Derivs - People and Markets

Increased hedging by banks has been an influential factor behind moves in sovereign credit default swap spreads, according to the Bank of England.

The USD700 billion stable value fund market, which covers some 30 million investors, could become effectively off limits to derivative bankers.

The European Securities and Markets Association will be given the final say when determining whether different derivatives should be cleared following an application by a clearinghouse, according to the European Commission.

Recently released data on single-name credit default swaps reported trades that actually transferred risk within the market. Some industry players say it left out pertinent information, while others say it was streamlined specifically to prevent skewed results.

Aurelien Bessot, the ex-head of exotic equity derivatives trading at Bank of America, has launched hedge fund boutique FM Capital Partners in London.

A small segment of buy-side firms plan to increase their spending on technology to improve their collateral management processes for over-the-counter derivatives, according to the results of a survey conducted by IntegriData.

Growth in the property derivatives market will depend on the level of corporate exemptions in forthcoming E.U. over-the-counter derivatives legislation.

France’s Autorité des Marchés Financiers wants mandatory clearing of fx derivatives.

As legislators from the House and Senate head into conference Thursday morning to nail down the details of financial reform, experts say this final step before the bill becomes law could bring some surprises like a strengthened Volcker Rule and tiny tweaks of language that would have a significant impact on the industry.

Buy-side firms will need new technology and regulatory exemptions before they can effectively access central counterparty clearing (CCP) platforms for over-the-counter derivatives directly, according to Ila Eckhoff, director at BlackRock.

Keeping a handle on clearing houses will be the greatest challenge for the Commodity Futures Trading Commission, according to Michael Dunn, member of the Commission.

Dealers have warned E.U. and U.S. lawmakers that mandating clearing for all over-the-counter derivatives could prevent firms and end-users from offsetting their positions.