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JPMorgan has made redundant William Tsai, v.p. in the equity derivatives group in Hong Kong, on the back of massive layoffs in the Asian region. In recent weeks, JPMorgan laid off about 90 bankers in the region, including 13 managing directors. Industry officials said that Tsai covered equity derivatives trading for the Taiwan market. He reported to David Long, v.p. and head of equity derivatives trading in Hong Kong. Long declined comment. Tsai couldn't be reached.

JPMorgan has recently started offering bespoke managed credit-linked notes, similar to single tranches of managed synthetic collateralized debt obligations. Bespoke mezzanine tranches of CDOs have been structured before, but JPMorgan is thought to be the first firm to add an external manager. Christian Spieler, responsible for financial institutions derivatives marketing to Germany, Austria and Switzerland in London, said this brings the advantages of a manager, without the inflexibility. The innovation means JPMorgan is able to structure notes for which there is demand and is not left holding a series of unsold notes or having to gather all the investors before it executes a CDO, something which is a growing concern in the current credit environment.

German development bank KfW has entered an interest rate swap to convert a recent fixed-rate bond offering into a synthetic floating-rate liability. The firm entered the fixed-to-floating swap on the back of a GBP100 million (USD156 million) bond sale, said Frank Czichowski, first v.p. and head of credit markets in Frankfurt. The swap was executed to hedge interest rate risk on the bond.

Merrill Lynch has let go Carlos Krajniewski, in the structured finance group in London, as part of its strategy to reduce headcount costs. Krajniewski reported to Vincent Dahinden, managing director in the structured credit group in London. Dahinden was on vacation and could not be reached for comment.

CIMB Group, Malaysia's largest investment bank with over MYR8.033 billion (USD2.114 billion) in assets, is gearing up to start structuring credit derivatives for the first time. "Credit derivatives are a nascent market in Malaysia, but we've been looking at it," said Lee K. Kwan, head of debt markets and derivatives in Kuala Lumpur. Lee said the bank plans to start offering credit-linked notes referenced to domestic names early next year and the move is driven by more firms becoming aware of the products. "There should be demand," he added.

National Australia Bank plans to start a commodities sales activity in the U.S. and is hunting a senior commodities sales professional for the effort. Robert Cone, senior v.p. and head of the markets division for the Americas in New York, said the business line is a logical progression of NAB's lending activities in Australia, which the firm has been growing over the past two to three years and is now developing internationally. The sales pro will link the Australian agricultural producers with U.S. investors. In addition, the staffer will work with base metals and energy, he added.

Merrill Lynch is building up its fixed income operation for Korea and has transferred H.H. Choi, Asia Pacific head of fixed income sales in Hong Kong, to Seoul to head debt. "Korea is one of our target markets in Asia-Pacific," said Choi, who is now the head of Korean debt markets with responsibilities for sales, trading and debt capital markets. He plans to bring in foreign exchange and fixed income traders, along with marketers for the effort early next year. Staff will likely be transferred from Hong Kong or Tokyo for the desk.

Hypo Tirol Bank, an Austrian mortgage bank, has entered two swaps on the back of a recent CHF200 million (USD132.61 million) bond offering. Kirch Mair, head of asset and liability management in the treasury group in Innsbruck, said the bank first executed a swap to convert the offering to a floating-rate liability, in which it receives the 3% coupon on the bond and pays LIBOR plus a spread. Then it entered a basis swap in which it receives LIBOR plus a spread and pays Euribor plus a spread. Mair declined to disclose the specific spreads.

Traders who bet the ranch in the derivatives market and lose are likely to face increasingly harsher prison sentences if convicted of fraud. The seven-and-a-half year sentence former Allfirst Financial trader John Rusnak received from a Baltimore court last week is thought to be one of the longest stretches handed down to a rogue trader, according to market professionals. Indeed, Rusnak's derivatives trades resulted in a USD691 million loss, but Nick Leeson, the rogue trader's rogue trader, only received a six-and-a-half year sentence for bringing down Barings Bank.

National Bank of New Zealand, one of the largest domestic banks in New Zealand with over NZD36 billion (USD17 billion) in assets, is studying offering credit derivatives to its clients for the first time. "Like everybody else we've been looking at it," said Paul Daley, head of capital markets at the National Bank in Wellington. While he confirmed that the bank is actively considering offering credit products, Daley declined to elaborate on types of instruments or comment on a specific timeframe.

Salomon Smith Barney is bringing aboard Scott Sohn, manager of interest rate trading at the Korea Development Bank in Seoul, as a trader for its fixed income desk. Officials at SSB said Sohn, who will start next month, will trade interest rate derivatives on the back of structured fixed income deals as part of Salomon's effort to boost its structuring business.

"This year was an aberration."--Fergus Gilbert, head of credit trading at the Commonwealth Bank of Australia in Sydney and chairman of the Australian Financial Markets Association's credit derivatives committee, explaining the reason for the fall in credit derivatives volumes in Australia. For complete story, click here.