Derivs - Credit

Traders in Asia are locking in recovery rates for credit default swaps on Aiful at around 40%.

Bank of America has moved Kwee Tee Lim from the firm’s London office to Hong Kong to run structured credit trading for Asia Pacific, a new role at the bank.

The majority of Economic and Monetary Affairs Committee members at the European Parliament and officials at the Internal Market and Consumer Protection Committee, are supporting Michel Barnier as the European Commissioner for Internal Market & Services.

A clutch of credit derivative product company-like firms are trying to get counterparty ratings. New entrants would be an about-face for the sector, which over the last 18 months saw several players fold from the sorts of asset-backed securities losses that brought down the monolines.

The Japanese Financial Services Agency has moved away from the idea of giving a future central counterparty clearer the power to decide on bankruptcy credit events.

The European sovereign debt market has been wracked with volatility in recent weeks. February began on a somewhat quieter note. But that changed on Wednesday with spreads spiking upwards once again, and unusually Greece wasn’t the catalyst. This time it was Portugal that was driving the market wider.

Société Générale Securities Services is expected to score several mandates in the coming weeks to provide valuation and collateral management services to Nordic pension funds.

The high number of loans eligible for delivery into the credit default swap settlement auction for Aiful is bad news for protection sellers, who may get lumbered with debt they may struggle to get off their books, according to Deutsche Bank credit analysts.

IntercontinentalExchange’s ICE Trust unit hosted a webinar on credit default swaps clearing Wednesday morning and some 300 buysiders tuned in.

Some traders in London believe five-year credit default swaps on Greece could surpass the 450 basis points mark this week, after the cost of protection on the sovereign hit a record high of 390bp today and kept climbing intra-day to 420bp.

U.S. House Financial Services Committee Chairman Barney Frank (D-Mass.) this morning trashed industry arguments that over-regulation of the financial markets, including derivatives, could lead to the next financial crisis.

Dealers have formed a new working group to help boost flows in the contingent credit default swaps market. The group, comprising 23 dealer-only members of the International Swaps and Derivatives Association, met Jan. 19.