November 10, 2011
JLN Interest Rates - http://www.jlninterestrates.com
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Robert Pickel Appointed Chief Executive Officer of International Swaps and Derivatives Association
Conrad Voldstad to Serve as Special Advisor to the Board
NEW YORK, November 10, 2011 – The International Swaps and Derivatives Association, Inc. (ISDA) today announced that its Board of Directors has appointed Robert Pickel as Chief Executive Officer, effective January 1, 2012. Mr Pickel, who is one of the derivatives markets’ most experienced and accomplished executives, returns to the post after serving as the Association’s Executive Vice Chairman for the past two years.
Conrad Voldstad, ISDA CEO since November 2009, will continue to work with ISDA as a Special Advisor at the request of the board. Mr Voldstad, who has been a leader in the swaps and capital markets for three decades, will assist on strategic initiatives.
“Connie Voldstad is an industry pioneer, and the board and I are grateful for his tremendous contributions to ISDA and the OTC derivatives markets,” said Stephen O’Connor, ISDA Chairman and Managing Director, Morgan Stanley. “The board looks forward to working with Bob Pickel as ISDA’s CEO. Bob’s appointment, together with George Handjinicolaou’s recent selection as Head of Europe and Deputy CEO, and Connie’s role as Special Advisor, provide ISDA with a very strong management team. ISDA is well positioned to navigate the challenges of the next few years as we work to foster safe and efficient derivatives markets for all users of derivative products and move forward through a period of unprecedented regulatory reform,” he said.
“ISDA has a terrific history of working on behalf of the OTC derivatives markets and its contributions are unequalled among trade associations globally,” said Mr Voldstad. “I have been delighted to partner with Bob Pickel to address the key issues facing our markets. We have clearly made important strides and I am certain that Bob is the right person to lead the Association forward as it makes further progress toward its key goals.”
“Connie has been an ideal leader of ISDA. I have enjoyed working with him and I look forward to his continued contributions,” said Mr Pickel. “ISDA faces a number of opportunities and challenges ahead. Our focus is on addressing these issues and fulfilling our mandate by supporting derivatives markets across asset classes, geographies, and trading and clearing environments. To do this, we will continue to reach out to all types of market participants around the world.”
Prior to joining ISDA, Mr Pickel was assistant general counsel in the Legal Department of Amerada Hess Corporation, an international oil and gas company, from 1991 to 1997. He has also worked at the law firm of Cravath, Swaine & Moore in New York and London, where he represented ISDA in a variety of matters. Mr Pickel graduated from Williams College and received his law degree from New York University.
About ISDA
Since 1985, ISDA has worked to make the global over-the-counter (OTC) derivatives markets safer and more efficient. Today, ISDA is one of the world’s largest global financial trade associations, with over 825 member institutions from 57 countries on six continents. These members include a broad range of OTC derivatives market participants: global, international and regional banks, asset managers, energy and commodities firms, government and supranational entities, insurers and diversified financial institutions, corporations, law firms, exchanges, clearinghouses and other service providers. Information about ISDA and its activities is available on the Association's web site: www.isda.org.
ISDA® is a registered trademark of the International Swaps and Derivatives Association, Inc.
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Celent Says U.S. Triparty Repo Market Has Decreased To $1.6 Bln Because Of Financial Crisis, Weaker Global Economy
According to a new report from financial research firm Celent, the U.S. triparty repo market has decreased from a high of $2.8 billion on average daily collateral value in May 2008 to $1.6 billion in August 2011. This is due to the impact of the financial crisis and the weaker global economy on the repo markets, according to Celent.
Also noted in the report is that the reforms process has become significantly more complex than it was expected to be. Therefore, changes such as three-way trade confirmation and reduction in credit exposures would be delayed, with the latter expected to see fruition in 2012 at the earliest. Also, the measures would impose costs of implementation on the cash investors as well, which might deter participation in the market.
See the full report - Triparty Repo in the U.S.: Well Begun But Far from Done - here.
