conclusion, have so far emerged since Agustín Carstens, the head of the Mexican central bank, launched his bid to head the International Monetary Fund.
http://jlne.ws/lzgiAs
India plays waiting game on IMF post
By James Lamont in New Delhi, Financial Times
India has withheld its public support for the bid by Christine Lagarde, France’s finance minister, to become the president of the International Monetary Fund.
http://jlne.ws/kULaF2
ECB expected to signal July rate increase
By Sakari Suoninen, Reuters
The European Central Bank is likely to signal a July interest rate rise on Thursday while continuing to provide banks with unlimited amounts of cash to help weaker lenders hit by the euro zone debt crisis.
http://jlne.ws/k5JshH
The fallacy of financial regulation: neglect of the shadow banking system
By Michael Pomerleano, Financial Times
The message of this article is straightforward. In response to the crisis, the reforms in financial regulation address threats to the banking system by increasing capital and providing for liquidity in the banking system. This article argues that the measures miss the point of the recent crisis. The liquidity crisis in the shadow banking system was a major source of financial and economic instability.
http://jlne.ws/lOdqzE
Arguing over the ABC and D of the crisis
By Martin Wolf, Financial Times
The debate over post-crisis monetary and fiscal policy has been heating up, on both sides of the Atlantic. The eurozone is committed to fiscal and monetary tightening. The US is shifting towards fiscal tightening, while future monetary policy is unclear. Meanwhile, the UK is committed to fiscal tightening, with the future of monetary policy also uncertain.
http://jlne.ws/lft2F0
Events
2011 Morningstar Investment Conference
June 8-10, 2011
Morningstar's Conference For Leaders From Across The Investment Industry - Chicago
http://jlne.ws/gD5nJ1
Introduction to Treasury Futures: Factoring the Risks
June 16, 2011
IFM's Course On Cash And Futures Treasury Trade - New York City
http://jlne.ws/kdOeSQ
Treasury Futures Basis: Beyond the Risks
June 16, 2011
IFM's Course On the Treasury Futures Basis - New York City
http://jlne.ws/kdOeSQ
Treasury Futures: Using International Fixed-Income and Money Market Spreads
June 16, 2011
IFM's Course On Using International Fixed-Income and Money Market Spreads - New York City
http://jlne.ws/kdOeSQ
Making Sense of Credit Default Swaps
June 22, 2011
IFM's Course On Credit Default Swaps - Chicago
http://jlne.ws/kdOeSQ
FIA Treasury & Rates Forum
September 14, 2011
FIA Program On Growing Role Of Treasury Futures - New York City
http://jlne.ws/fQFQXP
Economic News
Robert Shiller Could Easily See Another 25% Drop In Home Prices
By Gregory White, Business Insider
If home prices fall another 10 to 25%, that "wouldn't surprise me at all," Robert Shiller told Reuters Insider today.
http://jlne.ws/jWbrNT
Growth slowing in four of 12 districts: Beige Book
By Greg Robb, MarketWatch
The pace of economic growth is slowing in four of the 12 Federal Reserve regions, according to the central bank’s latest survey of economic conditions known as the Beige Book released on Wednesday.
http://jlne.ws/m6Zxg8
Wholesale inventories increased 0.8% in April
The Bond Buyer
Wholesale inventories increased 0.8% in April, the Commerce Department reported Thursday.
http://jlne.ws/mjZqu6
Exchanges, Clearing Houses & MTFs
DTCC Enriches Its Posting of Treasury Fails Data, Adds Full-Year Data in Downloadable Format
Business Wire
NEW YORK--(BUSINESS WIRE)--DTCC announces that it is enriching the information it publishes about U.S. Treasury trade "fails" by offering a more detailed view of the underlying data on a daily, weekly, monthly and yearly basis.
http://jlne.ws/lDx4iP
Swaps Data Deal Under Dodd-Frank Wins 89% Market Share for DTCC
By Matthew Leising, Bloomberg
The Dodd-Frank Act requirement that all swaps be reported to trade repositories may be creating a corner of finance where regulators are willing to shrug off monopoly concerns. The Depository Trust and Clearing Corp. last month won a contract to collect trade information on interest-rate swaps, the largest part of the $601 trillion over-the-counter derivatives market. New York-based DTCC already controls the data warehouse for credit-default and equity swaps, and adding interest-rate transactions will give it 89 percent of the global repository business.
