Derivs - Regulation

After not getting help in the U.K. or Irish government bailouts, derivatives dealers and end users are also concerned that structured notes will be left out of a temporary U.S. program guaranteeing unsecured debt.

Raising the quality of data for modeling the performance of reference assets is key to the industry’s future, according to attendees at the 14th Annual Information Management Network ABS East conference.

Standardized natural catastrophe swap documents are drawing closer, a development expected to boost liquidity by attracting new investors, who to date have been hesitant about how the perils are defined and priced.

News that Indonesia’s central bank and capital markets watchdog, Bapepam, will begin to monitor the inflow of offshore structured products has been welcomed by industry participants, who claim light regulation has left them blind to what has been sold inside the country.

Investors in synthetic collateralized debt obligations that referenced Lehman Brothers as an obligor are at risk of suffering losses after a settlement agreement last week on outstanding credit default swap agreements for Lehman returned sub-par results.

Fears about counterparty credit risk has some market players talking about a flight to exchange-traded and away from the over-the-counter market.

MKP Vela CBO, a $541.8 million hybrid collateralized bond obligation, will go on the auction block on Oct. 21 in Houston.

Immense open interest to sell Lehman Brothers Holdings bonds during its credit event auction earlier today led to a drop between the initial and final recovery rate for settling credit default swaps referencing the bankrupt firm.

Fund managers are seeking to re-address the relationship with their prime brokers, when scripting over-the-counter contracts, as fears over counterparty credit risk has heightened since the implosion of Lehman Brothers.

Full coverage of the Awards event and the winners is now available below. Deutsche Bank was named Global Derivatives House of the Year at a gala dinner in London earlier this week (DW Online, 9/6).

Credit default swap spreads on U.K. banks pulled in significantly this morning after the Treasury unveiled a GBP250 billion plan to shore up the nation’s banking sector.

The International Swaps and Derivatives Association will hold a conference call Thursday with the International Islamic Financial Market to discuss setting up a Master Agreement incorporating Islamic law to document Sharia-compliant hedging transactions.