-- Christine Nielsen
Lead Stories
Top European Central Bank Official Lorenzo Bini-Smaghi To Resign
http://jlne.ws/vej71H
ECB policymakers reject bigger crisis role for bank
By Gilbert Kreijger and Paul Carrel, Reuters
The European Central Bank cannot intervene much more aggressively to tackle the euro zone debt crisis, three ECB policymakers from the bloc's core said on Thursday, pressing governments to act instead.
http://jlne.ws/tUmL0d
CFTC Commissioner Jill E. Sommers to Act as Senior Commissioner for the Agency For Matters Relating to MF Global, Inc. Bankruptcy
http://jlne.ws/vAfry1
**CN: As reported by JLN earlier this week.
Bernanke: Small Businesses Important To Economic Recovery
By Luca Di Leo and Jamila Trindle, WSJ.com
Small businesses are important to the economic recovery and to U.S. global competitiveness, Federal Reserve Chairman Ben Bernanke said Wednesday in welcoming remarks at a Fed conference on small business entrepreneurship during the recovery.
http://jlne.ws/v5NqrS
Bernanke urges banks to help small businesses
AP via Yahoo! News
Federal Reserve Chairman Ben Bernanke says small businesses are struggling to get loans more than two years after the recession ended. He says banks could help them by easing overly tight lending standards.
http://jlne.ws/upWv9X
FRB: Speech--Bernanke, Town Hall Meeting Remarks--November 10, 2011
It is an honor and a privilege for me to join the men and women of Fort Bliss today. As someone who puts a high value on public service, I want to thank the soldiers here for their service to our country and for helping to make the world a safer place. I admire your professionalism and dedication. I want to thank your family members as well; servicemembers could not achieve what they do without the support and sacrifices of their families. You should all be proud of what you have accomplished and what you stand for.
http://jlne.ws/tvnriy
Glitch from S&P caused France rating rumor
By Adam Button, ForexLive
S&P is saying France remains AAA with a stable outlook. It says some kind of glitch caused a change on its website that sparked the rumors. It says it’s investigating what happened.
http://jlne.ws/uTuEV1
Berlusconi wins vote, but will resign
UPI
ROME, Nov. 8 (UPI) -- Italian Prime Minister Silvio Berlusconi, who narrowly won a key budget vote Tuesday, will step down once economic reforms pass, Italy's president said.
http://jlne.ws/stFXBV
Lucas Papademos, Former European Central Bank Official, Named New Greek Prime Minister
Huffington Post
Senior banker Lucas Papademos was named Thursday to be the new prime minister of an interim Greek unity government that seeks to cement a new European debt deal and stave off national bankruptcy.
http://jlne.ws/uxehvO
Greek Prime Minister George Papandreou has agreed to step down
Schaeffers Research
U.S. stock futures are pointed south this morning. Despite last week's unexpected dose of promising domestic data, coming in the form of a drop in unemployment, investors seem unable to take their cues from anywhere but across the pond...( Read More )
http://jlne.ws/tBwdqs
Headcount continues to rise at global banks
Richard Partington, Financial News
Many banks said in the second-quarter results that they planned to rein in costs and cut back on the number of staff, due to an increasing regulatory burden and plummeting trading volumes amid economic uncertainty. However, there were almost 15,000 more staff employed by banks at the end of the third quarter than three months earlier, according to data compiled by Financial News on banks’ recently published earnings statements.
http://jlne.ws/sIdWQv
Alabama county files biggest municipal bankruptcy
By Melinda Dickinson, Reuters
Alabama's Jefferson County filed for bankruptcy court protection on Wednesday in the biggest municipal bankruptcy in U.S. history.
http://jlne.ws/sQHm1d
Jefferson County Bankruptcy Filing May Rekindle Municipal Credit Concerns
By Michael McDonald, Bloomberg
The bankruptcy of Jefferson County, Alabama, may keep municipal yields that are already high relative to U.S. Treasuries elevated as some investors flee tax- exempt debt, according to Michael Schroeder, president and chief investment officer of Wasmer, Schroeder & Co.
http://jlne.ws/u3xanP
Is changing a leader bad for the bond market?
