Guest view: U.S. swaps need clearer reform July 25, 2014, BreakingViews By Luke Zubrod Clearer changes are needed for U.S. derivatives markets than the Dodd-Frank Act’s prescription. Four years after the regulatory reboot became law, many of the reformers’ hopes have been realized. Download Complete Article

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I hope you’re hungry, because Bloomberg is serving up the next financial scandal. Last summer we learned about LIBOR manipulation, and how various panel banks had attempted to nudge the daily LIBOR fixing up or down with contributed rates that were “suggested” by their trader-friends, who would benefit from the resulting small directional movements. By all accounts, the rate scandal was a very big deal, shaking faith in over $300 trillion in linked financial instruments, spurring numerous investor lawsuits, and leading to The Wheatley Review, with its call for overhauling the structure, ownership, and oversight of this benchmark interest rate. If you thought it would be hard to imagine a bigger scandal, then apparently we all just lacked imagination. The LIBOR scandal is but a mere Hors d’oeuvre, compared to the enormously large feast that is the fixing scandal in…

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The Uneven Global Playing Field of OTC Derivatives Reform June 2012, Risk Professional By Pam Brown Pam Brown discusses divergent regulations that are being adopted in the US and Europe which may significantly impact counterparty risk, liquidity and capital requirements. Download Complete Article Now

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Singapore has released its proposal for OTC derivatives regulatory reform. There is no trading requirement, but otherwise the proposed requirements are consistent with G-20 commitments. Noteworthy differences from US law include the following: 1) low use financial end users may be exempted from clearing requirements, 2) margin requirements for non-cleared trades appear to be focused exclusively on financial entities, 3) there is no real-time reporting requirement, and 4) the clearing requirement (albeit narrower in scope) is proposed to be retroactive. Given the concentration of derivatives activity amongst a handful of large banks, Singapore’s proposal addresses derivatives’ contribution to systemic risk, while being more flexible for non-financial end users, smaller financial end users and for financial end users who prefer to retain their freedom to determine the most efficient trading venue. Singapore currently holds 1.5% of the world swap market. Depending…

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