September 29, 2011
JLN Interest Rates - http://www.jlninterestrates.com
Conversation Starter
SIGTARP Report On TARP Shows Law Firms Were Paid Millions For Professional Services Related To TARP
The Acting Special Inspector General for the Troubled Asset Relief Program (SIGTARP) has issued an audit report: Legal Fees Paid Under the Troubled Asset Relief Program: An Expanded Report. The report shows that from the inception of TARP to March 31, 2011, Treasury's Office of Financial Stability (OFS), which administers TARP, paid five law firms more than $27 million in fees and expenses. SIGTARP began an audit of OFS policies and practices governing OFS contracts with law firms in May 2010 as part of SIGTARP's continuing oversight of TARP and in response to a request from Senator Tom Coburn M.D. See the entire SIGTARP report here (PDF).
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Euribor Futures To Join Eurodollar Futures On CME Globex — Oct. 3, 2011
Exchange Release
CME Group will launch Euribor Futures on Globex Oct. 3. Euribor futures provide the marketplace with another flexible, efficient, and cost effective tool for managing global interest rate exposure. Based on the Euro Interbank Offered Rate, Euribor futures will trade around the clock, around the world on CME Globex, alongside Eurodollar and Treasury futures. Euribor futures are a natural extension of CME Group’s highly successful Eurodollar futures contract. In addition, Euribor futures leverage the global distribution of CME Globex, offering fast and efficient access to the world’s most liquid interest rate markets.
See a video of CME's Managing Director, Interest Rate and Foreign Exchange Products, Derek Sammann, talking about the CME's new Euribor contract here.
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MarketsWiki Questions: Exploring Financial Technology
Question 6 Interactive Video Now Available - http://marketswiki.tv/questions/q6/
Ahead of our MarketsWiki Questions: Exploring Financial Technology event in October we're asking experts in the financial services industry seven questions and providing the best answers in an interactive video format.
Question 7: What, in terms of technology, is missing in the financial markets? - http://marketswiki.tv/questions/q7/
(Question 7 is sponsored by: Patsystems - http://lin.sh/mwq_sungardlogo)
Register here or email ryanlothian@johnlothian.com for an invoice.
DATE: Wednesday, October 5, 2011
TIME: 4:30 pm - 6 p.m., Networking event afterward.
PLACE: Illinois Institute of Technology - 565 W. Adams St, Chicago, IL 60661
COST: $20 per person
Our MarketsWiki Questions: Exploring Financial Technology interactive video series examined the intersection of technology and the financial markets by posing seven critical questions to dozens of market and technology experts. Join us on October 5th in Chicago as our series culminates with an exciting lineup of speakers presenting the market technology ideas and solutions that will shape our industry's future.
See the list of speakers here.
-- Christine Nielsen
Lead Stories
The Road from Depression
George Soros
Financial markets are driving the world towards another Great Depression with incalculable political consequences. The authorities, particularly in Europe, have lost control of the situation. They need to regain control, and they need to do so now.
http://jlne.ws/nyvCEU
Bernanke Says ‘Reforms' in U.S. Housing Policy Will Take Time
Bloomberg
Federal Reserve Chairman Ben S. Bernanke said an overhaul of U.S. housing policy won't likely occur any time soon since the economy is still healing.
http://jlne.ws/mPyj8t
Plosser Says Latest Easing Moves May Undermine Fed Credibility
By Joshua Zumbrun Bloomberg Businessweek
Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank may be undermining its own credibility by pushing forward with monetary easing that will do little to boost growth.
http://jlne.ws/nPHHQD
Fed’s Williams Says It’s Unclear If ‘Operation Twist’ or QE Works Better
By Steve Matthews and Klaus Wille, Bloomberg
Federal Reserve Bank of San Francisco President John C. Williams said it’s unclear whether outright purchases of Treasury securities or lengthening their duration such as in the plan announced this week is more effective in boosting the economy.
http://jlne.ws/qdaucL
Economic Signals Heighten Worries of a Double-Dip
BY SUDEEP REDDY AND BEN CASSELMAN
Is the world heading for another recession?