Sebastian Walsh, Financial News
Greece has cast off George Papandreou. Italy is about to send Silvio Berlusconi packing. The latest changes at the top of eurozone governments, which have been incapable of managing their debt, may prove to be no bad thing. Historically, however, there is a notable - albeit unscientific - correlation between the countries currently facing the wrath of the bond market and the average term-length enjoyed by their political leaders in the modern era.
http://jlne.ws/sZ3sXj
Did MF Global "Embezzle" $633 Million Of Other People's Money?
Forbes
I'll tell you why I ask this probing question. I received an email this morning from a seemingly enlightened fellow quite conversant with the foibles of the futures trading business. He makes a quite convincing case for the ease by which MF Global might have grasped onto customers' cash to meet its own margin calls on trades going south or just to resolve trading it was doing in its own name. I ...
http://jlne.ws/uJ8plp
MF Clients to Get Cash at CME Once Exchange Verifies Transfers
BusinessWeek
Clients of MF Global Holdings Ltd., the futures broker that filed for bankruptcy protection last week, can access their frozen cash collateral at CME Group Inc. after the exchange verifies all traders' accounts have been transferred to new brokers.
http://jlne.ws/roI7SS
MF Global Creditors to Form Committee, Seek Recoveries
BusinessWeek
MF Global Holdings Ltd. creditors looking to recover from the eighth largest bankruptcy in U.S. history may sue the company's advisers, search for assets overseas and seek information from a probe into the commingling of customer accounts at the brokerage, a bankruptcy lawyer said.
http://jlne.ws/urqp81
Corzine Forgot Lessons of Long-Term Capital: Roger Lowenstein
BusinessWeek
Thirteen years ago, when the hedge fund Long-Term Capital Management was desperately negotiating with Wall Street banks for a bailout, Jon Corzine, the chief executive officer of Goldman Sachs Group Inc., called John Meriwether, LTCM's founder, and read him the riot act. Wall Street would invest, Corzine said, but "JM" would have to accept more controls, including strict supervision over his ...
http://jlne.ws/uWou5h
Chicago's Harris Bank plays role in MF Global mess
Reuters via Yahoo! News
(Reuters) - The hunt for the missing $600 million in customer money at MF Global Holdings Ltd may begin with Harris Bank, a Chicago-based lender that often holds client money for many large futures brokerage firms.
http://jlne.ws/vz3lCj
Malaysian Man Gets 10 Years in Federal Reserve Hacking Case
BusinessWeek
A Malaysian man who pleaded guilty to conducting a credit-card scheme and who was accused of hacking the Federal Reserve's computers got a 10-year prison sentence.
http://jlne.ws/tVWLZx
Economist sees restrained US recovery in 2012
Deseret News
A Federal Reserve economist believes the U.S. will continue to struggle to recover from the Great Recession in the coming year.
http://jlne.ws/vQ3Rzo
Unloved Treasury Notes Becoming New Favorite in Fed's Twist
BusinessWeek
The U.S. Federal Reserve is finding no shortage of demand for the short-term bonds it's selling to focus on longer-maturity debt, a sign that the strength in the economy seen in October may prove fleeting.
http://jlne.ws/sJTmNr
A Deep Dive Into The Fed's Latest Survey Of Loan Officers
Business Insider
Yesterday, the Federal Reserve released the senior loan officer survey. This is a very important document as it provides extensive detail about the condition of US lending.
http://jlne.ws/u8TwK9
Fannie Mae Seeks $7.8 Billion From Treasury Department After Posting Loss
Bloomberg
Fannie Mae, the mortgage-finance company operating under U.S. conservatorship, will seek $7.8 billion in Treasury Department aid to balance its books after reporting a third-quarter loss.
http://jlne.ws/vF1R6j
Treasury plans private sales of bank warrants rather than public auctions for smaller banks
Washington Post
WASHINGTON - The government plans to begin selling some warrants it received from bailed-out companies to financial institutions rather than offering the warrants in public auctions. The sales are part of the government's effort to recoup the costs of the $700 billion financial bailout. The Treasury Department said Tuesday that it will hold private sales to institutional buyers of warrants in ...
