Derivs - Credit

Japan will be ready to clear credit default swaps by the second quarter of next year, an official involved in the implementation of a Japanese clearing platform, told Derivatives Week.

Some derivatives trading could become too expensive for sellsiders outside the big five under the swaps desk spin-off provision in the U.S. Dodd-Frank bill.

Warren Buffett’s Berkshire Hathaway may have to post USD6-8 billion in additional collateral for its derivatives book, according to a research report by Barclays Capital.

U.S.-based derivative-using hedge funds have been seen heading to Ireland, local attorneys report. Some of the moves are being driven the U.S. Financial Reform Bill which will make trading over-the-counter derivatives more costly.

The planned pilot project to trade credit default swaps in China will still happen this year, according to a well placed official in Beijing.

Last week there seemed to be a consensus among the commentariat that BP PLC’s five-year spreads were overshooting significantly. A level of 500bp was outlandish for a AA credit.

The Securities and Exchange Commission’s structured products unit will likely hire three industry professionals next month, Kenneth Lench, head of the unit within the Division of Enforcement, told Derivatives Week.

European lawmakers have proposed a ban on financial services employees being allowed to hedge their bonus payouts. The hedges popped up last season when deferred bonus payouts were being pushed by regulators and staffers.

BNP Paribas has hired Barbara Chapman as a director in the flow credit trading based in New York. She will cover the utility and energy sector and report to Jared Epstein, head of flow credit trading in the Americas.

Increased hedging by banks has been an influential factor behind moves in sovereign credit default swap spreads, according to the Bank of England.

Recently released data on single-name credit default swaps reported trades that actually transferred risk within the market. Some industry players say it left out pertinent information, while others say it was streamlined specifically to prevent skewed results.

Aurelien Bessot, the ex-head of exotic equity derivatives trading at Bank of America, has launched hedge fund boutique FM Capital Partners in London.