Fresh data Thursday pointed to a decline in manufacturing activity in both China—a critical engine of the global recovery—and Europe, a sign businesses are bracing for slower growth. Compounding the concern is the political paralysis in Europe and the U.S., where rival parties are divided on how to respond to the crisis.
http://jlne.ws/qotpgu
Fed's Kocherlakota: Central Bank Independence and Sovereign Default
Sargent and Wallace published their classic “Some Unpleasant Monetarist Arithmetic” in the Minneapolis Fed’s Quarterly Review in 1981. Since that date, there has been a growing appreciation of the role of fiscal policy in the determination of the price level. The idea is a simple one. Consider a government that borrows only using non-indexed debt denominated in its own currency. There is an intertemporal government budget constraint that implies that the current real value of government liabilities—including the monetary base—must equal the present value of future real surpluses. Because the liabilities are nominal and non-indexed, the government budget constraint provides a linkage between the public’s assessment of future real tax collections and government spending and the current price level.
http://jlne.ws/raYW
Fed's Kocherlakota: Tough central banks can control prices
Reuters
Central bankers can control inflation regardless of fiscal policy, but only if they are willing to allow the government to default, Minneapolis Federal Reserve President Narayana Kocherlakota said on Monday.
http://jlne.ws/oENewu
Fed's Kocherlakota: Central Bank Price Control Linked To Debt-Default Risk
WSJ.com
The head of the Minneapolis Federal Reserve underscored his reputation as an inflation hawk Monday by stating that central bank control over price levels may hinge on a willingness to allow its government overseer to default.
http://jlne.ws/q8KMQu
Minneapolis Fed: The Generation Gap
Recessions hurt the old most and young least, with impact determined by asset
sales of middle-aged.
http://jlne.ws/pM6Mgi
Moody's: Rising Risks Make U.S. Recession an Even Bet
The probability that the U.S. will be in recession in six months is rising quickly, requiring action by both U.S. and European policymakers.
http://jlne.ws/q60qlF
Mounting concerns over Fed's Operation Twist
By Chris Sloley, CityWire
The US Federal Reserve’s major policy announcement – dubbed Operation Twist – lacks enough positive market impact and there is a fear the programme will fail.
http://jlne.ws/oVO0wQ
Fed's Lockhart: Operation Twist Should Have 'Modest Impact
MarketWatch
The Fed's latest policy move to extend the maturity of its balance sheet, dubbed Operation Twist, will only have a "modest positive impact" on the economy, said Dennis Lockhart, the president of the Atlanta Federal Reserve Bank, on Tuesday.
http://jlne.ws/pmVjmE
Fitch: Fitch Downgrades New Zealand to AA, Outlook Stable
New Zealand's high level of net external debt is an outlier among rated peers - a key vulnerability that is likely to persist as the current account deficit is projected to widen again, reflecting a structural savings/investment imbalance. Nonetheless, New Zealand remains well placed among the world's highly-rated sovereign credits, with its creditworthiness supported by moderate public indebtedness, fiscal prudence, and strong public institutions.
http://jlne.ws/pdkQ0j
Geithner Predicts Europe Will Step Up on Crisis After Chiding
BusinessWeek
U.S. Treasury Secretary Timothy F. Geithner predicted that European governments will step up their response to their region's debt crisis after a chiding from counterparts around the world.
http://jlne.ws/oid76P
Bernanke's Twist May Be Hampered by Geithner's Bond Selling
Bloomberg
Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Timothy F. Geithner may be working at cross purposes as one buys Treasury bonds and the other sells them.
http://jlne.ws/psIcvQ
G20 promises collaboration to boost world economy
USA Today
The Group of 20 leading advanced and emerging economies are vowing to work together to boost the struggling global economy and financial system. The G-20 voiced the resolve in a statement, saying its finance ministers and central bank governors are "committed to a strong and coordinated international response to address the renewed challenges facing the global economy."