http://jlne.ws/uCnZLH
U.S. savings bonds to go paperless next year
Erie Times-News
Making their final appearance in Christmas stockings this season paper U.S. savings bonds.
http://jlne.ws/vHEZaL
U.S. recorded $1.3 trillion deficit in 2011
Los Angeles Times
The federal government recorded a $1.3-trillion budget deficit in the 2011 fiscal year, roughly even with the previous year's shortfall.
http://jlne.ws/urGhUi
Pimco: Europe, US Risk High Inflation in Medium Term
CNBC
European and U.S. inflation will rise in the medium- to long-term, according to Berdibek Ahmedov, manager for European and UK real return products at Pacific Investment Management Company (Pimco).
http://jlne.ws/s8fNnn
PIMCO's Bill Gross November Letter: Pennies from Heaven
International Business Times
The latest monthly missive from Bill Gross:Pennies from HeavenArticle IntroductionOnce interest rates inch close to zero and discounted future cash flows are elevated in price, it's difficult to generate much more return if economic growth doesn't follow. Equity markets should be dominated.
http://jlne.ws/uQThsJ
Paul Volcker says Volcker rule too complicated
Reuters via Yahoo! News
SINGAPORE (Reuters) - The Volcker rule is too long and complicated and financial lobbyists are to blame, said the man who gave his name to the new regulation on bank trading.
http://jlne.ws/seqxyq
MiFID Conference: No Area Should Remain Unregulated
More Than 100 Financial Experts Discussed The Developments In And Impacts Of The EU Directive At The Fifth Boerse Stuttgart MiFID Conference
Press Release
On Tuesday, 8 November 2011, Boerse Stuttgart hosted a conference on the EU Markets in Financial Instruments Directive (MiFID). This was the fifth such meeting in Stuttgart of representatives from supervisory authorities and banks as well as financial advisers and academics. More than 100 experts discussed the current state of affairs and the implementation of the Directive in banks, stock exchanges and authorities, focusing on a number of topics, including the European Commission’s proposals for revision of the Directive.
http://jlne.ws/uXKNdZ
Events
International Banking Conference 2011
November 10 - November 11, 2011
Banking conference with a global focus
http://jlne.ws/ow1CVU
Financial Issues And The Economy
November 13, 2011
Discussion of economic issues in Connecticut
http://jlne.ws/tp3UCB
Fourteenth Annual International Banking Conference
November 29 - December 1, 2011
Federal Reserve Bank of Chicago holds 14th International Banking Conference
http://jlne.ws/nTDrKO
7th Annual FIA Asia Derivatives Conference
November 29 - December 1, 2011
FIA looks at the futures and options industry in Asia
http://jlne.ws/vkOpsA
Exchanges, Clearing Houses & MTFs
NYSE chief confident over D Borse merger
FT Finance News (ext) via Yahoo! Finance
Duncan Niederauer, chief executive of NYSE Euronext, expressed confidence in the proposed tie-up with Deutsche Borse, dismissing some regulators' concerns about vertical integration as "idealistic". ...
http://jlne.ws/uosKj6
U.S. Clearing Houses Announce MF Global Bulk Transferee Confirmation Service
PR Newswire
CHICAGO, Nov. 4, 2011 /PRNewswire/ -- As part of the bulk transfer process for MF Global customer accounts and collateral held at U.S. derivatives clearinghouses, CME Clearing, ICE Clear US, The Clearing Corporation, KCBOT Clearing Corp., MGEX, NYSE Liffe US and The Options Clearing...
http://jlne.ws/rRl0MM
New York Portfolio Clearing Statement on Transfer of MF Global Customer Accounts
PR Newswire
NEW YORK, Nov. 4, 2011 /PRNewswire/ -- Today, New York Portfolio Clearing (NYPC) successfully completed the transfer of all of its MF Global customer accounts and specified amounts of associated NYPC-held collateral to other qualified NYPC clearing firms according to the authorization and...
