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Wall Street Backs Blockchain for Savings on Derivatives DTCC chooses startup Axoni to use the tech behind bitcoin to track payouts between big banks Telis Demos Jan. 9, 2017 A big Wall Street middleman is bringing in the technology behind the digital currency bitcoin to try to save banks tens of millions of dollars on fees for derivatives trades. Following a series of tests last year, the Depository Trust & Clearing Corp. has picked startup Axoni to use a blockchain—the networking system originally created to move digital currencies—to start tracking credit-derivatives payouts between big banks by early next year, the...

Deutsche Bank can only be saved by the German government, strategist says Matt Clinch | @mattclinch81 Only a substantial intervention by the German government can stop the collapse of the country's largest lender, Deutsche Bank, according to Stefan Müller, the CEO of Frankfurt-based boutique research company DGAW. "Deutsche Bank doesn't realize that something serious needs to happen," he told CNBC via telephone on Thursday morning. "(CEO John) Cryan clearly showed that he has no idea how to survive." The embattled German lender saw a respite on Wednesday from hefty selling seen in previous sessions amid contradictory reports on whether the...

BIS: OTC Derivatives Market Volume Shrank In 2H 2012 LONDON (Dow Jones)--The outstanding volume of over-the-counter derivatives shrank by almost 10% in the second half of last year, according to data released Wednesday by the Bank for International Settlements. The BIS said notional amounts outstanding fell to $647.76 trillion by the end of last year, from $706.88 trillion at the end of June, due largely to declines in the number of interest-rate swaps, credit-default swaps and equity-linked contracts. Interest-rate swaps accounted for more than three-quarters of the total notional volumes outstanding. At the same time, the gross market value of...

JPMorgan's trading debacle: why $2 billion is just the start By Stephen Gandel, senior editor May 11, 2012: 2:02 PM ET The bank's bad bet could curtail profits for years to come. FORTUNE -- For years, JPMorgan Chase (JPM), perhaps the riskiest bank in the world, got a pass. Sure there were minor hiccups along the way. But basically investors had the attitude with the bank run by Jamie Dimon that they were going to be hands off. Sub-prime mortgage loans: You've proved you can handle them. Foreclosure problems: We're sure you've got your best people on it. A derivative...

JANUARY 2012 Julian Fellowes is as English as Earl Grey and clotted cream. As an actor, director and writer, he has continually peeked under the petticoats of British mores and conveyed the details with relish to audiences. His writing of the upstairs-downstairs whodunit Gosford Park won the Academy Award for Best Original Screenplay in 2002, and his subsequent films Vanity Fair and The Young Victoria established Fellowes as the class-fixated Anglophile’s Anglophile. His two novels, Snobs and Past Imperfect, mined the same dishy blueblood vein, and both were Sunday Times bestsellers. A lifelong Conservative, Fellowes was made a Peer of...

Leading banker jumped to his death after snorting cocaine at welcome home party By Daily Mail Reporter Last updated at 4:45 PM on 8th September 2010 A leading banker jumped to his death after snorting cocaine at a party thrown to welcome him back from abroad, an inquest heard today. Neil McCormick plunged sixty feet and landed on rubble after he was spotted walking in circles and mumbling 'guys, don’t do this to me', the court heard. Mr McCormick, who had used cocaine regularly since studying at Oxford University, moved to Hong Kong last September with his wife Diana and...

NEW YORK (Reuters) – Warren Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N) on Friday said second-quarter profit fell 40 percent, as declining stock prices depressed the value of his derivative contracts. Operating profit nevertheless soared 73 percent, helped by the takeover of railroad operator Burlington Northern Santa Fe Corp, improvement in insurance underwriting results, and a turnaround in performance at the NetJets corporate plane unit. Net income fell to $1.97 billion, or $1,195 per Class A share, from $3.3 billion, or $2.123, a year earlier. Excluding investments, operating profit rose to $3.07 billion, or $1,866 per share, from $1.78 billion, or...

Islamic tahawwut master agreement arrives at last Author: Joel Clark Source: Risk magazine | 01 Mar 2010 Categories: Islamic Finance, Derivatives After 24 drafts and a consultation process lasting three-and-a-half years, the International Swaps and Derivatives Association and the International Islamic Financial Market (IIFM) today unveiled the sharia-compliant tahawwut (hedging) master agreement for Islamic derivatives. The protracted negotiations to draw up the agreement looked to be moving forward in September 2006, when Isda and the IIFM signed a memorandum of understanding and committed to convene regular meetings of a joint working group to move the project forward. But lengthy discussions...

  Too interconnected to fail = too big to fail: What is in a leverage ratio? Daniel Gros 26 January 2010 Did allowing financial institutions to become “too big” play a role in the financial crisis? This column argues that being “too interconnected” is also a factor, and that US accounting standards should recognise gross derivatives exposure on the balance sheet to make this interconnectedness, and the resulting exposure, clear. By now there is general agreement that a financial institution can not only be “too big”, but also “too interconnected” to fail. But how do we measure what it is...

An Object Lesson in Governmental Failure: Derivatives reform By Ken Silverstein If you want to understand why Congress seems completely incapable of checking the power of Wall Street, look back to a hearing on the Hill last October 7, and the subsequent events surrounding it. On that day, the House Financial Services Committee hosted a panel on reform of the market for derivatives, the financial instrument which played such a notable role in the country’s economic meltdown. Everyone rational knows that there is an enormous need to seriously reform the derivatives market, but the committee, headed by Congressman Barney Frank...

