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The Office of Financial Research ("OFR") issued a working paper that examines the relationship between banks' credit default swaps ("CDS") spreads and possible measures of systemic importance. In the paper, the OFR finds banks perceived as too big to fail to have CDS spreads that are 44 to 80 points lower than other banks, depending on the asset-size threshold and controls used. Additionally, the study suggests that market participants pay more attention to asset size than to more complex measures, such as the designation of a globally systemically important bank. See: The Influence of

Commentary by Steven Lofchie

The SEC proposed amendments to Exchange Act Rule 13n-4 ("Duties and Core Principles of Security-Based Swap Data Repository") related to regulatory access to security-based swap data held by security-based swap data repositories. The proposed rule amendments would (i) implement the conditional Exchange Act requirement that security-based swap data repositories make data available to certain regulators and other authorities, and (ii) set forth a conditional exemption from the statutory indemnification requirement from regulators' obtaining access to the information.

SEC Commissioners Daniel Gallagher and Michael Piwowar urged the SEC to prioritize the finalization of its rules governing the security-based swap market. In a public statement released by the SEC, and echoing a recent statement by Commissioner Aguilar, the Commissioners pointed to the wide range of rules remaining to be finalized, including those related to clearing and execution facilities, capital, margin, segregation, recordkeeping, and business conduct. They argued that finalization of these rules is important because the derivatives markets need regulatory certainty. Additionally, they

Commentary by Steven Lofchie

In a policy paper titled In Defense of Derivatives: From Beer to the Financial Crisis, New York University Clinical Professor of Finance Bruce Tuckman extolled the benefits of derivatives. Policies that recognize the usefulness of derivatives and of holistic risk management and supervision, he wrote, will encourage businesses to use derivatives appropriately and, at the same time, reduce systemic risk. Professor Tuckman made the following arguments against several regulatory initiatives: mandatory clearing may break apart bilateral portfolios that previously had comprised diversified

The SEC proposed the form and manner in which security-based swap data repositories ("SDRs") will be required to make security-based swap data available to the SEC under Exchange Act Rule 13n-4(b)(5) ("Duties and Core Principles of Security-Based Swap Data Repository"). The proposed amendment would "require SDRs to make these data available to the SEC according to schemas that will (i) be published on the SEC Web site and (ii) reference international industry standards Financial products Markup Language ("FpML") and Financial Information eXchange Markup Language ("FIXML"). Comments on the