http://jlne.ws/spaxDM
Firms & Banks
U.S. Bancorp Sued by Pension Fund Over Investor Losses on CDOs
American Banker
U.S. Bancorp was sued by an Oklahoma police pension fund over allegations investors in mortgage bonds were hurt by the bank failing to ensure that securities were backed by loans.
http://jlne.ws/s9YQfw
Bank of New York, MF Global, Bank Capital, Silver: Compliance
Bloomberg
Nov. 7 (Bloomberg)-- Bank of New York Mellon Corp. (BK) , the world's largest custody bank, is in early stage talks with federal prosecutors to settle accusations the bank overcharged customers for foreign-exchange trading, according to a person briefed on the discussions.
http://jlne.ws/sZFxMN
Berkshire Hathaway on Cusp of Oversight by Fed Under Risk Council Criteria
Bloomberg
Berkshire had $29.7 billion in credit-default swaps linked to its debt as of Oct. 28, putting it just under a $30 billion threshold proposed last month by the Financial Stability Oversight Council.
http://jlne.ws/tayEj7
Citigroup, BNY, News Corp., Union Bank, Goldman in Court News
Bloomberg
Citigroup Inc. (C) was accused of fraud by Moneygram Payment Systems Inc., the electronic cash-transfer business, in a lawsuit seeking to recover an alleged $140 million in collateralized debt obligation losses.
http://jlne.ws/sdGZoP
JPMorgan Sued by Louisiana Pension Over Treasury's Cuba, Iran Sanctions
Bloomberg
JPMorgan Chase & Co. (JPM) was sued by Louisiana 's pension fund for police, which said the bank's $88.3 million settlement with the U.S. Treasury Department stemmed from a breach of fiduciary duty by its directors.
http://jlne.ws/vDyasi
PIMCO Boosts Portfolio Management Analytics Team With Three New Hires
Marketwire Finance Press Releases via Yahoo! Finance
LONDON-- - PIMCO, a leading global investment management firm, has expanded its portfolio management analytics team with the appointment of three new investment professionals in its New York and London ...
http://jlne.ws/u8YUGK
Morgan Stanley accused over mortgage bonds
FT Finance News (ext) via Yahoo! Finance
Morgan Stanley (AMEX:MWD) revealed on Monday it is being targeted over alleged mortgage mis-selling by the same law firm that brokered an $8.5bn settlement with Bank of America (NYSE:BAC - News).
http://jlne.ws/s0X4Ng
State Street Renews Mandate with PIMCO for $1.3 Trillion in Assets
Business Wire
BOSTON--(BUSINESS WIRE)--State Street Corporation (NYSE: STT), one of the world's leading providers of financial services to institutional investors, announced today that it has been retained by Pacific Investment Management Co. (PIMCO) to provide an array of investment manager operations outsourcing services for $1.3 trillion in assets. This represents a renewal of one of the first and largest ...
http://jlne.ws/snXkiC
UBS to shut U.S. asset-backed securities unit: report
Reuters via Yahoo! News
UBS is shutting its asset-backed securities business in the United States, Swiss newspaper HandelsZeitung reported on Thursday without citing sources.
http://jlne.ws/rKvyrI
Citi, JPMorgan To Feel Biggest Bite Of Basel Capital Surcharges
Forbes
While the regulation seeks to ensure that bigger banks are better protected from failing, there is also a fear of banks hiding data about their actual risk levels in order to avoid higher surcharges.
http://jlne.ws/uhnQU4
Crédit Agricole Profit Hit by Greece
BY NOEMIE BISSERBE - WSJ
PARIS—Crédit Agricole SA on Thursday reported a 65% drop in third-quarter net profit, hit by a heavier-than-expected write-down on its Greek government bonds and further losses at its troubled Emporiki Bank of Greece unit.
http://jlne.ws/w4QCpS
HSBC Sees Bad-Debt Plague Rear Its Ugly Head Again
Dow Jones
Bad debts at HSBC Holdings PLC (HBC) soared to their highest quarterly level since 2009 as cash-strapped U.S. homeowners stopped making mortgage payments and customers from Brazil to Hong Kong felt the pinch from a weakening global economy.
