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CEB plans to print more structured notes and may launch inaugural Sofr bond in 2026
Japanese firm plucks banker from UBS
The Americas derivatives community came together in New York to recognise and celebrate outstanding achievements across the industry
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The penultimate week of May started with the sovereign credit markets in risk averse mode. For once it wasn’t Greece that damaged sentiment but the two countries regarded as the safest of the “PIIGS” -- Italy and Spain. -
A marketplace for trading of OTC derivatives is a very peculiar and fascinating place these days. On the one side we have more or less vertically layered market structures where liquidity is provided by a limited number of market makers and there is a strong profit and loss element in the price spread. On the other side there are more flattened market structures where all participants equally contribute liquidity when providing liquidity and take it out when aggressing other dealers’ prices.
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The capital valuation adjustment risk calculation being introduced for bank trading risks under Basel III would roughly double the counterparty risk charge, according to a senior risk manager in New York.
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Firms selling constant maturity swaps spread ladder structures in Germany will have to up their disclosures to clients, including specific calculation formulas and the hedging processes involved. The tightening is a ruling by the Bundesgerichtshof, Germany’s federal court of justice.
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Sharon Bowles, chair of the European Parliament’s Economic and Monetary Affairs Committee, slammed Germany’s decision to ban naked credit default swaps trading on eurozone sovereign bonds, noting it was done for political purposes, not technical purposes, and that it was to get political votes through to approve an E.U. bailout regime. [Two weeks ago, the European Council ruled out a permanent ban on naked CDS trading on sovereign bonds, subsequently going against the wishes of Germany and the majority of the European Parliament.]
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—Peter Scherer, partner at Clifford Chance in Frankfurt, on the disappointing effects of the decision by the Bundesgerichtshof, Germany’s Federal Court of Justice, which could lead to future court cases in relation to spread ladder swaps.
