Week InReview

Talking about derivatives

"Reforms to OTC derivative markets are replacing a complex and dangerous web of exposures with a more transparent and robust system that better serves the real economy. Global banks now hold over $800bn more collateral against their OTC derivative counterparty exposures, and the coverage of exposures by collateral has doubled to nearly two-thirds. More resilient central counterparties are reducing the risk of contagion to the banking sector from the failure of individual institutions. FSB jurisdictions need to do more, however, to address remaining legal barriers which are preventing authorities from fully realising the benefits of trade reporting."

Mark Carney, Chair
Financial Stability Board
Fri Jun 30, 2017
Let's recap
In case you missed it . . .
Spending bill would repeal Volcker Rule, overhaul CFPB, incorporate policy changes; legislation keeps SEC funding essentially flat (Jun 28)

Labor's Alexander Acosta and SEC's Jay Clayton tell lawmakers they will work together on fiduciary rule
In separate appearances before Senate panels, the regulators stressed the cooperation that Republican legislators and opponents of the DOL fiduciary rule are demanding (Jun 27)

Insight into shadow banking still limited: Fed's Fischer
Regulatory capital at big banks at multi-decade highs; r egulators have less insight into shadow banking risks, Fed vice chair says (Jun 27)

Swaps compression hits US$1 quadrillion
Derivatives users have eliminated more than US$1 quadrillion of notional outstanding in over-the-counter swaps; comes after banks embraced compression in response to stringent leverage ratio treatment under Basel III, tearing up superfluous contracts to slim down bloated derivatives portfolios (Jun 27)

Dark-pool clampdown seen ensnaring 74% of European equities
MiFID rules capping dark-pool trading will affect funds; limits impacted 94% of FTSE 100 stocks (Jun 26)
The Cyber Cafe
Cybersecurity news every Friday.
Could your old eMails still pose a security threat?
Email is now the most preferred entry method for hackers, but consumers shouldn't just be concerned about receiving new email phishing and impersonation scams. Sometimes hackers lie in wait.

Basic cybersecurity hygiene tips are ransomware vaccine
Following basic cybersecurity procedures can protect companies against ransomware; m uch of the damage from global ransomware attack was easily preventable. (Jun 28)

Bankers are hiring security experts to help get deals done
Global threats, recent WannaCry ransom attack fuel awareness; cybersecurity will increasingly become part of deal-vetting.
Data gaps in $483 trillion swaps market
FSB cites 'significant challenges'
(Jun 29) Global regulators say that, while progress has been made to reduce risk,  data gaps remain in the $483 trillion derivatives market nearly a decade after the financial crisis, and call for action to improve access to and the quality of data in 2018.  The Financial Stability Board said it's important to complete work quickly to resolve the "significant challenges" in a market that was blamed for helping fuel the crisis.  The FSB's issues will be included in a review of the derivatives market at the G20 summit in Hamburg, Germany on July 7-8.
FSOC's insurance expertise
Bipartisan Senate bill says keep it
(Jun 28) -- Senate Banking Committee chair Mike Crapo (R-Idaho) and ranking member Sherrod Brown (D-Ohio) introduced legislation to ensure that an insurance expert remains on the Financial Stability Oversight Council. At present, FSOC's independent insurance member can only  serve the length of the term, with no contingency provision should no new independent insurance member be confirmed.
Binge reading disorder
Hand-curated, chosen with love.
A weekend in Texas with ZeroHedge readers
Part 1 of a three-post series about the 'ZeroHedge Live Fight Club and Symposium' in Marfa, Texas.

Debt-trading dies slowly one boring day after another
It's a different type of challenge when nothing happens.

How the Fed serves U.S. foreign intelligence
The Federal Reserve houses the assets of other central banks. Senior officials from the U.S. Treasury and other government departments have tapped these otherwise confidential accounts to analyze the asset holdings of the central banks of Russia, China, Iraq, Turkey, Yemen, Libya and others.