CME on the offensive in challenge to Liffe's rates
Jonathan Spicer, Reuters
CME Group Inc , the giant U.S.-based exchange operator, will ramp up trading of European-focussed interest rate products in a direct challenge to NYSE Euronext's Liffe business, and a shift to offense after years on defence.
http://jlne.ws/kYRwu8
Deutsche Börse introduces new benchmark for interest rate swaps
Press Release
Deutsche Börse – Market Data and Analytics is expanding its range of information products with “Eurex ICAP Swap Spreads”. The new data product, which aims to serve as a neutral benchmark for Euro interest rate swaps, was developed jointly with interdealer broker ICAP.
http://jlne.ws/mwz9M3
Firms & Banks
Deutsche Bank Says It's Aware of Korean Court Order to Freeze Some Assets
Bloomberg
Deutsche Bank AG (DBK) said it is aware of an order granted by a South Korean court to freeze some of its assets. "We understand that a preservation order was granted by a court at the prosecutors' request and without Deutsche Bank's arguments being heard," Michael West , Deutsche Bank's Hong Kong-based spokesman, said in an e-mailed response to a query.
http://jlne.ws/mAdyQf
Axa Private Equity buys $1.7B portfolio from Citigroup
USA Today
France's Axa Private Equity said Wednesday it agreed to buy a $1.7 billion private equity portfolio from Citigroup (C) as the big U.S. bank sheds some of its non-core businesses. Terms of the deal announced were not disclosed. The portfolio includes 207 limited partnership interests in private equity buyout funds and a portfolio of direct stakes in companies. It does not include funds or investments managed by Citi Capital Advisors.
http://jlne.ws/jzDxcg
UBS pledge to staff to compete on pay
By Megan Murphy and Helen Thomas in London, Financial Times
UBS executives have reassured senior bankers that the group will raise pay to attract and retain top staff after suffering a spate of defections from its US investment bank. Carsten Kengeter, head of UBS’s investment bank, and other senior executives have been bruised by speculation that the group’s advisory and debt and equity underwriting businesses in the US are struggling after more than 15 bankers quit to join rivals in recent months.
http://jlne.ws/j9ymet
HSBC in $62m Madoff investor deal
By Brooke Masters, FT.com
HSBC has agreed to pay $62m to investors in a hedge fund that fed money to fraudulent money manager Bernard Madoff, becoming the first custodian bank to settle a class-action lawsuit connected to the scandal. The investors in the Thema fund would receive about 20 cents on the dollar for their $312m in real losses in the Ponzi scheme. HSBC, which served as custodian for the Irish-based fund, did not admit liability.
http://jlne.ws/keLJid
Pimco Took Bath on Lehman Debt
WSJ.com
Bond-investing veteran Bill Gross buoyed his reputation during the 2008 financial crisis through well-timed bets on Treasurys and mortgage debt. Now, new court documents show that he also took a bath in loading up on Lehman Brothers Holdings Inc. debt before the investment bank cratered that year.
http://jlne.ws/m1gQnv
JPMorgan and UBS scoop top prizes at Extel awards
Reuters Finance News (EU) via Yahoo! UK & Ireland Finance
LONDON (Reuters) - UBS and JPMorgan scooped the top gongs at the annual Thomson Reuters Extel awards, cementing their multi-year grip on some of the most coveted prizes in the UK financial industry. Swiss-based ...
http://jlne.ws/mvsOLM
Lazard Hires Structured Credit Advisory Team
Finanzen.net
Lazard Ltd (NYSE:LAZ) today announced the hire of an experienced team of senior credit professionals to broaden the firm’s Capital Structure Advisory business, effective immediately.
http://jlne.ws/mj5ZaF
BIS-Banks may need more cash to clear derivatives
Reuters UK Focus via Yahoo! UK and Ireland Finance
The world's top 14 derivativesdealers may need extra cash to handle a surge in transactionclearing, especially in choppy markets, the Bank forInternational Settlements (BIS) ...
http://jlne.ws/jQH7T2
Groupon banker leaving Chicago for Hong Kong
Crain's Chicago Business
Morgan Stanley's lead investment banker in Chicago, Bill Strong, who just shepherded Groupon Inc.'s filing for an initial public offering, is leaving the city this month to take a job as co-CEO of the company's Asia-Pacific region.
http://jlne.ws/mpLj9w
Ex-Citi Buyout Banker Heads to Terra Firma
By PETER LATTMAN, NY Times
Kamal Tabet, formerly one of Citigroup’s highest-ranking bankers to private equity firms, has joined Terra Firma as its head of investor relations, according to people briefed on the matter.
http://jlne.ws/mDLcZM
What will be Barclays´ role in Spain?