http://jlne.ws/p2NayW
G-20: Globalization's Two-Edged Sword
International Business Times
Even as G-20 leaders grapple with the global financial crisis, a larger, over-arching concern is limiting GDP growth in the U.S., and, to a lesser degree, in other developed economies and, by extension, decreasing the capacity of the these nations to counteract the crisis: inadequate wage growth.
http://jlne.ws/nYOKrY
ECB Ready to Act Next Month If Outlook Worsens
Bloomberg
The European Central Bank may step up efforts to boost growth and ease financial-market tensions as early as next month, Governing Council members said.
http://jlne.ws/oVCnva
ECB to Consider New Crisis Tactics
By Gabi Thesing and Esteban Duarte, Bloomberg
European Central Bank policy makers are likely to next week debate restarting their covered-bond purchases along with further measures to ease monetary conditions, a euro-region central bank official said.
http://jlne.ws/oSvjYv
Fitch CDx Survey: Sovereign and Regulatory Issues Top of Mind for Banks
Business Wire
NEW YORK--(BUSINESS WIRE)--Sovereign credit default swaps (CDS) use, market volatility and regulatory issues topped the list of the most surprising events in the Credit Derivatives (CDx) market, according to Fitch Ratings' Annual Credit Derivatives Survey. Survey respondents cited unexpectedly high volumes and spread volatility among various sovereign names, particularly those of Western Europe ...
http://jlne.ws/r3M3OZ
Fitch: U.S. money fund exposure to European banks declines further
U.S. prime money market funds (MMFs) further reduced their total exposure to European banks as of month-end August 2011, according to Fitch Ratings. European bank exposure currently represents 42.1% of total MMF holdings within Fitch's sample, down from 47.2% as of month-end July. On a dollar basis, MMF exposure to European banks declined by 8% since month-end July and by 27% since month-end May.
http://jlne.ws/pwjOeW
Why Europe's Economy Matters For The U.S., In 1 Graph
by Jacob Goldstein, NPR
Why does Europe's endless debt crisis matter for the U.S.? Here's one reason. In the '90s, the economies of Europe and the U.S. were largely independent of one another. But in the past decade, as the graph below shows, they've risen and fallen together.
http://t.co/vzbQAt8j
Ermotti Named Interim Chief at UBS as Gruebel Resigns After Trading Loss
Bloomberg
Sergio Ermotti , UBS AG (UBSN) 's European head and a former derivatives banker, was named interim chief executive officer as Switzerland's biggest bank seeks to rebuild client and investor trust after a $2.3 billion trading loss.
http://jlne.ws/nT0nYQ
SIFMA Statement on Revised Proposals for Market-Wide Circuit Breaker Rules
Washington, DC, September 28, 2011—SIFMA today released the following statement from Randy Snook, executive vice president, after FINRA and the exchanges released new proposed rules outlining the operation of market-wide circuit breakers, which have been in development over the past year in response to the May 6, 2010 Flash Crash.
http://jlne.ws/phd2jH
NCUA proposing amendments to its proposed rule governing corporate credit unions
The NCUA is proposing amendments to its proposed rule governing corporate credit unions, previously published on March 1, 2011 (see 76 FR 11164). The original proposal removes references to credit ratings in regulations and proposes alternatives to the use of credit ratings. Among other changes, these amendments would delete the definition of "daily average net risk-weighted assets" and revise the definition of "net assets."
http://jlne.ws/oCCGNa
Foreclosed Families to March on Bank of America Friday with 1,000 supporters
Press Release
Over 1,000 people are expected to take to the streets Friday for a march on Bank of America (NYSE:BAC) to rally against Wall Street greed, predatory lending, and skyrocketing foreclosures in urban communities.
http://jlne.ws/qHzEzD
KKR's Kravis Says Credit Markets Making Buyouts More Expensive
BusinessWeek
Henry Kravis, co-founder of KKR & Co., said private-equity deals are becoming more expensive as the reluctance of banks and investors to lend drives up borrowing costs.
http://jlne.ws/qpqciQ
Trade Associations Oppose Global Financial Transaction Tax
Press Release
A broad group of trade associations sent a letter to U.S. Treasury Secretary Timothy Geithner reiterating their opposition to a financial transaction tax and urged him to continue to encourage other G20 members to resist pressure to adopt proposals for this tax on a global basis.
