Is transparency a priority for you in 2010?
“Economists have for decades recognized that transparency benefits the marketplace. After the last great financial crisis facing the nation, President Roosevelt called for transparency in the futures...
View ArticleOn the value of historians as risk managers?
One of the casualties of the recent crash has been the decline in the credibility of the "quant". This may be no bad thing. Although, I certainly do not advocate giving up on quantitative methods,...
View ArticleCentral counterparty risk management – Not a universal solution to...
The credit crisis has pushed OTC derivatives and securities financing across the world to move to a centralized counterparty (CCP) approach where a single counterparty assumes the settlement and...
View ArticleThe importance of CVA in a post-crisis world (part one)
Credit Valuation Adjustment (CVA) has become increasingly important in the derivatives trading world since the crisis as a way to price in the cost of counterparty risk. As such, there are an ever...
View ArticleThe importance of CVA (Credit Valuation Adjustment) in a post crisis world...
There are two ways in which a bank’s counterparty credit risk management can be made more efficient through the use of CVA. First, the allocation of credit risk appetite and second, the management of...
View ArticleThe new OTC regulations and you
Over the next two to three years meat is going to be put on the bones of both the US ‘Dodd/Frank’ legislation and the proposals of the European Commission. The precise shape of the regulation is still...
View ArticleA Derivatives Delay? What to Do for the Next 15 Months
Last week we read that U.S. House Republicans voted to delay new derivatives rules by 15 months. Before we go into what this means for the derivatives industry, let’s take a look at how long 15 months...
View ArticleListed derivatives trading: Is your stomach strong enough?
Today’s futures commission merchants (FCMs) seem to be enjoying an almost permanent boom. March 2011 saw the highest volumes ever recorded across the world’s listed derivatives markets, excepting only...
View ArticleThe reign of derivatives
Investors and trading firms have always made the most of the symbiotic relationship between the equity and derivatives markets—devising strategies that exploit the strengths and weaknesses of each. The...
View ArticleWhat’s in a name? Regulatory vocabulary matters
Earlier this month, I attended SunGard’s London City Day, and the event’s many interesting conversations really got me thinking. The event’s sessions covered topics from OTC clearing to CVA, securities...
View ArticleHow financial exchanges could take a page from Diddy and Glee
Over the last few years, we’ve seen the evolution and ascendance of the “mash-up” in the world of entertainment. For those not readily acquainted with the term, a mash-up generally refers to the...
View ArticleEnterprise collateral management: It is time to act
If you are like me, you read everything you can, listen to the smart people around you, and talk to people about collateral management and the sea change that is coming. Consistently, I hear that...
View ArticleStatistical data and systemic risk – A view from the European Central Bank
Is it possible to predict future crises based on economic indicators from the past? Two ECB leaders, Andreas Hake, head of division, statistical information services, and Jean-Marc Israel, head of...
View ArticleWarsaw: Poland’s exchange to continue to flourish
Last month I visited Warsaw to moderate a panel at the FOW Derivatives World CEE (Central and Eastern Europe) conference. As ever it was a pleasure to be in Poland but this time it was particularly...
View ArticleLatin America: More than Brazil, taking the first steps
Beyond mature markets, investors and trading firms looking for opportunities should keep in mind the potential an emerging market offers. By that benchmark, then, Colombia, Peru, Chile and Argentina...
View ArticleWhere do exchanges go from here?
When was the last time a significant exchange merger came to fruition? Over the past year, all we’ve seen is the dissolution or outright rejection of prominent merger plans by regulatory bodies. The...
View ArticleHow accurate is your ‘independent’ valuation?
The 2008 market collapse was a watershed event highlighting the danger of poorly valued securities. It exposed the risk inherent in a single-source valuation model and made it painfully apparent that...
View ArticleThe promise of Malaysia
If any country epitomizes the wilder side of capital markets trading in Asia, it’s Malaysia. But there are signs that Malaysia is ripe for a bit of refinement, which would give this dynamic country the...
View ArticleThe buzz at PRMIA’s birthday bash
This month saw the Professional Risk Managers International Association (PRMIA) celebrate its tenth birthday in style at the Marriott Marquis in New York’s Times Square at its inaugural risk...
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