Derivs - Interest Rate

The scope of Japan’s domestic clearing obligations should be limited to yen interest rate swaps based on LIBOR, basis swaps and credit default swaps on iTraxx Japan, according to the International Swaps and Derivatives Association.

LCH.Clearnet has expanded what it will accept as collateral for SwapClear, its clearing service for interest rate swaps.

Deutsche Bank is said to be planning to reduce the size of its investment-banking staff in Japan by roughly one third as a result in a decline in deals and a sluggish economic outlook.

The Depository Trust & Clearing Corp. has launched its global, over-the-counter interest rates derivatives trade repository.

Clearing is among the top concerns for financial end users, according to Luke Zubrod, director of regulatory compliance services at Kennett Square, Pa.-based risk advisory firm Chatham Financial.

LCH.Clearnet’s SwapClear has scrapped a proposed interest-rate clearing mandate with Tokyo Stock Exchange’s Japan Securities Clearing after determining that the costs of the venture would outweigh the benefits.

The European Securities and Markets Authority along with national regulators should be given the appropriate resources and powers to enforce the requirements outlined in the updated Markets in Financial Instruments Directive, according to Jean-Pierre Jouyet, chairman of the Autorité des Marchés Financiers.

Clearing of over-the-counter interest rate swaps via Singapore Exchange’s central clearing counterparty DerivativesClear saw a steep decline in November to SGD4.5 billion (USD3.5 billion) from SGD11.4 billion (USD8.9 billion) in October.

Downgraded banks acting as interest rate swap counterparties to collateralized debt obligation and collateralized loan obligation issuers are in danger of losing extensive amounts of capital inflow.

A U.S. bank within the last week picked up at least USD500 million notional of U.S. dollar/yen calls with strikes at JPY85.00 expiring August of next year.

Investment funds are positioning for a eurozone break up via euro/Danish kroner puts, which have been seen strong flows.

Nicholas Fentem, the former global head of rates, hybrids and commodity structuring at Dresdner Kleinwort in London, has joined StormHarbour Securities as a managing director in rates structuring.