http://jlne.ws/qNF5tZ
Events
SEFCON II
Oct. 3, 2011
WMBAA To Examine Role And Operation Of Swap Execution Facilities Under Dodd-Frank
http://jlne.ws/pY4N7S
** CN: MarketsReformWiki's Doug Ashburn will be attending this event.
MarketsWiki Questions: Exploring Financial Technology
October 5, 2011, IIT Stuart School of Business
http://jlne.ws/oHRGmC
CMA/SCI New York CDS Seminar
October 6, 2011
CMA/SCI Discussions Will Focus On Dodd-Frank Regulations
http://jlne.ws/n7ukqG
The European Exchanges SummitOctober 17, 2011
Marketforce and the IEA discuss key issues with Europe's industry leaders
http://jlne.ws/roaBqg
7th Annual FIA Asia Derivatives Conference
November 29 - December 1, 2011
FIA looks at the futures and options industry in Asia
http://www.futuresindustry.org/asia-2011.asp
Economic News
Second-Quarter GDP Grew at 1.3% Rate
Reuters/The New York Times
The United States economy grew slightly more than previously reported in the second quarter, helped by consumer spending and export growth that was stronger than earlier estimated, according to a government report on Thursday that pointed to slow growth rather than a recession.
http://jlne.ws/pmfXif
Pending U.S. Home Sales Decline 1.2% as Lower Prices Fail to Stoke Demand
By Timothy R. Homan, Bloomberg
The number of contracts to purchase previously owned U.S. homes fell in August, a sign that lower prices and borrowing costs are doing little to stoke demand.
http://jlne.ws/o6GJ99
Kansas City Fed's Sept Manufacturing Composite Index Rises To 6
Dow Jones
Manufacturing activity in the Federal Reserve Bank of Kansas City's district picked up slightly in September, according to a report released by the bank Thursday. The expansion bucks the contractionary trends seen in other regional Fed surveys.
http://jlne.ws/nwkvT6
U.S. on ‘knife edge’ of contraction: Dallas Fed Economist
By Jim Forsyth, Reuters/Financial Post
The U.S. economy is on a ‘knife edge’ between growth and contraction and monetary policy tweaks do not seem to be helping, the Dallas Federal Reserve’s top economist said Tuesday.
http://t.co/3UEcdXi7
Consumer confidence was flat in September amid worries about jobs, income
Associated Press
Consumers’ confidence remained weak in September after dropping to a post-recession low during the month before. That’s left economists to wonder just what it’ll take to get Americans feeling good about the economy again.
http://jlne.ws/nurnrO
A Look at Case-Shiller by Metro Area
By Phil Izzo, WSJ.com
S&P/Case-Shiller home-price data showed sideways movement in July, as prices were boosted from a month earlier thanks to seasonal factors but remained below year-ago levels.
http://jlne.ws/pPjAPp
New U.S. home sales fall 2.3% in August to 295,000
MarketWatch
The sale of new U.S. homes fell 2.3% in August to an annual rate of 295,000, marking the fourth decline in a row, the Commerce Department reported Monday. Sales last month dropped to the lowest level since February. Economists surveyed by MarketWatch had forecast sales to drop to 292,000 last month.
http://jlne.ws/oxg9Js
U.S. September Dallas Fed Business Outlook Report (Text)
Bloomberg
The following is the text of the Texas manufacturing activity from the Federal Reserve Bank of Dallas.