http://jlne.ws/tq1R4O
Goldman Sachs Is Said to Raise $1.1 Billion From Sale of Its ICBC Holding
Bloomberg
Goldman Sachs sold 1.75 billion shares at HK$4.88 each, the people said, asking not to be identified because the details are still private. That is 6 percent below ICBC's closing price in Hong Kong.
http://jlne.ws/sz4lZS
Judge attacks SEC’s Citi settlement
By Kara Scannell in New York, Financial Times
A US judge has attacked Securities and Exchange Commission enforcement policies in a hearing which casts doubt on whether he will approve a settlement between the securities regulator and Citigroup over the sale of mortgage-related products.
http://jlne.ws/t25Ejb
Regulators
Federal Reserve Bank of Philadelphia President Charles Plosser said "Concerns the economy ...
Guru Focus
By FOX Business. Federal Reserve Bank of Philadelphia President Charles Plosser spoke with FOX Business Network's (FBN) Peter Barnes about the United States economy and whether the Federal Reserve will take further action to aid in the recovery. Plosser said "concerns we had in July, August, and September that the economy was at risk of falling off a cliff have pretty much dissipated" and thus ...
http://jlne.ws/sHpFka
Rosengren Says Federal Reserve Should Act to Bring Down Unemployment Rate
Bloomberg
Federal Reserve Bank of Boston President Eric Rosengren said the central bank should act to bring down "stubbornly, and unacceptably, high" joblessness that's been stuck near 9 percent or above since April 2009.
http://jlne.ws/uCKOMf
Kocherlakota Says Fed Should Make Public Contingency Plan
BusinessWeek
Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the U.S. central bank should develop and make public a contingency plan that would explain how it would react to developments in the economy.
http://jlne.ws/uWcO2P
Fed's Plosser: No need to dissent at Nov meeting
Market Watch
Philadelphia Federal Reserve Bank President Charles Plosser said Tuesday that he decided not to dissent from last week's policy statement because he supported the decision and didn't want to "re-litigate" past statements. Plosser voted against the Fed's August and September policy moves, one of three Fed regional banks presidents to do so, a rare high number for the ...
http://jlne.ws/sdsarJ
Video: Sumner Says Nominal GDP Target Can Save the Recovery
Wall Street Journal Blogs
Bentley University economics professor Scott Sumner says the Federal Reserve ought to be far more aggressive in stimulating the U.S. economy and explains how a nominal GDP target would be a better way to run monetary policy.
http://jlne.ws/sBHRbG
OTC
Euroclear Bank Arranges New Greek Government Debt Swap
Press Release
Euroclear Bank, which recently orchestrated the first swap of Greek government bonds between a number of consenting primary dealers in such securities, will run a second swap in such debt instruments next week.
http://jlne.ws/sRzS4y
Global News
Australian Consumer Confidence Jumped in November on Rate Cut
BusinessWeek
Australian consumer confidence jumped in November as the central bank's first interest-rate cut in 31 months lowered payments for mortgage holders, a private survey showed.
http://jlne.ws/rvhj0S
Swiss Banks, EU Ratings, Fund Reform, U.K. Tax, ICE: Compliance
Bloomberg
Patrick Odier, chairman of the Swiss Bankers Association, said an agreement between Switzerland and the U.S. to resolve a dispute over tax evasion by Americans with Swiss banks should be reached "as soon as possible".
http://jlne.ws/sKIz7m
Italian Bond Rates Rise to New Levels
New York Times
Bond rates are being driven to levels that earlier forced Greece, Ireland and Portugal to seek bailouts.
http://jlne.ws/ub1cDE
Premature for China to Reverse Monetary Policy: Experts
CNBC
China's benign inflation figures for October suggest that Beijing's measures to tame rising prices are working, but don't expect policymakers to reverse their monetary policy stance anytime soon, economists told CNBC on Wednesday
http://jlne.ws/sbweOk
Monetary Policy and Risk-Premium Shocks in Hungary: Results from a Large Bayesian VAR
IMF
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
http://jlne.ws/sPBx3J
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