Derivs - Credit

European supervisory authorities’ open letter to EU commissioner Jonathan Hill requesting he rethink and minimise a damaging delay over approving swaps margin rules demonstrates that Europe needs to overhaul its process or putting together regulation in favour of a more coordinated approach.

A joint committee of European financial regulators has written to EU Commissioner Jonathan Hill urging him to minimise any delay by the European Commission in implementing margin rules on uncleared swaps.

Dealers will hold an auction to settle credit default swaps referencing Portugal Telecom International Finance, after the International Swaps and Derivatives Association’s (ISDA's) EMEA Determinations Committee ruled that a bankruptcy credit event had been triggered on the contracts

Merger talks between the London Stock Exchange Group and Deutsche Börse remain on course despite the United Kingdom’s recent vote to leave the European Union, with LSEG shareholders on Monday almost unanimously approving the plans. But comments from the German exchange this week suggest there are tough talks ahead on where to locate the merged group's holding company.

The land grab for financial supremacy in Europe is under way. After the UK voted to leave the EU last week, rival financial centres are lining up to snatch business form London, and one of the early battlegrounds is clearing euro-denominated business. Dan Alderson reports.

Those of us who stayed up to watch the Brexit television coverage knew that in a few hours’ time the June 24 trading session would go down in history. The mainstream media were inevitably obsessing about the post-Brexit collapse in sterling, but the credit markets were focused on the Markit iTraxx indices. Big moves were expected by market participants, and they weren’t disappointed.

Germany’s financial regulator this week cast further doubt on the planned merger between Deutsche Börse and the London Stock Exchange by objecting to a London headquarters for the group in the wake of the United Kingdom’s vote to leave the European Union.

Clearing looks set to be one the first areas of London’s dominance as a financial centre to be challenged, following last week’s vote to leave the European Union, with uncertainty over the future of euro business putting pressure on central counterparties based in the UK to relocate their clearing operations elsewhere.

US and Asian regulators should hold fire on imposing margin rules on uncleared swaps to allow Europe to catch up, said the International Swaps and Derivatives Association (ISDA).

What began as a week of turmoil for European credit and equity markets amid Brexit uncertainty is ending on a full circle return with no immediate signs that that the UK will begin a formal exit from the EU soon and amid rumours on Thursday that the ECB will relax the terms of its bond repurchase programme.

The UK’s decision to quit the EU has dealt an immediate hit to currencies, credit and equities, but also puts key components of the European derivative market in doubt.

Ten banks participated on Wednesday in an auction to determine settlement prices for credit default swaps on Norske Skog, the Norwegian publishing paper manufacturer, after it triggered a restructuring credit event in April.