Texas factory activity increased in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 1.1 to 5.9, suggesting growth picked up this month after stalling in August.
http://jlne.ws/mUiukq
Firms & Banks
B ofA Finds New Way of Making Money: $5 Debit Card Charge
By Shira Ovide, WSJ.com
Well, at least banks have found fresh ways of making money, since that whole mortgages and loans thing isn’t working out so well.
http://jlne.ws/n0r5bt
A $50 Billion Claim of Havoc Looms for Bank of America
By STEVEN M. DAVIDOFF, NY Times
Bank of America’s potential liability for bad mortgages — in the tens of billions of dollars — is well known. But Bank of America is haunted by other demons from the financial crisis, the most significant one being a lawsuit arising from its troubled Merrill Lynch acquisition.
http://jlne.ws/nXHMZx
Bank of America Mortgages Heading to Hedge Fund: Report
TheStreet.com
Bank of America is in talks to sell its correspondent mortgages business to a unit of Fortress Investment Group, the Wall Street Journal reported, citing people familiar with the situation.
http://jlne.ws/n5NKs8
Warburg’s Cortview Cuts Commercial Mortgage Team Led by Green
http://jlne.ws/pQpEzd
Deutsche Bank, Morgan Stanley To Sell $609 Million CMBS Next Week
Al Yoon, Dow Jones Newswires
Deutsche Bank AG expects to price $609 million in floating-rate commercial mortgage-backed securities next week, according to a term sheet sent to investors on Wednesday.
http://jlne.ws/pbRlm0
Deutsche Bank CEO Says Euro-Fund Approval 'Crucially Important'
Bloomberg
Deutsche Bank AG (DBK) Chief Executive Officer Josef Ackermann said it was "crucially important" for euro area governments to implement a July 21 agreement to beef up the rescue fund for their common currency.
http://jlne.ws/nfFUPA
SocGen's Newedge futures unit for sale - source
Reuters
Societe Generale (SOGN.PA) has put up for sale its stake in Newedge, a futures and clearing brokerage it co-owns with Credit Agricole (CAGR.PA), a source familiar with the situation said on Tuesday, as the No. 2 French bank looks to shrink its balance sheet and sell risky assets.
http://jlne.ws/oeNHQR
Goldman Sachs Wins Dismissal of Lawsuit Over CDO Loss
BusinessWeek
Goldman Sachs Group Inc. won dismissal of a lawsuit brought by Landesbank Baden-Wuerttemberg over losses on $37 million in collateralized debt obligations.
http://jlne.ws/ruDgPV
Pimco's Bridwell to Head Alternatives in Hedge Fund Push
BusinessWeek
Pacific Investment Management Co. named Jennifer Bridwell head of alternatives product development as the firm expands hedge funds and distressed-debt strategies.
http://jlne.ws/nPskwK
UBS chairman comes under attack
By Haig Simonian, FT.com
http://jlne.ws/mScXdI
UBS Shareholders Push for Deeper Changes
BY GORAN MIJUK,WSJ.com
Several influential Swiss shareholders called for more changes atop UBS AG and said reducing the size or even getting rid of the investment bank could lift Switzerland's largest financial firm out of its most-recent crisis.
http://jlne.ws/nL5iYz
UBS’s Grübel Steps Down, More May Follow
WSJ.com
Even as Oswald Grubel’s decision to resign over a trading scandal that cost UBS $2.3 billion is shaking the banking industry Monday, talk that more high-level departures may be needed is growing louder.
http://jlne.ws/nBVtLe
Barclays loses head of European retail banking
By Sharlene Goff, FT.com
http://jlne.ws/oUK7v4
Darnell Tells Merrill's Brokers He'll Stay Out of Their Way
BusinessWeek
Bank of America Corp.'s David Darnell, the commercial banker put in charge of the lender's Merrill Lynch brokerage, promised employees he'll do anything including "get out of the way" to help them improve results.
http://jlne.ws/owMpCe
Morgan Stanley Division Reaches Settlement With Nevada Attorney General
Las Vegas Review-Journal
A division of investment banker Morgan Stanley on Tuesday agreed to a settlement with the state attorney general that would end an investigation into the firm's alleged deceptive mortgage lending and securitization practices in Nevada. Morgan Stanley Mortgage
http://jlne.ws/qncd83
Morgan Stanley hires advisers from Wells Fargo
Market Watch
Morgan Stanley Smith Barney has hired two financial advisers from Wells Fargo Advisors who managed a combined $280 million in client assets. Lawrence Durso and Kris Frazier joined Morgan Stanley Smith Barney's Red Bank, N.J., office from Wells Fargo, a unit of Wells Fargo & Co. WFC. The team, which will report to complex manager Chris Shaw, generated $2.2 million in fees and commissions.
