financial markets


Short-Selling and Securities-Lending Rules Meet Legal Resistance

Pressing ahead with rulemakings rooted in the post-financial crisis Dodd-Frank Act, the Securities and Exchange Commission on a single day last October approved separate sets of requirements for...

July 12, 2024 | By John Hintze


Market-Structure Changes Are Coming for U.S. Treasury Securities, and Competition Is Brewing

Adopted last December by the Securities and Exchange Commission, with phase-in milestones through June 2026, rules requiring central clearing for much of the U.S. Treasury securities market “will...

June 28, 2024 | By John Hintze


New Reporting Rule Brings Repo Transactions Out of the Shadows

Regulators monitoring financial-stability risks are about to get a clearer view into a crucial but historically opaque segment of the U.S. repurchase-agreement, or repo, market. A final rule from the...

June 14, 2024 | By John Hintze


T+1 Settlement: A Hard Deadline Approaches, with Some Gaps in Preparedness

During a particularly active period of securities market rulemakings, financial industry reactions to new regulatory proposals often boil down to “too much, too soon.” The U.S. Securities and...

April 5, 2024 | By John Hintze


Post-Libor Transition, There Remain Refinements to Be Made and Risks to Be Aware of

In a report last November, the Alternative Reference Rates Committee declared success as it closed the book on supplanting the Libor benchmark in the U.S. with the Secured Overnight Financing Rate...

March 28, 2024 | By John Hintze


Cyber Risks Spark Optimism in Cat Bond Market

Record catastrophe (cat) bond volume in 2023 stemmed largely from inflation. Although that factor may be moderating, a first-time cyber cat bond early last year gave way to an unexpected rush toward...

March 8, 2024 | By John Hintze


Basis Trades: Treasury Market Lubricant or Systemic Risk?

At the most recent Federal Reserve Bank of New York Treasury Market Conference, an annual check-in on risks and resilience in “the deepest and most liquid government securities market in the world,”...

January 12, 2024 | By John Hintze


Structural Changes Loom in Securities Finance

The future of EquiLend, a trading platform that has been at the heart of the securities lending market for more than 20 years, is being reassessed amid other anticipated changes in securities-finance...

December 22, 2023 | By John Hinte


NBFIs: Risks and Opportunities From Nonbanks in the Financial System

How prepared are commercial banks for the risks stemming from nonbank financial institutions (NBFIs), and does the ascension of these firms provide opportunities for aspiring and early-career risk...

September 15, 2023 | By Tod Ginnis


An Appeals Court Decision Could Alter the Fundamentals of Syndicated Leveraged Loans

A critical uncertainty hanging over cryptocurrencies is whether they are to be regulated as securities or commodities. Another, more traditional asset class is undergoing a legal test of its own: Are...

June 30, 2023 | By John Hintze


Securities Lending and Repo Get the Blockchain Treatment

Approaching a decade since Wall Street institutions began exploring blockchain, or distributed ledger technology (DLT), to replace legacy processing infrastructures, tangible progress remains spotty....

June 2, 2023 | By John Hintze


Banks Short – or Long – on Deposits Can Go to the Markets

The basic business of a bank is to take deposits and make loans, an intermediary function governed by asset and liability management (ALM). The depositor runs that brought down Silicon Valley Bank...

May 12, 2023 | By John Hintze


Will the SEC Help Reinvigorate Public Stock Issuance?

Securities and Exchange Commission Chair Gary Gensler’s regulatory activism has set off debates between rival political factions, but on one matter they may find common cause: the slump in public...

April 6, 2023 | By John Hintze


A Lesson From SVB: Don’t Forget Risk Management Fundamentals

It’s now crystal clear that leadership at financial institutions can’t ignore risk and governance issues. That notion was reinforced by the risk management failures that led to the collapse of...

March 31, 2023 | By Tod Ginnis


Could SOFR, Under Stress, Hurt Bank Balance Sheets and Lending Capacity?

In a 2019 letter to their top federal regulators, executives representing Fifth Third Bancorp, PNC Financial Services Group, Regions Financial Corp. and other big regional banking companies warned...

