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FT: High-speed traders asked to explain methods
The European Securities and Markets Authority (ESMA) has asked automated trading firms across the continent to divulge details about their trading strategies and computer algorithms used to drive share, derivatives and foreign-exchange transactions.
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IMF publishes 'Sovereign Rating News and Financial Markets Spillovers: Evidence from the European Debt Crisis' report
The paper examines the spillover effects of sovereign rating news on European financial markets during the period 2007-2010. The main finding is that sovereign rating downgrades have significant spillover effects statistically and economically, both across countries and financial markets.
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FT.com/Alphaville: An MEP out to risk-weight the eurozone
"To spot the next source of financial instability simply identify the assets currently considered 'safest'. At the moment we’d argue those are covered bonds, and of course, sovereigns. The first hasn’t gotten much regulatory scrutiny of late but the second, well, there are some capital games afoot."
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Reuters: EU derivatives law change spurs competition hopes
European Union states want to extend a draft law curbing risk in privately negotiated derivatives to the whole sector, which could ultimately dent profitability of the world's first mega bourse merger.
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FN: FSA widens insider trading net to derivatives market
The article claims the FSA has begun investigating the use of credit default swaps as a vehicle for insider trading, requesting information about the possibility of using the derivatives to carry out market abuse in the first instance of a crackdown on insider trading in these types of products.
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OTC derivatives clearing roundtable
The Futures and Options World OTC derivatives clearing roundtable, sponsored by Eurex Clearing, is focused on delivering efficiency and protection to the marketplace.
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Advanced Trading: Derivatives: OTC or exchange-traded -- good, bad or indifferent?
The article argues that by moving OTC derivatives to exchanges or SEFs, regulators are making it easier to trade these exotic instruments.
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Ben Bernanke: Clearinghouses, financial stability and financial reform
Speaking at the 2011 Financial Markets Conference, Bernanke highlighted that clearinghouses around the world generally performed well in the highly-stressed financial environment of the recent crisis. However, policy-makers have to ensure their future resilience.
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FN: Liddell says OTC is top priority for LCH.Clearnet
Chief executive, Roger Liddell, says the over-the-counter derivatives market is now the "number one" priority for LCH.Clearnet, as the Anglo-French clearing house comes to grips with major structural shifts in the European trading landscape that left it battered and bruised in 2010.
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FT: US and Canadian clearers explore joint action
Canadian Derivatives Clearing Corporation (CDCC) and New York Portfolio Clearing (NYPC) are exploring ways to clear Canadian market swaps jointly in a potential cross-border agreement that could allow G20 countries to meet their commitment to clear over-the-counter (OTC) derivatives.
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Bank of England published a paper on the Credit Rating Industry
The Bank of England published a Financial Stability Paper that describes the current role of rating agencies, examines the failures observed during the crisis, and considers the public policy response.
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GlobeNewswire: NASDAQ Group and IntercontinentalExchange seek to acquire NYSE Euronext
ICE's acquisition of NYSE Euronext's European futures markets, Liffe, Liffe US and the over-the-counter clearing business, NYPC, would leverage its existing leading derivatives markets across futures and over-the-counter markets and clearing houses in the US and Europe.
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Bloomberg: NY Fed says swaps industry failed to meet clearing promises
New York Federal Reserve Bank President, William Dudley, said that Wall Street’s largest banks and money managers failed to fulfil commitments made a year ago to enable swaps customers to use clearinghouses to back trades.
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