Derivatives Markets Rebound As Reform Recedes Robust trading activity in OTC derivatives products likely to continue as reform momentum dissipates. Guest Post by Oxford Analytica Over-the-counter (OTC) derivatives, particularly credit default swaps (CDSs), were faulted as a cause of the credit crunch, most prominently in a June 17 speech by US President Barack Obama announcing his administration’s plan for financial reform. This led to calls in the United States and elsewhere to regulate the CDS market. Regulatory outlook. Some of this pressure has been addressed indirectly by proposals such as the G20’s commitment to require all standardised OTC derivative contracts...

How Harvard Nearly Went Bankrupt After A Rogue Interest Rate Swap Went Very Sour Submitted by Tyler Durden on 10/16/2009 17:45 -0500 The school that epitomizes the dangers of groupthink (especially by very intelligent people) and tends to get caught in both the virtues and vices of its own ingeniosity, saw just how expensive hubris can be in 2009. Harvard's endowment dropped 27.3% in 2009 to $27 after hitting roughly $10 billion higher the year before. /snip Yet most notable in the entire report is an interesting story for all those who claim that representing the $200 or so trillion...

China state firms told to hold cash, hedge carefully BEIJING, Oct 12 — China's biggest state firms must highlight that "cash is king" in their 2010 budgets and control trading in financial derivatives, China's state asset watchdog said. The State-owned Asset Supervision and Administration Commission (SASAC) gave few details about its plans for derivative losses made by China's state firms. But SASAC said in a notice issued over the weekend that it did not want state firms to speculate in derivatives in 2010. "Any budget for financial derivatives should stick to the principal of risk hedging, and any trading scale...

US film company applies to launch ‘movie derivatives’ By Jeremy Grant in London Published: October 8 2009 23:26 | Last updated: October 8 2009 23:26 Being able to bet on whether a movie makes money or ends up a box office flop inched a step closer to reality on Thursday after a second company in the film business applied to US regulators to set up a “movie derivatives” exchange. The US futures regulator, the Commodity Futures Trading Commission, submitted for public comment an application by Veriana Networks, a privately owned, Delaware-registered company to operate Media Derivatives (MDEX) as an “electronic...

With all this blather about “green shoots” and economic “recovery” and new “bull market,” I thought I’d inject a little reality into the collective financial dialogue. The following are ALL true, all valid, and all horrifying… Enjoy.

Central clearing of derivatives seen adding risk Tue Jun 9, 2009 4:31pm EDT NEW YORK, June 9 (Reuters) - Proposals to require that all contracts in the $450 trillion derivatives market be centrally cleared could tie up valuable capital and constrain the liquidity of companies that use the contracts to hedge their businesses, derivatives users and dealers warned on Tuesday. The use of central clearinghouses is viewed as key to removing systemic risks posed by the contracts, should the failure of a large dealer spark a chain of losses globally. The issue arose after the collapse last year of Lehman...

“Concentrations of risk, plagued with deadly correlations” Posted on Tuesday, March 17th, 2009 By bsetser The FT’s Gillian Tett makes a simple but important point: AIG’s role in the credit default swap market meant that a lot of risk that the bank regulators thought had been dispersed into many strong hands ended up in a single weak hand. Tett: /snip But the AIG list shows what the fatal flaw in that rhetoric was. On paper, banks ranging from Deutsche Bank to Société Générale to Merrill Lynch have been shedding credit risks on mortgage loans, and much else. Unfortunately, most of...

Satyajit Das's Blog - Fear & Loathing in Financial Products Credit Default Swaps – Exercises in Surrealism Posted At : March 16, 2009 5:35 AM | Posted By : Satyajit Das Related Categories: Derivatives At the quantum level, the laws of classical physics alter in intriguing ways. In financial markets, at the derivative level, the rules of finance also operate differently. The derivative industry’s indefatigable advocacy of credit default swaps (“CDS”) centers on the fact that contracts related to recent defaults settled and the overall net settlement amounts were small. Closer scrutiny suggests causes for caution. The CDS contract is...

How Harvard's Investing Superstars Crashed Bernard Condon and Nathan Vardi 02.20.09, 11:20 PM ET Stocks were tumbling last fall as the new school year began, but at Harvard University, it was as if the boom had never ended. Workers were digging across the river from Harvard's Cambridge, Mass., home, the start of a grand expansion that was to eventually almost double the size of the university. Budgets were plump, and students from middle class families were getting big tuition breaks under an ambitious new financial aid program. The lavish spending was made possible by the earnings from Harvard's $36.9 billion...

Coming Soon: The 600 Trillion Derivatives Emergency Meeting Seeing a lot of Google queries regarding the size of the derivatives market landing at an older post of this blog, here is an update with the latest official figures (pdf) from the Bank for International Settlements (BIS.) Hold your breath, as we are not anymore talking paltry billions but TRILLIONS of whichever fiat currency. Current emergency meetings on banks and markets are still only in the stage where politicians and central bankers are bickering over how to create a few more hundred billions Euros and FRNs. But toxic MBS pale in...