March 24, 2023 | By John Hintze


The Fall of Silicon Valley Bank: A Systemic Risk View

The sudden collapse of Silicon Valley Bank (SVB), the second largest bank failure in U.S. history, has been subject to an avalanche of media scrutiny. But there is one key question that has yet to be...

March 24, 2023 | By Chris Donohue, Bryan Feierstein and Eli Crane


Regulators Draw a Line on an Attempted Use of Term SOFR

Two auto loan securitizations late last year tested an officially recommended boundary to use of the term version of the secured overnight financing rate (SOFR), a replacement for the floating-rate...

March 3, 2023 | By John Hintze


Treasury Trading Reforms Move Forward and Get Some Pushback

Almost three years since widespread selling of U.S. Treasury bonds exposed weaknesses in that essential market’s operational resilience and prompted an unprecedented Federal Reserve response to...

February 10, 2023 | By John Hintze


Follow the Sun to Manage Investment Risk

Market-shifting crises can break out at any unpredictable moment, but stocks trade in fixed hours. In the U.S., stock exchanges open at 9:30 am and close at 4:00 pm. Although pre-session trading...

February 3, 2023 | By Michael Shari


Does Fed Policy on Reserve Balances Raise Risk of Market Disruption?

Federal Reserve aggregate reserve balances fell from a record high in late 2021 and may hit levels this year that increase the likelihood of interest rate spikes and necessitate central bank...

January 13, 2023 | By John Hintze


Growth in Private Markets Attracts Trading Platforms to Serve Them

Technology has been progressively improving financial market operations for decades. The kinds of platforms that have streamlined trading in public equities and other liquid asset classes are now...

January 6, 2023 | By John Hintze


Capital Rules in EU Could Affect Securities Lending Elsewhere

European Union capital rules, to be implemented starting in 2025, are expected to dramatically increase bank capital requirements for securities lending and institutional-investor counterparties’...

November 23, 2022 | By John Hintze


Market Volatility Slows Libor Benchmark Transitions

Market participants still holding U.S. dollar Libor-based financial products have until June 30, 2023, to transition them to a replacement benchmark rate, and this year’s interest rate volatility has...

November 11, 2022 | By John Hintze


Foreign Exchange Risk in a Strong-Dollar Environment

Fueled by widespread economic volatility, geopolitical uncertainty, and an increasingly hawkish Fed in the face of inflation, the U.S. dollar has been at its highest levels in 20 years. After...

September 30, 2022 | By Kevin Jones


Uncleared Margin Rules Reach Final Phase, but the PRA Has Questions

September 1 was the deadline for the sixth and final group of financial firms to be in compliance with initial margin (IM) requirements for over-the-counter derivatives. But an issue raised by the...

September 16, 2022 | By John Hintze


Automation Is New Frontier for Loan Syndications and CLOs

Syndicated loans and collateralized loan obligations (CLOs) – high-volume markets largely bypassed by trading innovations that have modernized one historically offline asset class after another – are...

August 26, 2022 | By John Hintze


War, Food Insecurity and Ripple Effects

War in Ukraine means hunger in Africa. That assertion, by International Monetary Fund Managing Director Kristalina Georgieva, expressed in a nutshell the reality of globally interconnected risks....

August 5, 2022 | By Dawn Kissi


Questions High-Growth Companies Should Be Asking About Financial Risk

For many high-growth companies, the top priority is building the business and demonstrating top-line revenue growth. As they progress, the focus often shifts to the bottom line, which includes...

July 29, 2022 | By Jason Peterson


Commodity Risk: 5 Lies Corporates Tell Themselves

As volatility roils the commodity markets, corporations face difficult decisions in managing financial risk. For many, achieving long-term success requires dispelling misconceptions and facing...

July 1, 2022 | By Bryant Lee


In Brazil, a Domestic Election Under Global Pressures

Latin America’s distance from the Russia-Ukraine war blunts some of the economic spillovers buffeting those closer to the conflict. But for Brazil, with the approach of national elections in October,...