http://jlne.ws/q6yh4w
Freddie under fire over bad loan procedures
By Shahien Nasiripour in New York, Financial Times
Freddie Mac, the US government-controlled mortgage financier, used flawed procedures for determining how lenders repurchased soured loans, probably saddling taxpayers with billions of dollars in losses, according to a federal audit to be released Tuesday.
http://jlne.ws/oVucGa
Goldman Sachs eyes major cuts: report
AFP via Yahoo! News
Goldman Sachs is mulling drastic spending cuts as it braces for what could be one of its worst quarterly reports since it went public more than a decade ago, the New York Times reported Tuesday.
http://jlne.ws/o0Y49Q
Capital One to add 500 jobs in Delaware
AP via Yahoo! News
Capital One Financial Corp. will expand its Delaware workforce by 500 jobs with help from the state.
http://jlne.ws/prQBmz
Ranieri Real Estate Partners and WL Ross to Acquire Deutsche Bank Berkshire Mortgage
Business Wire
NEW YORK--(BUSINESS WIRE)--Ranieri Real Estate Partners LP and funds affiliated with WL Ross & Co. LLC have entered into a definitive agreement to acquire Deutsche Bank Berkshire Mortgage, a subsidiary of Deutsche Bank.
http://jlne.ws/pxWaNJ
Allfunds Bank Expands In The Middle East
Press Release
Allfunds Bank, the market-leading European B2B platform for the distribution of third-party investment funds, has established an office in the Dubai International Financial Centre.
http://jlne.ws/rknFoC
Berkshire to Buy Back Stock; Cash Tops $40B
By Andrew Frye, Bloomberg
Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), which has shunned buybacks for four decades, will repurchase shares for as much as 110 percent of their book value, saying the stock is undervalued after falling 17 percent this year. Berkshire jumped in New York trading.
http://jlne.ws/qpCvAW
Membership Changes Made to New York Fed’s Community Depository Institutions Advisory Council
Press Release
The Federal Reserve Bank of New York today announced several changes to the membership of its Community Depository Institutions Advisory Council (CDIAC).
http://jlne.ws/oqpeFR
Citi Launches CitiConnect, which provides connectivity for Treasury & Trade Solutions, Securities & Funds Services
Press Release
Citi's Global Transaction Services today announced the launch of its integrated enterprise connectivity solution, CitiConnect. This new connectivity offering provides a wide range of connectivity options to meet clients' unique business needs and provides greater choice and flexibility for integration with their back end systems.
http://jlne.ws/piZBWs
Eurekahedge launch new asset weighted ‘Mizuho-Eurekahedge Index’
Press Release
SINGAPORE (September 28, 2011) - Eurekahedge, a market leading alternative fund data provider, announced today that they are to launch a suite of new asset weighted indices, under the name ’Mizuho-Eurekahedge Index’.
http://jlne.ws/qOZrOe
Regulators
SEC probes banks over mortgage loans
By Kara Scannell in New York, Financial Times
The Securities and Exchange Commission is investigating Royal Bank of Scotland, Credit Suisse and other financial institutions for their handling of problem mortgage loans, according to public disclosures and people familiar with the matter.
http://jlne.ws/rlrPBO
NFA Signs Agreement With GFI Group To Provide Regulatory Services To GFI's Swap Execution Facility
Press Release
September 28, 2011, Chicago and New York - National Futures Association (NFA) and GFI Group Inc. (GFI) today announced that they have entered into an agreement that paves the way for NFA to perform regulatory services for GFI's swap execution facility (SEF).
http://jlne.ws/oJaNX5
SEC's Walter Wants SEC to Take Close Look at Munis
The Bond Buyer
Securities and Exchange Commissioner Elisse Walter called Tuesday for the commission to take a long-term, deep-dive look at the fixed-income market structure.