Sharecast Finance News via Yahoo! UK & Ireland Finance
Since last week's meeting between Barclays chief executive Bob Diamond and Spain's president Zapatero, the market has been speculating that the bank could be interested in buying a smaller Spanish ...
http://jlne.ws/ltQEPb
Banks Shouldn't Hold Too Much Capital, Warns Bank Employee
By Mark Gongloff, The Wall Street Journal
How do you solve a problem like bank capital? How do you hold a moonbeam in your hand?
http://jlne.ws/m0dQYr
Malloy dismisses possible UBS move as 'rumor'
Greenwich Time
Gov. Dannel Malloy dismissed speculation of the financial giant's possible move from the city on Thursday as rumors.
http://jlne.ws/inIGmE
RBS reportedly puts aviation unit on block
Market Watch
Royal Bank of Scotland Group PLC (RBS.LN), which is 83% owned by the U.K. government, has kickstarted a sale of its aircraft leasing business, some two years after the bank originally hired advisers to weigh up its strategic options, people familiar with the situation told Dow Jones Newswires Thursday
http://jlne.ws/lJ4YTh
Deutsche says it does more with less
eFinancial News
The number of front office staff in Deutsche Bank's investment banking division has fallen by 12% from pre-crisis levels, according to a strategy presentation by Anshu Jain, while net revenue per person has increased 20%.
http://jlne.ws/jzRC2o
Regulators
Volcker Named to Panel to Advise on Too-Big-to-Fail
Former Federal Reserve Chairman Paul Volcker and former Citigroup Inc. co-chairman John Reed have been named to a Federal Deposit Insurance Corp. panel that will help the agency map strategy for unwinding too-big-to-fail financial firms when they collapse.
http://jlne.ws/kVJkc0
FSA sights set on compulsory derivative reporting
By Huw Jones, Reuters
Financial markets watchdogs will make reporting of derivatives trades compulsory within 18 months in an attempt to improve their chances of spotting market bubbles, a senior UK regulator said on Tuesday. Reporting of trades in the $600 trillion global derivatives market, which is dominated by London and New York, is one of the pledges world leaders made a year after the collapse of U.S. Lehman Brothers in 2008 left a trail of opaque contracts.
http://jlne.ws/lXLbYC
William C Dudley: US economic policy in a global context
Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Foreign Policy Association
Corporate Dinner, New York, 7 June 2011. It is a pleasure to have the opportunity to speak here this evening and I would like to thank
the Foreign Policy Association for inviting me. The Association has served for decades as a catalyst for developing awareness and understanding of global issues and for providing nonpartisan forums...
http://jlne.ws/iX0Z1c
Wheatley attacks Geithner on regulation
By Robert Cookson, FT.com
US Treasury secretary Tim Geithner was talking “nonsense” when he warned that the world must follow America’s lead on financial regulation, according to a senior European regulator and outgoing head of Hong Kong’s market watchdog.
http://jlne.ws/k7XWDG
Fed’s Evans Shaves Growth Forecasts
By Jon Hilsenrath, WSJ.com
Charles Evans, president of the Federal Reserve Bank of Chicago, is marking down his growth forecasts for 2011 and 2012, but says he isn’t prepared to call for new Fed actions to support the economy.
http://jlne.ws/itMdff
Atlanta Fed President Dennis Lockhart speaks on inflation and the economy to the Charlotte Economics Club
By Steve Goldstein, MarketWatch
Atlanta Fed President Dennis Lockhart threw his support behind an explicit inflation target, which he said could improve communication, which he says has been hurt by the debate over core inflation, "which can confuse and frustrate the public." He'd like an inflation goal targeted to headline inflation, over a "realistic timeframe," but one that allows for short-run deviations.
http://ow.ly/5ccFE
Fed's Fisher: Lots of liquidity in economy
Reuters
Dallas Federal Reserve President Richard Fisher said on Tuesday there was ample liquidity in the U.S. financial system and no need for the U.S. central bank to continue its extremely easy monetary policy.
http://jlne.ws/ihzKQN
Geithner: ‘Very Good Chance’ of Deficit Deal This Summer
By Damian Paletta, WSJ.com
Treasury Secretary Timothy Geithner said Monday in Atlanta that policy makers have a “very good chance” of getting a deficit-reduction deal this summer, though he offered few new clues about how the White House and congressional Republicans might broker such a deal.
