“The MSP definition is not industry-specific and could apply to any company in any industry whose degree of hedging activity is roughly deemed systemically significant,” explained Luke Zubrod, regulatory advisory services director at swaps consultancy Chatham Financial. “The hope would be that it doesn’t affect too many industrial companies, but it could, depending on where the SEC and CFTC set thresholds around substantial positions…
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“Over-the-counter (OTC) derivatives are perhaps the most feared and despised of all financial creations, even more than sub-prime mortgages. After all, Warren Buffet famously referred to them as “financial weapons of mass destruction.” Though few know it, Americans’ everyday lives are touched by the hidden hand of OTC derivatives…
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“There was a need for expertise on a highly technical subject matter and not a lot of desire to gain that expertise from the banks,” said Zubrod, a director at Chatham. “The [new unit] translates a Washington-focused exercise into one specifically focused on the business community…
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“There was a need for expertise on a highly technical subject matter and not a lot of desire to gain that expertise from the banks,” said Zubrod, a director at Chatham. “The [new unit] translates a Washington-focused exercise into one specifically focused on the business community… 
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“There is something for everyone to be focused on – no one [in financial -markets] can say: it does not apply to me,” said Luke Zubrod, director at Chatham Financial, an advisory firm… 
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“The biggest concern in the end-user community is to not have to divert working capital from their businesses,” said Sam Peterson, senior adviser at Chatham Financial, which advises companies on interest-rate and currency hedging practices…
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Banks hedging their true exposures using CDS would likely be unaffected. “They can do anything for hedging and nothing for speculative exposure purposes,” said one source familiar with the developments. “Essentially they created a framework in which they narrowed the application of the provision only to those products that are considered especially risky and preserved those that were considered normal banking products,” explained Luke Zubrod, director at independent risk advisor Chatham Financial…
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Only two major strokes are really needed when it comes to derivatives, not hundreds of pages worth of new regulations, according to Dave Hall of end-user-centric derivatives trading firm Chatham Financial. The firm has been active in trying to shape policy, and Mr. Hall has testified before the House…
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Luke Zubrod, a director at interest rate and currency risk management adviser Chatham Financial, said that although some of the entities still exist, many were not used much any more. “Those that are still used as counterparties to commercial transactions appear to be primarily focused on options, rather than taking on credit risk for transactions like interest rate swaps,” he said… Read More

Chatham Financial, an independent risk adviser, estimates that 40% of the first group offer swaps, and virtually all of the ones in the second group do… Read More

In 1883 sugar farmers introduced the mongoose to the Hawaiian Islands to combat a significant threat to their crop – a growing rat population. This would prove a disastrous decision. The mongoose did not… Read More

With all the doomsday predictions of how derivatives reform will impact the financial industry, it’s worth asking how much the measure currently being debated in Congress will cost. The short answer: “It’s difficult to say,” according to Luke Zubrod, a consultant with Chatham Financial who works with derivatives end-users… Read More

David Hall of Chatham Financial, the interest rate and foreign-exchange risk management advisers, said: “If you don’t get the exemption, you’re going to be forced to abide by all the most stringent clearing margin and trading provisions… Read More

David Hall has recognized this problem in the legislation for end-users of derivatives. He’s the chief operating officer of Chatham Financial, the largest independent interest rate and foreign exchange risk management advisory. Hall says: “The general concept is right in the Senate bill in that it tries to catch the systemically risky players… Read More

Chatham Financial has put together a list of important issues that still must be addressed in the derivatives title of this bill. These changes are related to tying collateral charges to risk of loss, protecting end-users adequately in the bill’s definitions, ensuring there is sufficient grandfathering to prevent credit events due to a retroactive law and not requiring banks to spin-off their swaps desks, which would require hedging transactions to occur in a limited, non-competitive and risky environment amongst a few investment banks… Read More

The first task was bringing treasury pros together with lawmaking pros to help policymakers differentiate hedgers from speculators, reports Luke Zubrod, director of the U.S. public real estate advisory practice at Chatham Financial in Kennett Square, Pa. Chatham was invited to explain to congressional staffers how corporations used derivatives to hedge and what would happen if these tools were taken away… Read More

“This would be a sweeping change to our financial system and it was introduced 11 days ago without a hearing, without a study on its impact,” said Luke Zubrod of Pennsylvania-based Chatham Financial Corp., which advises more than 1,000 firms on derivatives… Read More

European policy makers have joined those in the UK in asserting that manufacturers, energy producers and hospitals should not be subject to the same derivatives regulatory regime as large financial institutions. At the same time, the Obama administration has said that it would “fight hard to oppose” provisions that clearly differentiate such companies – known as “end users” – from the likes of AIG and Goldman Sachs. So this begs the question: “What does Europe know about derivatives reform that the White House doesn’t?” … Read More

Interest rate, foreign exchange and commodity price fluctuations can disrupt company profits and cost structures, Michael Bontrager, Founder and CEO at Chatham Financial highlights. A solution provider at the marcus evans CFO Summit XX Spring 2010, Bontrager comments on the risk management strategies that could make or break an organization… Read More

“If banks are forced to get rid of their swaps businesses, then there may be no one for end users to do their swaps with,” said Hall, chief operating officer of Chatham Financial, an interest rate and currency risk management advisor… Read More

David Hall, chief operating officer of Chatham Financial, which advises industrial companies on risk management, said the bill gave a clearer exemption to corporate end-users from new restrictions than previous texts… Read More

On March 15, Senator Christopher Dodd, (D.-Conn.) presented an updated version of Restoring American Financial Stability… Read More

In the war to rid the financial markets of the sort of unchecked risk that brought the global economy to its knees… Read More

The saga involving the proposed regulation of over-the-counter derivatives, as covered in this post. Read More