June 3, 2022 | By Dawn Kissi


Crypto Billionaire Bankman-Fried Ignites Futures Clearing Debate

For better or worse – and understandably in view of its most recent downturn – the cryptocurrency market attracts outsize public, media and, increasingly, regulatory attention. Although relatively...

May 27, 2022 | By Jeffrey Kutler


SEC Proposals Raise CLO Market Concerns

The Securities and Exchange Commission has picked up its pace of proposed rulemaking – “too much, too quickly,” Securities Industry and Financial Markets Association chief Kenneth Bentsen has...

May 20, 2022 | By John Hintze


War Exacerbates Emerging-Market Headwinds

Emerging market economies, hit disproportionately hard by the pandemic and related shocks, are yet again reeling from inflation and other economic effects of the Russia-Ukraine war. That is the...

April 29, 2022 | By Dawn Kissi


Cyber Is Coming to Insurance-Linked Securities

The insurance-linked securities (ILS) market reached record volume last year and is primed to grow dramatically as insurers look to the capital markets to help cover ballooning cyber-related risks....

April 22, 2022 | By John Hintze


New Drivers for Credit Risk: Increasing Interest Rates and Rising Geopolitical Risk

Credit risk and interest rate risk are often perceived by banks as worlds apart, thanks in part to the well-established risk taxonomy of the Basel Committee on Banking Supervision (BCBS). However, in...

April 8, 2022 | By Marco Folpmers


Ukraine Repercussions Include Heightened Geopolitical Risk, Widespread Uncertainty

Across financial markets, the confrontation over Ukraine generated that least welcome of investment factors: uncertainty. Volatility ran high as investors pondered various military-intervention...

February 25, 2022 | By Dawn Kissi


Applying Exchanges’ Risk Measures Broadly Across Markets Will Support Post-Pandemic Rebound

Over the past decade, the securities trading industry has responded to economic and operational crises with a series of circuit breakers, limits and risk controls, implemented one at a time. The...

January 21, 2022 | By Michele Hillery


After Evergrande, the China Market Moves On

From real estate debt to regulatory crackdowns to geopolitical tensions, China gives investors, risk managers and corporate strategists more than a few reasons to prepare for adverse outcomes or...

January 14, 2022 | By Dawn Kissi


To Attract Investment, Mexico Shrugs Off Governance Troubles

With a muted long-term growth outlook, and state-owned petroleum company Pemex negatively impacting public finances, Mexico could be facing a downgrade, with governance indicators also playing a...

November 19, 2021 | By Dawn Kissi


The Building Blocks of Risk Strategy

Crises always reveal the true value of an adaptable, integrated approach to risk management. COVID-19 is no exception. Indeed, throughout the current pandemic, financial services firms have realized...

November 12, 2021 | By Brenda Boultwood


Lending and Libor: The Consumer Pain Point

In the U.S., consumers and borrowers are standing at the precipice of the biggest upheaval in the world of interest rates since the 2008 financial crisis. Surprisingly, they are largely unaware that...

October 29, 2021 | By Jonathan Rosen


In Corporate Finance, There Is a Premium on Being Proactive

For corporate finance, a lesson from the pandemic period is to be more proactive in managing financial risk and thereby accelerate efforts to deal with longstanding challenges. After COVID-19 struck...

October 8, 2021 | By John Hintze


In Lebanon, Tunisia and Other Hotspots, the Instability Is Local

From Lebanon to Tunisia, from Ethiopia to Syria to Myanmar, political and humanitarian crises are flaring up worldwide, destabilizing economies amid a backdrop of social unrest and vaccination...

October 1, 2021 | By Dawn Kissi


How to Develop a Top Risk Approach

The board of directors always prefer a simple, concise summary of the organization's top risks over a voluminous risk report. Firms often use a risk heatmap to scrutinize the completeness and...

September 17, 2021 | By Brenda Boultwood


With Formal Committee Support, Transition to SOFR in 'Homestretch'

The Alternative Reference Rates Committee (ARRC) has recommended a term version of the Secured Overnight Financing Rate (SOFR) for business loans and related transactions, after indicating previously...

