Derivates : The Risk is shifting to CCPs

At the annual general meeting of the International Swaps and Derivatives Association in Singapore concluded

June's multi-colored eyes

yesterday,a group of panelists highlighted the lack of clarity over resolution for failed Central counterparty (CCPs) as a significant concern for the G20 objectives of eliminating systemic risk.

Central counterparty clearers stand to be the next “too-big-to-fail” institutions and could pose an acute threat to the
financial system if regulators stall on plans to manage the potential failure of a clearing entity.

There are two main processes that are carried out by CCPs: Continue reading “Derivates : The Risk is shifting to CCPs”

The case of Derivative On Its Derivatives : Credit Suisse

Zürich: Paradeplatz - Hauptsitz der Credit Suisse

There is a very interesting case thought of sharing across on the CDS market which may results in to two possible futures for the big banks. In one, the various efforts to “make banking boring” – more onerous capital and liquidity regulation, clearing and futurization of derivatives, bans on prop trading, calls to break up big banks, and so forth – would create amazing opportunities for people with the intelligence, motivation, and shall we say aesthetic sensibilities to find new ways to accomplish their non-boring goals within a shifting framework. Just like changes in the tax code create work for smart tax lawyers, so changes in banking regulation Continue reading “The case of Derivative On Its Derivatives : Credit Suisse”

Basel Becomes Babel

A very good analysis done on the various Basel agreements at Bloomberg here are some highlights from it.traders

The first Basel agreement on global banking regulation, adopted in 1988, was 30 pages long and relied on simple arithmetic. The latest update, known as Basel III, runs to 509 pages and includes 78 calculus equations.

The complexity is emblematic of what happened over the past four years Continue reading “Basel Becomes Babel”

Insight from Jim Rogers – The Commodities Guru

Writing about commodities market you can’t ignore the always charming commodities guru Jim Rogers. He started on Wall Street back in the 60s and went on to co-found the Quantum Fund with George Soros. Then he packed up and moved to Singapore, essentially shorting the west.

He is heavily invested in agriculture / gold and silver and training his children to speak Mandarin as he thinks balance of power shifting to Asia.

Here are his 12 quotes :