Derivs - Credit

With the U.S. Senate bill finalized, players throughout the industry say their final hopes for less draconian rules depend on the conference to merge the bill with the House version, and on federal regulators charged with implementation.

European hedge funds and asset managers want to use derivatives more this year to access liquidity, but they want to do it on exchange rather than over the counter, according to a recent study by the TABB Group.

BNP Paribas has hired Angela Deering as a director in flow credit trading in New York.

Edouard Vieillefond, head of regulatory policy and international affairs at France’s Autorité des Marchés Financiers, told Derivatives Week this morning that although the regulator is in favour of curbing speculation, Germany’s decision last night to ban naked sovereign CDS trading will be extremely challenging to enforce.

End-users are hoping for the best, but preparing for the worst. Over the next week they will be pushing harder than ever for a stronger exemption from clearing and margin requirements, focusing their efforts on the clarification of vague definitions in the current Senate bill, slated for a vote next week.

Clearinghouses will be required to set up a dedicated subsidiary in Japan in order to conduct credit default swap clearing business onshore with a Japanese counterparty under new regulation passed last week by the Japanese parliament.

BlueCrest Capital Management, one of the largest hedge-fund firms in Europe, has added three senior credit traders in New York.

The OTC Derivatives Regulators’ Forum is preparing to launch in the next month or two a Web site where it will describe in more depth what projects the group is working on and give information about its formation and membership.

Michel Barnier, the European Commissioner for Internal Market and Services, today called for greater transparency in sovereign credit default swap trading rather than an outright ban.

Increasing flows of credit default swaps in Korea, driven largely by the uptick of credit-linked notes sold in the country, has prompted rating agency Fitch Solutions to introduce a pricing service for Korean CDS.

The TMX Group, is looking into dark liquidity to boost its market share in the equities and is also considering using its clearing operation and potential regulatory reform to leverage a greater presence in the over-the-counter derivatives market.

After a period of unprecedented credit deterioration, sovereign credit default swap spreads rebounded sharply this week as investors digested the impact of a dramatic intervention.