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You would have thought that news of USD2 billion in losses incurred by JPMorgan’s chief investment office from trading in indices tied to credit default swaps would have fuelled some schadenfreude among the firm’s competitors, but among senior market observers that has not been the sentiment in recent weeks.

During the crisis, the Nordic covered bond market firmly established its credentials as an anchor of stability, with spreads holding firm and borrowers maintaining their access to the market. Since then, continued strong demand for exposure to the region has supported a further narrowing of spreads relative to other core European covered bonds. In the EuroWeek/Natixis Nordic covered bond roundtable, a number of leading issuers from the region discussed the underlying reasons for this strength, and the outlook for the market.

The appointment of external auditors to look at the strength of Spain’s banks is a welcome development. But it will not necessarily resolve investor frustration at Spain’s softly, softly approach towards cleaning up the banking sector.

Attempts to provide investors with regular, standardised and transparent covered bond collateral information are to be applauded. But a fundamental shift in how Spanish banks collect and report data is needed for prospective Cédulas buyers to benefit.

Standard Chartered’s breaking of the Rmb1bn ($158.2m) barrier in ECP sold out of London may seem like small Tsingtao when compared with the size of the market as a whole. But the speed at which the issuer reached the milestone is testament to the flexibility of the ECP product and its ability to adapt, despite the slings and arrows it has faced over the last five years.

Asia’s dollar markets are now suffering from the indigestion that has long been expected after a feeding frenzy earlier this year. The region’s domestic markets will now have to pick up some of the slack — and local debt liquidity is about to be put to the test.

Asian loan bankers have had a torrid time this year, so they could be forgiven for now feeling a sense of schadenfreude at the expense of their peers on bond desks. They have watched their DCM colleagues poach business for much of the year — but they are ready to start bringing business back to their own desks.

Selling five-year credit default swaps on Germany brings greater yield than buying cash bonds because the CDS spread is skewed wider on European sovereign risk, according to a report by Munich-based Assenagon Capital Management.

—Jochen Felsenheimer, co-head of credit at Munich-based Assenagon Credit Management, on proposals to ban naked European sovereign credit default swap trading by the European Securities and Markets Authority.

Mariana Capital Markets, the London-based boutique brokerage firm, has hired Manvir Nijhar, the former co-head of equity derivative flow sales for Europe, the Middle East and Africa at Citigroup in London, as a partner, also in London.

Securitisation was blamed for causing the financial crisis that was triggered in 2007. But the technique must now be recognised for its potential to resuscitate fragile banks.

The effects of JP Morgan’s shock $2bn loss in its Chief Investment Office are likely to be felt far beyond the bank. At the very least, it has shattered an already fragile trust in the industry. It may also be the nail in the coffin for traditional measures of risk.