Hi all,
Let's post interesting staff we read here;- these are not necessarily the hottest issues but the staff that got you thinking a bit. Not necessarily trying to pass by doing this but to open our eyes and ears more as "Finance People";-
1) Australian Banks use derivatives to build hidden M&A positions - for example there was a company that announced it had written a derivative over 15% of the target securities and disclosed that derivative holding, but the interesting thing is that when they disclosed it, neither they nor the bank that wrote the derivative had in fact secured 15% of the company securities to support the derivative
2) Too many questions in Basel floor plans, industry claims - put a 75% floor on capital for Banks calculated using internal models, i.e 75% of the relevant standardise approach
3) Changes in Banking Valuation to include a Funding Value Adjustment giving quants a headache - another evolutionary leap, slightly better established, but still controversial
4) Assessing the appropriateness of the Standard formula –on top of meeting the requirements for an internal model, now a company has to prove that the standard formula is or is not appropriate. Question is HOW?
5) There is a "credible risk" that the last liquid point (LLP) in Solvency II's risk-free term structure for sterling will be changed before the implementation of the new regime
6) Banks avoiding covered bonds for LCR buffer over liquidity fears - banks say they are limiting use of covered bonds for their LCR buffers due to concerns over their liquidity in stressed environments
7) Basel III transforming securities lending market - Basel III means banks should hold capital equal to at least 8% of risk-weighted assets (RWA). Indemnities – which are essentially performance guarantees – will therefore be defined as risk assets and attract a capital charge
8) Banks blame regulation for FCA's clearing worries - Only a handful of banks are extending swaps clearing services to their clients and warns it could become a "missing market"
9) Synthetic CDOs are back - but this time differently. Compared to the pre-crisis era, the pricing on senior tranches is cheaper than equity tranches. The first-loss piece of the deal – the equity tranche – is thicker...etc
10) Central Counterparties (CCPs) are intended to reduce counterparty risk, however a view exists that requiring more collateral for better incentives could ultimately reduce market liquidity. Do you agree with this view?
11) Asia Infrastructure Investment Bank - how did America get here and what is the way out?
12) Back to the core-reading
13) Back to the Core-reading... (will keep adding)
Last edited by a moderator: Apr 10, 2015
