ISDA highlighted separate economic analyses on: (i) trends in the credit default swaps market, (ii) clearing networks and central counterparties stress testing, and (iii) the cost effects of clearing fragmentation.
The CFTC voted to propose amending its uncleared swap margin regulations to (i) extend the implementation date of initial margin requirements, and (ii) exempt certain transactions from uncleared margin requirements.
The Federal Reserve Board solicited feedback on whether to amend regulations on reserve requirements to lower the rate of interest paid on excessive balances maintained at FRB banks by eligible institutions.
In a final report, the Financial Stability Board, along with a group of other international financial regulatory bodies, evaluated how post-financial crisis reforms affect incentives for the central clearing of derivatives.
Federal Reserve Board of New York President and CEO William C. Dudley described policy changes in the Treasury markets caused by "increased electronification of trading, the changing nature of intermediation and liquidity, and the entry of new market participants."
Federal Reserve Bank of New York President William C. Dudley offered several principles to consider when evaluating the post-financial crisis regulatory regime and raised questions about the effectiveness of the Volcker Rule.
Federal Reserve Bank of Chicago Senior Policy Specialist Ivana Ruffini cautioned that the "concentration of risk in [central counterparties] must not be underestimated, as CCP failures, while rare, do happen."
The CFTC Division of Clearing and Risk issued no-action relief from the swap clearing requirement to: (i) small bank holding companies and savings and loan holding companies having consolidated assets of $10 billion or less; and (ii) Community Development Financial Institutions that have received a certification from the U.S. Department of the Treasury ("CDFIs").
SIFMA provided notice to banking regulators (the Board of Governors of the Federal Reserve, the Office of the Comptroller of the Currency and the FDIC) of a forthcoming change in the treatment of variation margin payments for over-the-counter derivatives by central clearing counterparties ("CCPs"). Historically, variation margin payments have been treated as collateral for outstanding exposure, a treatment that a SIFMA comment letter refers to as the "collateralized to market" ("CTM") model. Going forward, the CCPs will adopt a model by which variation margin payments are treated as settlement of the exposure under the contract, a treatment that the SIFMA comment refers to as the "settled to market" ("STM") model.
In a paper titled Central Clearing: Trends and Current Issues, Bank for International Settlements (BIS) officials identified increased systemic risks due to central clearing. Head of Policy Analysis Dietrich Domanski , Research Adviser Leonardo Gambacorta and Secretariat of the Committee on...