August 6, 2021 | By John Hintze


Emerging Market Conditions - and Debts - Cloud the Global Growth Outlook

Forecasting 6% global growth for this year, the International Monetary Fund says, “We are seeing in some countries a recovery like no other, propelled by a combination of strong fiscal and monetary...

July 23, 2021 | By Dawn Kissi


Treasury Market Upheavals Bring Calls for Operational Fixes

Post mortems on the COVID-19 crisis, from a financial market perspective, home in on emergency interventions by the Federal Reserve and ensuing dysfunctions in U.S. Treasuries. There is no disputing...

July 23, 2021 | By John Hintze


Term-Rate Turnabout: Multiple Choices Beyond Libor

Early this year, market participants were worried about the lack of a Libor-replacement rate with a term structure similar to Libor's. Now it is a case of which one to choose. Although the Federal...

June 4, 2021 | By John Hintze


U.S. Regulators Lag on FRTB as Europe Deadline Approaches

Rules stemming from the Basel Committee on Banking Supervision's Fundamental Review of the Trading Book (FRTB) market risk guidelines, initiated more than a decade ago, become effective in Europe...

May 14, 2021 | By John Hintze


High-Frequency Trading: A Sociologist's Take

For Donald MacKenzie, individuals' interactions with machines, mathematics and technology in competitive settings - and the risks that may ensue - are subjects of great fascination, whether in...

May 7, 2021 | By Katherine Heires


Structural Shifts Prompt Rethinking of Securities Lending Strategies

The ongoing bull market in equities has played a major role in depressing securities-finance revenue in recent years. Reddit “meme stock” traders fueled a temporary bump up in revenue early this...

May 7, 2021 | By John Hintze


For CLOs, a Bumpy Path Away from Libor

Collateralized loan obligations (CLOs) pool highly complex and bespoke syndicated loans into securities sold to investors with varying priorities. In the transition away from Libor, the predominant...

April 1, 2021 | By John Hintze


New Momentum for Ameribor Benchmark Follows Citi's Market-Making Move

Citi's decision to join the American Financial Exchange (AFX) and make markets in Ameribor-based derivatives brought the upstart exchange long-sought affirmation from a major Wall Street player. More...

February 12, 2021 | By John Hintze


Will a Financial Transaction Tax Put Markets at Risk?

Legislative proposals for financial transaction taxes have been surfacing with increasing regularity for at least a decade. The FTT idea – to impose small levies on trades of stocks and other...

August 21, 2020 | By Jeffrey Kutler


The Deflation Risk of Pandemic-Driven Stimulus Plans

Across the globe, in response to unprecedented economic disruptions caused by COVID-19, central banks have implemented unconventional monetary policies. In the U.S., for example, the Federal Reserve...

August 7, 2020 | By Tianyang Wang


World Economic Forum to Asset Managers: How to Mitigate 6 Systemic Risks

The World Economic Forum (WEF) and its research partners believe that asset managers are in a good position to help mitigate some of the world's most challenging risks. In late May, the Forum and...

June 26, 2020 | By Katherine Heires


Stability Amid the Storm: Can Another Full-Blown Financial Crisis Be Avoided?

In mid-May, the Federal Reserve Board released its Financial Stability Report, representing its “current assessment of the resilience of the U.S. financial system.” Needless to say, the Fed is...

June 5, 2020 | By Katherine Heires


Structured Finance Holds Up Under Pressure

The uncertainties of when and how successfully localities restore economic activity extends to structured finance transactions - and there are various scenarios. A national downturn would have to be...

May 15, 2020 | By John Hintze


Islamic Finance: More Mainstream, More Exposed

Islamic financial services has tallied a decade of positive growth, reaching $2.19 trillion in global assets as of 2018, according to the most recent Islamic Financial Services Board (IFSB) data....

April 24, 2020 | By Dawn Kissi


COVID-19 Calls for New Risk Measures

COVID-19 is different from all previous crises. It feels like a combination of a much broader version of 9/11, when all flights were canceled, and a much faster version of the 2008 financial...