http://t.co/PfbrpoiW
New Capital Rules Likely for Banks
BY VICTORIA MCGRANE, WSJ.com
International regulators are set to rebuff heavy lobbying by banks and stick with a plan to require some of the world's largest financial institutions to hold extra capital, according to people familiar with the matter.
http://jlne.ws/r4Nl4F
Lagarde's Clout Limited, Despite Her Star Power
WSJ
Despite her new fame as the first woman to head of the International Monetary Fund, Christine Lagarde is learning that star power doesn't necessarily translate into political power on the world stage.
http://jlne.ws/rmxRWu
Only the IMF can solve the eurozone crisis
Financial Times
The world markets expected concrete steps from Washington over the weekend on how governments would resolve the European crisis. They did not get it. Instead, the International Monetary Fund’s policy setting body asserted that the “Euro-area countries will do whatever is necessary to resolve the euro-area sovereign debt crisis”. Unfortunately, this statement seems to be based more on hope and prayer than on evidence.
http://jlne.ws/mPHtwz
OTC
Credit-Swap Dealers May Hold Onto Risk for Weeks, Fed Study Says
By Matthew Leising
Credit-default swap dealers often hold onto risk from big trades for longer than many investors previously thought, which may complicate the task for regulators trying to impose new reporting rules in the vast, opaque derivatives market, a report shows.
http://jlne.ws/rjy7u8
NY Fed Study Finds Low CDS Trade Frequency
By Katy Burne Of DOW JONES NEWSWIRES
Trading in the credit derivatives market is less active than most liquid financial markets, suggesting dealers play a pivotal role in juicing flows, but the off-exchange contracts are mostly standardized, often resembling listed trades, according to a report released Tuesday by the Federal Reserve Bank of New York.
http://jlne.ws/nTNBnb
ISDA Comments on CPSS/IOSCO Consultative Report
The International Swaps and Derivatives Association, Inc. (ISDA) filed a comment letter on September 23 with the Committee on Payment and Settlements Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) in response to their consultative report on over-the-counter (OTC) derivatives data reporting and aggregation requirements.
http://jlne.ws/niRcEw
ISDA Pushes For Single Counterparty Exposure Repository
By Katy Burne Of DOW JONES NEWSWIRES
The International Swaps and Derivatives Association reiterated its call Monday for a single swaps data repository showing counterparty exposures, saying it could provide "an aggregated risk view for regulators." The idea was first put forward by the trade association earlier this month at its North American annual conference in New York.
http://jlne.ws/noTvUc
Dealers' CDS Coverage Doesn't Seem To Match Greek Exposure
By Katy Burne, Dow Jones Newswires
Dealer banks do not seem to have purchased enough insurance for the catastrophe that could be a Greek debt default in the coming quarters. A back-of-the envelope calculation using the maximum amount that derivatives dealers could collect on sovereign default insurance tied to Greece highlights how inadequate payouts could be when contrasted with the exposures of even a few banking institutions.
http://jlne.ws/nLVdVK
Swaps Clearing Revenue Could Match Energy Rise, Analyst Says
By Matthew Leising, Bloomberg
Revenue growth for swaps clearinghouse owners will take more time to materialize than previously thought, though longer-term it could match the increased sales of up to 27 times seen in energy clearing, according to Keefe Bruyette & Woods.
http://jlne.ws/mWfYNi
Global News
Spain, Italy Extend Bans on Shorting Bank Shares
By Ben Moshinsky, Bloomberg
Italian and Spanish financial market regulators extended temporary bans on short selling of financial shares that were introduced last month in a bid to stem market volatility.
http://jlne.ws/r5KcTm
Project Islamic Bonds give hope to Saudi market
By Jonathan Terry, Bikyamasr
Saudi Arabia is hopeful that Project Islamic bonds will increase with the launch of the first project this month. Issuers are looking to the launch of the sukuk as a means to diversify funding sources as global financial difficulties continue to cause problems for leading international banks.
http://jlne.ws/o0130m
Merkel hedges bets on Greece as euro pressure builds
By Stephen Brown and Madeline Chambers, Reuters
Angela Merkel worked to defuse revolt within her government on Wednesday, soothing fears Germany may be throwing good money after bad in Greece but acknowledging the concerns of those ready to humiliate her in a parliamentary vote.
