Week InReview
  • As of January this year, 128 bond trading platforms were available to fixed income market participants as traders seek new technology to improve connectivity and electronic trading
  • This boom in innovation has seen traders readily embrace electronic trading and a variety of alternative protocols offered to meet bond market needs
  • However, IOSCO explained this has led to fragmentation and difficulties for those trading the bond market, highlighting the importance of connectivity
Source:  XKCD
Fri Feb 17, 2017
Let's recap
In case you missed it . . .
Fed Chair Janet Yellen, in response to a warning from a U.S. congressman to halt global regulatory talks, said in a letter the Fed has the authority and responsibility to consult with its foreign counterparts and does so to benefit the United States (Feb 14)

Swap dealers get CFTC collateral relief
Swap dealers get six-month 'grace period' on collateral rules for uncleared swaps; dealers need extra time to implement new procedures, CFTC staff says (Feb 13)

Don't take your foot off the gas: Dodd Frank may be under fire but compliance officers can't let up
It's business as usual for compliance officers at SEC registered investment adviser firms because few, if any, of the announced changes would provide relief from many annual reporting obligations (Feb 13)

Independent agencies declared exempt from Trump's deregulation order
The  Office of Information and Regulatory Affairs (OIRA) finally put to rest questions around the requirements of independent agencies under the recent presidential memorandum and executive order (Feb 13)

Mid-life crisis looms for endangered research analysts
Tighter regulations and falling profits have forced financial institutions to part ways with their many economists, bond strategists and stock pickers (Feb 12)
Financial rules overhaul
A slow process, says Senate's Crapo
(Feb 15) Senate Banking Committee Chair Mike Crapo (R-Idaho), at a banking conference in Washington, said making changes to financial regulations will be a slow process because of congressional procedures, a long list of legislative priorities, and a "toxic" climate in the Senate. Some highlights:
  • It could be at least 12 to 24 months before financial services bill advances
  • Wants committee to focus on matters such as lending in local communities, the $50 bln threshold for deeming banks systemically important, Basel capital standards, housing finance, and Financial Stability Oversight Council transparency
  • Naming a Fed vice chair of supervision will help Republicans advance financial rule changes
  • Housing-finance reform is a "high priority" for the Trump administration; there isn't much they can do without Congress to change structure of Fannie Mae and Freddie Mac
  • A bipartisan bill is most the likely vehicle for changes, though he doesn't rule out riders to appropriations bill
Volcker impact on bond liquidity
No action planned: Yellen
(Feb 15) In House testimony, Federal Reserve chair Janet Yellen said the Fed doesn't plan to act on possible bond liquidity issues that may have arisen due to the Volcker Rule.  Evidence on the rule's impact "is conflicting," and it is "difficult to come to a conclusion," Yellen said, and a Sep. 2016  Fed paper about the impact of the Volcker Rule on bond liquidity was the work of a staff member, not the full Fed Board. In that paper, the  Fed flagged problems with Volcker, concluding that institutions constrained by the rule "have decreased their market-making activities" and that bond markets show less buying and selling when stressed.
Binge reading disorder
Hand-curated, chosen with love
The importance of bubbles that did not burst
Some booms do not go bust, making it harder to spot the ones that will

Putin's central banker is on a tear
When Elvira Nabiullina needed backing for a new phase in her crackdown - one that could hit some of Russia's biggest lenders - she went straight to the top. 'I agree,' said the president.

Blockchain, Burning Man and the future of governance: a conversation with John Clippinger
Clippinger's wider interest is how humans organize - from contract law to Burning Man - and how technologies like blockchain enable new approaches to business and government
- Forbes