Clearing

Clearing Drives Swaps Notional to US$693trn

A global effort to overhaul the over-the-counter derivatives market has failed to deliver a reduction in the gross notional volume of contracts outstanding. IFR: Clearing Drives Swaps Notional to US$693trn.

LCH Teams Up with Cantor to Launch Centrally Cleared CFD

Clearing house LCH.Clearnet and investment bank Cantor Fitzgerald have launched the first centrally cleared OTC contract for difference (CFD) in Europe. The Trade: LCH Teams Up with Cantor to Launch Centrally Cleared CFD.

CME Disappoints on Clearing Revenues

CME Group, operator of the world’s largest US futures exchange, disappointed investors with lower than expected over-the-counter clearing revenues even though third-quarter profits rose 8 per cent as it increased its market share in interest rate swaps. FT:  CME Disappoints on Clearing Revenues.

CME Threatens to Flee US as Regulators Challenge Liquidity of US Treasury Collateral

US CCPs may need committed funding to count US Treasury collateral as liquid. Risk: CME Threatens to Flee US as Regulators Challenge Liquidity of US Treasury Collateral.

SGX Proposes to Remove Unlimited Liability for CCP Clearing Fund

Singapore CCP looks to strengthen its risk management approach. News Blur: SGX Proposes to Remove Unlimited Liability for CCP Clearing Fund.

Collateral Management

A Look at the Impact of a Government Default on Collateral Markets

An article in efinancialnews.com by Anish Puaar called “Safety of collateral questioned after US Woes”, published Nov. 4th, makes some interesting points about the knock-on effects of a US government default on the use of UST collateral in OTC derivatives markets. We unpack some of what the article says. Securities Finance Monitor: A Look at the Impact of a Government Default on Collateral Markets.

The FSB Announces the 2nd Phase of their Study on Securities Financing; This Time It's All About Haircuts

The FSB has announced the second phase of their study on haircuts and securities financing. This part will have a narrower focus than their earlier report – its just about haircuts. But interestingly enough, they will talk to a broader cross-section of actors in the market. We have some thoughts. Securities Finance Monitor: The FSB Announces the 2nd Phase of their Study on Securities Financing; This Time It's All About Haircuts

Safety of Collateral Questioned After US Woes

The global financial services industry has long feared a regulatory-driven collateral shortage, but the issue has gained new impetus following the US debt ceiling crisis. Financial News: Safety of Collateral Questioned After US Woes.

The $2 Billion Margin Call

The fear on Wall Street of a US default last month led global clearing houses to hike the margin rates for cleared swaps. From a systemic risk perspective, their reaction is an indication of things to come. Tabb Forum: The $2 Billion Margin Call.