http://jlne.ws/pceuJF
First Portuguese bank becomes a member of Eurex Repo
Press Release
Eurex: Eurex Repo, the leading marketplace for international, electronic repo trading and secured funding, today announced its further expansion in Europe. Banco de Investimento Global is its first Portuguese member. The bank has entered its first transactions via the Euro Repo and the GC Pooling markets. With this new customer, the total number of Euro Repo participants has risen to 87, thereof 74 use the GC Pooling market. Eurex Repo members are based in eleven countries, among them Germany, France, Great Britain, Netherlands, Spain, and – since this week – in Portugal.
http://jlne.ws/p5N1Gm
Russia's Federal Financial Markets Service Holds A Meeting With Financial Market Players And CBR Representatives
Press Release
On September 26, 2011 Mr Dmitry Pankin, Head of the Federal Financial Markets Service, held a meeting with participants of the financial market and representatives of the Central Bank of Russia to discuss operation of the Russian financial market in a highly volatile environment.
http://jlne.ws/n9q4tR
Greek parliament passes new property tax bill to boost revenue
Associated Press
Greek lawmakers approved a controversial new property tax Tuesday that aims to boost revenue as the country struggles to obtain a critical installment of international bailout loans that will prevent it from default
http://jlne.ws/pi3Fi9
IMF chief warns of not enough cash to bail out more nations
WalesOnline
Monetary Fund head Christine Lagarde has suggested the IMF may not have enough funds to bail out more countries if they are dragged into the eurozone debt crisis.
http://jlne.ws/oeMyOd
Medvedev Fires Russian Finance Minister for Insubordination
The New York Times
President Dmitri A. Medvedev fired Russia’s longtime finance minister for insubordination on Monday after the two had an icy confrontation on television that revealed the fault lines in a government where disagreements are usually kept strictly under wraps.
http://jlne.ws/nuMjLg
European Crisis Primer: Where Things Stand
By Terence Roth,WSJ.com
Here’s a quick look at where things stand with the euro-zone crisis for those who need help navigating this confusing and complex situation.
http://jlne.ws/qwN1yv
Germany downplays hopes of fast new crisis course
Boston.com
German officials on Monday downplayed prospects of any quick and dramatic change of course in the eurozone debt crisis, days before a parliamentary vote on beefing up the continent's rescue fund.
http://jlne.ws/nPsWSJ
World Bank: Eurozone Crisis Clouds Recovery In Emerging Europe And Central Asia
Press Release
Economic recovery is underway in the Emerging Europe and Central Asia (ECA) region, but at a slow pace and is at risk from the troubled Eurozone, according to the World Bank at a press briefing during the World Bank/IMF Annual Meetings 2011.
http://jlne.ws/ogfMY2
IMF’s Blanchard Says World Economy Has ‘Enormous Risks’ Now
By Bob Willis and Tom Keene, Bloomberg
European officials need to convince investors that European Union countries aren’t at risk of becoming another Greece as they forge ahead with their own deficit-cutting measures, said Olivier Blanchard, chief economist at the International Monetary Fund.
http://jlne.ws/mXWFYX
TREMONTI: Solution To European Crisis Is a Firm Germany
AGI
Italy's economics minister, Giulio Tremonti said in an interview with RAI that Europe is "the epicenter of the crisis. The solution will be found only if Germany takes a more firm position, if it has the courage, the force and vision to invest in Europe, for the good of Europe and for the good of Germany."
http://jlne.ws/n8Mgww
Moody's Downgrades 8 Greek Banks
ABC/AP
Moody's downgraded eight Greek banks Friday, citing their exposure to their government's bonds and the deteriorating economic situation in the country as it struggles to convince creditors it's doing enough to get more bailout cash.
http://jlne.ws/pRUENr
Cost To Insure French Bank Debt Falls 8% On Aid Talk
Mena Fn/Dow Jones
http://jlne.ws/nBHMKr
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