Derivs - Interest Rate

The Hong Kong Monetary Authority is looking to implement the Basel Committee’s standardised approach to counterparty credit risk exposures, which will be applicable to exchange-traded derivatives, over-the-counter derivatives and long settlement transactions.

Market participants questioned the usefulness of trade reporting requirements, and how the reported data will be used by regulators, during a panel on regulatory developments at the International Swaps and Derivatives Association annual general meeting in Munich on Thursday.

Lloyds has hired three bankers for its expanding credit markets team in New York, as well as transferring another, Wesley Fallan, from its London headquarters, as it looks to win more business in the US in fixed income and securitization.

Market participants have called for risk management to be standardised across central counterparties.

RBS has hired Sophie Landry from Credit Suisse to become head of bank solutions for Germany, Austria and Switzerland, reporting to Pieter Paul Gerretschen, head of European rates sales and Patricio Silva, head of European asset-backed sales.

The 3% Basel III leverage ratio is driving a move towards standardization in derivatives that could result in a bifurcation of the market, according to market participants.

The Hong Kong Trade Repository will start the next phase of its roll out this September, adding 15 products in fx, interest rates and equity derivatives.

A weak trade report in China has triggered panic receiving in five year CNY swaps, which has driven some curve flattening momentum. Nomura has suggested positioning for a corrective flattening in the 1s/5s NDIRS curve, writes Deirdre Yeung of Total Derivatives.

The International Swaps and Derivatives Association is working with market participants to develop a standard initial margin model and is looking at the best ways of establishing a margin as a starting point.

The made-available-to-trade regulation in the US appears to have created smaller, less liquid pools for euro and sterling swaps on swap execution facilities relative to US dollar swaps, according to research from the International Swaps and Derivatives Association.

End-users have called for exemptions from margin requirements and for the right to trade over-the-counter products, warning that forcing derivatives to trade on an exchange could negatively impact market liquidity and many firms' growth prospects.

The costs of the trade execution mandate are outweighing the benefits it provides to market participants, according to Stephen O'Connor, chairman of the International Swaps and Derivatives Association.