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Regulation

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  • Basel III proposals to increase capital charges for counterparty credit risk could give rise to unregulated entities such as hedge funds becoming market makers in the over-the-counter derivatives market, according to a report by Standard & Poor’s.
  • The British Bankers’ Association has called for the Committee of European Securities Regulators to follow the U.K.’s lead on over-the-counter derivatives reporting.
  • The New York state bill banning naked credit default swaps, where the user of the derivative has no economic interest in the underlying debt securities, and that would force the sellers of CDS to be licensed insurance carriers, reached the state assembly this morning.
  • The Senate Agriculture Committee voted 13-8 to send the Wall Street Transparency and Accountability Act of 2010, penned by Chairman Sen. Blanche Lincoln (D-Ark.), to the full senate.
  • A provision in the recently released Senate Agriculture Committee bill would impose a fiduciary duty on swap dealers transacting with municipalities and pension plans, and many industry players say this could destroy the already shaky market.
  • E.U. politicians have called on the European Commission to require at least 80% of derivatives to be centrally cleared.