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◆ Public sector issuers embrace hedge fund bid... ◆ ... as they flex in the swap market ◆ Car makers welcomed back to bond market
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New contracts cannot yet be traded in US
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  • Spain was again the centre of attention this week due to two separate debt auctions. The sovereign’s bond yields surpassed 6% and its credit default swaps widened beyond 500bps--two important psychological levels.
  • The European Securities and Markets Authority is calling for a ban on credit rating agency employees participating in or influencing ratings if they own derivatives of the rated entity or have had a relationship with a rated entity or related party.
  • Australia will not directly or immediately mandate clearing of over-the-counter derivatives. It will let the market decide if a domestically-domiciled central clearing counterparty is needed, making it the first G20 nation to propose a market driven approach to mandatory clearing.
  • Regulators, including the Federal Reserve, have announced that the effective date of the Volcker Rule has been delayed two years until July 21, 2014.
  • The Australian government has released a report by the Reserve Bank of Australia’s Council of Financial Regulators with proposals for improving risk management of over-the-counter derivatives.
  • The potential cost of complying with new derivatives regulations is alarming European companies, with the price tag on risk-management tools possibly tripling.