Derivs - Credit

Regulators are increasingly requiring greater disclosure from banks before and after execution of trades to gain regulatory capital relief, such as those that involve derivatives, according to panelists at Citigroup's European Credit Conference in London Wednesday.

Lawyers say the exemptions for settlement of derivatives trades under a proposed Chapter 11-like law in Hong Kong are too narrow and could put swap counterparties in Hong Kong at a competitive and cost disadvantage.

Investors should outsource their collateral management operations in the post-reform OTC market, even if they feel it is a core competency, according to panelists at Financial Technology Forum’s OTC Derivatives Operations and Processing Conference today.

European politicians were at odds Tuesday evening over the ramifications of banning naked credit default swap trading, calling on regulators and the industry to provide more information on the topic before the Parliament moves forward with legislation aimed at short selling and CDS.

The China Banking Regulatory Commission may be loosening its planned restrictive approach to credit derivative trading.

National Association of Financial Market Institutional Investors has not mandated central clearing or banned naked credit derivatives in new Chinese credit derivative guidelines.

Rating agency officials and traders have questioned the European Commission’s idea to use rolling averages of credit default swap spreads or bond prices instead of ratings to define minimum credit quality for portfolios.

Credit Suisse has hired Jonathan Fletcher as head of investment-grade corporate credit trading, overseeing activity in both cash and synthetic credits.

The much touted Chinese twist on credit derivatives launched on Friday, with CNY1.84 billion (USD267,000) of notional being traded, according to the National Association of Financial Market Institutional Investors.

The much touted Chinese twist on credit derivatives may launch as early as tomorrow.

The spread on the Markit’s index of municipal credit default swap are at the tightest levels since early June after the U.S. Republican Party won control of the House of Representatives and expanded its presence in the Senate.

Credit default swap spreads on telecom companies and sovereigns are too far apart and will converge, according to Société Générale analysts.