Not many people know about the convictions behind how MF global failed. This is how the destruction process works @ Wall Street and MF Global bankruptcy was one of the example of it.
They were very bad in Europe; leveraged 33:1 so there is no space of error when the firm is leveraged like that.
The three lessons that are can be shared from MF Global’s death:
- Accounting loopholes have to be closed and oversight improved.
- Non-bank financial firms should have a lead regulator.
- Rule-writers should consider “non-systemic” firms as well as “too big to fail” banks.
But there is a contrast view to it:
More regulation, more rules, Dodd Frank/EMIR/FATCA and to no purpose at all.
A banker wants to bet his firm on the direction of sovereign debt. If successful, we call him Soros and pat in him on the back. And if not, the firm is closed down. Regulations were pointless, because no rule book can reign in human ingenuity. Continue reading “How MF GLOBAL Failed”
If you are deployed in the Investment banking space front office, middle office or back office, you should have come across phrases such as “collateral liquidity crunch” and “collateral scarcity”, and new terms such as “collateral transformation” and the “collateral upgrade trade.
Came across an interesting paper on Collateral management sharing some of the highlights, need for collateral management, how we got there, some of the Best Practices to collateral.
The 2008 financial crisis and the role derivatives played in it compelled regulators to re-examine and reengineer the entire derivatives market structure. The disruption to the derivatives market is already underway, primarily as a consequence of behemoth regulations such as the Dodd-Frank Act (DFA), European Market Infrastructure Regulation (EMIR), Basel III and others. But new global regulations are not the only driver. Continue reading “What is Collateral Management”
Initially thought of sharing my review on the Wolf of Wall Street today, but I do not wanted to break the series of the EMIR regulations that we ended up yesterday choosing the Trade repositories (TR). Now we stand at the point from the Question no.4 of yesterday’s post.
a) Choose a 3rd Party Provider, following your decision to delegate
b) Decide which TR you will connect to, if you will self-report
c) Liaise with your counterparties to find out their requirements, if you will delegate reporting to them.
Question 4: What are the criteria to be taken into account before choosing my 3rd Party Providers?
The 3rd Party Provider should help you adapt to the new workflow for Trade Reporting as it will serve as the go-between with TRs. Continue reading “Regulations 🙂 EMIR Trade Reporting – 2”
As we know this will be the year of Regulators across the globe, the deadlines are approaching to implement the regulations and some regulations already imposed on the financial industry. Trade Repositories to offer their services to Europe’s entities and ESMA’s updated version of EMIR implementation timeline showed the 12th of February as the start date for trade reporting, for all derivative asset classes, for both ETD and OTC derivatives.
Addressing few questions today and will continue to address in the future posts.
Question1: What’s your budget for Regulatory projects? Continue reading “Regulations 🙂 EMIR Trade Reporting – 1”
Here are 10 questions that you should know if you are based in the European Economic Area and trade in derivatives, whether on-exchange or “over-the-counter” (OTC), then you will be impacted by EMIR. This could include real estate investors who use derivatives and swaps (e.g. hedging interest rate and currency risks) to reduce risk rather than for speculative purposes. The exact impact of EMIR will depend on the type of firm, as well as the level and type of derivative exposure of the particular firm.
- Should I care about EMIR? (I should hope so)
- What are the requirements under EMIR? Continue reading “What is EMIR and 10 things about it”