April 3, 2020 | By Alla Gil


Coronavirus Spread Will Test Scenario Assumptions

The coronavirus outbreak sent equity markets into a tailspin and macroeconomic forecasting into overdrive. Publicly discussed scenarios ranged from cautiously benign to alarmingly pessimistic, as...

March 6, 2020 | By Ted Knutson and Jeffrey Kutler


The Libor Dilemma: How to Manage and Mitigate the Risks of a Tough Transition

The pending global shift from the Libor interest rate benchmark to an alternative reference rate is rife with legal, accounting, governance and technology complexities, imposing a heavy burden on...

February 21, 2020 | By Alla Gil


EquiLend Brings Automated Trading to Total Return Swaps

EquiLend Holdings, which was formed in 2001 to operate an electronic trading platform for securities finance, has expanded into the equity total return swaps (TRS) market. The New York-based company,...

January 24, 2020 | By John Hintze


Libor Transition Expected to Accelerate in 2020

The move away from Libor to an alternative interest-rate benchmark for debt and derivatives pricing is proceeding, although most of the action is around infrastructure to support the transition,...

January 24, 2020 | By John Hintze


CFTC Forms Two Market Risk Subcommittees

The Commodity Futures Trading Commission said it has formed two new subcommittees of its Market Risk Advisory Committee (MRAC): Central Counterparty Risk and Governance; and Market Structure. The...

December 6, 2019 | By Jeffrey Kutler


Ameribor Benchmark Is on the Blockchain

American Financial Exchange (AFX), a self-regulated marketplace for bank-to-bank transactions and home of the American Interbank Offered Rate (Ameribor) benchmark, has launched on the blockchain. The...

November 22, 2019 | By Jeffrey Kutler


Litterman Named Chairman of CFTC Panel on Climate Risk

The Commodity Futures Trading Commission said that renowned financial risk manager Robert Litterman will chair the newly impaneled Climate-Related Market Risk Subcommittee of the CFTC's Market Risk...

November 19, 2019 | By Jeffrey Kutler


Libor Alternative Action: SOFR Makes Progress; IBA Adds Credit Spread

“The clock is ticking” has become a regular refrain of regulators intent on keeping financial market participants on course to replace the London interbank offered rate (Libor) by the end of 2021....

October 11, 2019 | By John Hintze


Shadow Banking: Monitoring Vulnerabilities and Strengthening Policy Tools

“Shadow banking” is a catchy phrase that sounds sinister, sly, slick or shady. Yet that phrase obscures an important fact: Although some forms of shadow banking can be risky, complex or even toxic,...

June 21, 2019 | By Fabio M. Natalucci


Vulnerabilities Intensify in the Global Financial System

In the global economy, there are some worrisome trends that could put economic growth at risk. Financial vulnerabilities have been intensifying worldwide as financial conditions remain relatively...

May 3, 2019 | By Tobias Adrian and Fabio Natalucci


A U.S. Libor Replacement with Traction

The big‐bank replacement for the London Interbank Offered Rate (Libor), known as SOFR (Secured Overnight Financing Rate), is working through some growing pains and development issues, including the...

April 26, 2019 | By John Hintze


Deutsche Börse to Acquire Risk Analytics Provider Axioma

Deutsche BÖrse has agreed to acquire Axioma, a New York-based company noted for its cloud-driven, multi-asset-class portfolio and risk management technology and customer base of more than 400,...

April 12, 2019 | By Jeffrey Kutler


Brazil's Euphoric Right Turn

The market euphoria in Brazil since the election last fall of right-wing populist President Jair Bolsonaro does not mask the fundamentals of economic weakness and the investment risks that accompany...

February 15, 2019 | By Dawn Kissi


Term Versions of Libor-Replacement Rates Pick Up Steam

Recent input from market participants about their preferred way to transition to a Libor-benchmark replacement surfaced concerns about several interconnected risks. Necessary to address them will be...

January 18, 2019 | By John Hintze


Amid Uncertainty, Deutsche Bank Strategist Sees a Sunny 2019

Consumer discretionary spending will keep the U.S. from falling into recession, according to Deepak Puri, chief investment officer and managing director of Deutsche Bank Americas Wealth Management....

January 18, 2019 | By Juliette Fairley

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