Moody’s Proposes New CCP Ratings

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Top Headlines

Moody’s Proposes New CCP Ratings – International Financing Review
Moody’s has proposed a new global methodology that will allow clearing members and end-users to assess and compare the soundness of central counterparty clearing house risk management practices.

Can FX Technology be Scaled Across Asset Classes? – Profit & Loss (free story)
Although some elements of FX technology can effectively be scaled across fixed income and commodities business lines, there are limits to how similar these asset classes will become.

Clearing: More for Less? – FOW (subscription)
How can central counterparties be best encouraged to mitigate the risks deriving from their growing importance to financial markets?

Risk Managers Go to Front Office in Hunt for Banking Talent – Financial News (subscription)
A talent war is under way. But rather than fighting off raids from other industries or rivals, banks are seeing top investment banking executives head to roles in their own risk management units.

Citigroup Executive Pressured Brokers Over Libor, Court Hears – Wall Street Journal (subscription)
A Citigroup executive in London said he was pressuring brokers to get other banks to lower their interest rate submissions, a London court heard Tuesday. Andrew Thursfield, a high-ranking executive in Citigroup’s London office, wrote to a colleague in September 2007 about plans to try to get the London interbank offered rate, or Libor, to a lower level.

Spoofing: Fighting Finagling in Financial Markets – Bloomberg
It’s a new crime but it isn’t new. It has a silly name but it’s no joke. Spoofing, a way to manipulate financial markets for illegitimate profit, is blamed for undermining the integrity of trading and contributing to the scariest crash since the financial crisis.

 

Regulatory News

FCA Accused of Wrongly Identifying Traders in Penalty Notices – Bloomberg
First there was one. Then three. Now the UK Financial Conduct Authority is facing nine lawsuits for improperly identifying traders in penalty notices, in what has quickly become a nightmare for the agency.

Trader Talk Is an Open Secret as US Probes Treasuries – Bloomberg
The US federal probe that ended last month with guilty pleas and $6 billion in fines from global banks began with an open secret – that currency traders there could talk to each other to coordinate trades. Now, the Justice Department unit behind those prosecutions is turning its sights on the $12.7 trillion US Treasury market, a world with some of its own open secrets.

Regulators Push to Sever Link Between Research and Trading – Financial Times (subscription)
Regulators are focusing on breaking the link between research and trading as they push for greater transparency on the cost of research. The changes could provide an advantage for independent firms.

UK Must Export the Fair and Effective Markets Review – Financial News (subscription)
We should applaud the publication of the Fair and Effective Markets Review. It is an initiative that is rooted in pragmatism and has engaged the industry right from the outset. The Bank of England, Financial Conduct Authority and the government are providing leadership to improve standards in the global market.

 

Company News

Barclays to Explore Use of Blockchain Technology – Profit & Loss (free story)
Barclays is working with Swedish start-up company Safello to explore how blockchain technologies can be used in the financial services sector, in another sign of the increasing legitimacy of the bitcoin-related technology by major financial institutions.

CME Clearing Europe Appoints Hasenpusch as CEO – Profit & Loss (free story)
CME Clearing Europe has appointed Tina Hasenpusch as chief executive officer, replacing Lee Betsill who is returning to Chicago as managing director of global clearing operations at CME Clearing.

Australia Regulator Blocks Interactive Brokers’ Currency Trading – Bloomberg
Australia’s securities regulator told Interactive Brokers Group to stop offering over-the-counter currency trading, saying the company doesn’t have the right license to operate in the nation.

 

Market Savvy  

Greek Deal or Not, the Euro is Now a Different Beast
Reuters
By invoking a Greek euro exit as a possible outcome of failed bailout negotiations, European governments have effectively rewritten a key tenet of the shared currency – and maybe even for the better.

Dollar Rally Fades Ahead of US Growth Data
Financial Times
The dollar was weaker heading into the final reading of US first-quarter growth on Wednesday, data which will help shape market expectations of the timing of a Federal Reserve rate rise.

Offshore Yuan Reaches Three-Week High Amid China, US Dialogue
Bloomberg
The yuan traded in Hong Kong rose to a three-week high after Chinese and US officials stressed the value of cooperation at an annual summit between the nations.

Peru’s FX Swappy Central Bank Intervention
Financial Times
On the one hand Peru’s dollarisation has benefited households because they can rely on the dollar to prevent wealth loss. On the other hand it has increased the country’s dependency on an external currency it can’t control, exposing the domestic economy to external shocks, diminishing the effectiveness of monetary policy and creating currency mismatches in banks’ balance sheets.

 

Press Releases

Japan Exchange Group: New Products and Trading Rule Revisions with Launch of Next Generation Derivatives Trading System
JPX has announced trading rule revisions and new products that will be introduced with the launch of the next generation derivatives trading system – Next J-GATE – scheduled for the middle of 2016.

 

Industry Events