http://jlne.ws/lmtluk
Remarks by Treasury Secretary Tim Geithner to the International Monetary Conference
http://jlne.ws/m0715M
Cameron’s U.K. Budget Cuts ‘Essential’: IMF
By Svenja O’Donnell, Bloomberg
U.K. Prime Minister David Cameron’s government should stick to its deficit-cutting plan as the current economic weakness is “temporary,” the International Monetary Fund said.
http://jlne.ws/mcyOrb
Diamond exits fight for Fed board seat The Fed
By Greg Robb, MarketWatch
Peter Diamond, the Nobel Prize-winning economist, has announced that he will request that the White House withdraw his nomination to serve on the Federal Reserve board of governors.
http://jlne.ws/mLBnr8
Röller to be Merkel’s new economic advisor
By Gerrit Wiesmann in Berlin, Financial Times
The economist Lars-Hendrik Röller will be been named as the German government’s chief economic adviser after the departure of Jens Weidmann to become Germany’s top central banker at the Deutsche Bundesbank, the Financial Times has learnt.
http://jlne.ws/l75xYF\
FDIC Board Creates Advisory Committee on Systemic Resolutions
The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) has approved the creation of the FDIC Advisory Committee on Systemic Resolutions to provide advice and guidance on a wide range of issues regarding the resolution of large, systemically important institutions. The FDIC gained the authority to resolve such institutions with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act on July 21, 2010.
http://jlne.ws/iMjb0m
BoE warns clearing houses over taxpayer bailouts
By Philip Stafford, Financial Times
The Bank of England has warned that clearing houses should not assume they will receive a bailout by taxpayers if they fail. Paul Tucker, deputy governor, financial services at the Bank of England warned of “moral hazard” in allowing clearing houses - also known as central counterparties (CCPs) - to conduct business without a clear plan if the house goes bust.
http://jlne.ws/lfjaO5
Trichet seeks single EU finance ministry
By Quentin Peel in Berlin, Financial Times
Jean-Claude Trichet, president of the European Central Bank, has called on the European Union to take bolder steps towards controlling fiscal and economic policies, suggesting a long-term goal of establishing a European ministry of finance.
http://jlne.ws/jJuTwC
OTC
Only 40% of Firms Trading OTC Interest Rate Derivatives have begun to Actively Prepare for Regulatory Reform, Says TABB
Business Wire
NEW YORK & LONDON--(BUSINESS WIRE)--Only 40% of Firms Trading OTC Interest Rate Derivatives have begun to Actively Prepare for Regulatory Reform
http://jlne.ws/mLMY6l
Deutsche Bank Unites Derivatives Trades as Swaps Oversight Looms
By Matthew Leising, Bloomberg
Deutsche Bank AG is consolidating trading and processing services for listed and over-the-counter derivatives before U.S. and European regulations take effect.
http://jlne.ws/lama3n
Global News
European Parliament: Beefing Up Credit Rating Agency Rules
Press Release
MEPs on Wednesday advocated making credit rating agencies liable in civil law for their ratings, and creating a European credit rating foundation. They also called for special attention to be paid to sovereign debt ratings. The new rules for credit rating agencies should also clarify their working methods, boost competition and reduce reliance on their ratings, says the resolution.
http://jlne.ws/iikZuE
UK banks divided over ringfencing
By Sharlene Goff and Patrick Jenkins, Financial Times
A clear divide is emerging between the heads of Britain’s biggest banks over how to implement a key proposal to restructure the industry by ringfencing their retail operations.
http://jlne.ws/mGuF9c
Royal Bank of Scotland boss admits taxpayers' money could have 'leaked' into bankers' bonuses
Daily Mail
The boss of the Royal Bank of Scotland admitted today that taxpayers' money could have gone towards bankers' bonuses. Stephen Hester conceded there may have been some 'leakage' from that money into the bonus pool.
http://jlne.ws/l88Vhy
Ring-fencing banking activities will create more risk, says RBS chief
Money Marketing Online
Royal Bank of Scotland chief executive Stephen Hester says proposals to ring-fence retail and investment banking operations would create more risk in the banking industry.
http://jlne.ws/jzWNo3
Brazil's Economic Boom Advances in First Quarter
BY JEFF FICK, WSJ.com
Brazil's economy continued to expand at the start of 2011, fueled by record-low unemployment and higher wages that allowed families to boost spending.
http://jlne.ws/j9ODkZ
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