The New York Times reports findings that the SEC has repeatedly and for quite some time given a pass to large banks on certain kinds of rule violations. Though they are not yet a reality, some banks are still viewing the creation of credit default swap futures as a big thing on the way. In testimony yesterday, ex-MF Global’s ex- risk officer says he warned senior management about the folly of overly aggressive trading, which helped to get him kicked out of the company before it went bankrupt. In the top box, a pointer to yesterday’s special report on the…
Tag Archives: Deutsche Boerse
John Lothian Newsletter: After a Delay, MF Global’s Missing Money Is Traced; Brussels blocks DB-NYSE merger; NYSE board stands by Niederauer John Lothian Newsletter,Newsletter
MF Global investigators declare that they have traced nearly all of the missing money, but they are so far unwilling to share the details for fear of harming their investigation. In Europe, regulators made their heavily-telegraphed announcement to block the DB-NYSE Euronext merger; reactions are relatively undramatic, including a thumbs-up to NYSE-E CEO Niederauer from his board. In the top box, John Lothian writes about the need to make MF Global customers whole, pointing out that one way or another, payment will be extracted from the industry for MF Global’s sins.
John Lothian Newsletter: CFTC Weighs Rules for High-Frequency Derivatives Trading Under Dodd-Frank; D Börse and NYSE challenge block to merger; MF Global Told S&P ‘Never Been Stronger’ as Failure Loomed John Lothian Newsletter,Newsletter
The CFTC begins the process of creating rules for high-frequency trading. Hopefully, a working definition of “high-frequency trading” will precede those rules. DB-NYSE Euronext send a sharp letter to European regulators, asserting that Joaquín Almunia’s recent comments are out of step with the legal case for their merger. Ratings agencies say that MF Global gave them a big thumbs-up self-assessment just days before the company exploded. France harvests negative predictions and opinions regarding its current plan to establish a transaction tax. And in banking news, the sector is awash in news about bonuses, how little they are compared to days…
John Lothian Newsletter: MF Global Clients May Lose in $700 Million Bankruptcy Fight; EU Almunia: Deutsche Bourse/NYSE Decision To Be Adopted Feb 1 Without Doubt; Illinois AG sues S&P over mortgage ratings John Lothian Newsletter,Newsletter
Ex-MF Global clients are at risk of losing hundreds of millions of dollars from the bankruptcy outcome, no matter what settlement procedure is used. Joaquin Almunia says the DB-NYSE Euronext merger (or not-merger) decision will come on February 1, no matter what certain other EU Commissioners might have to say about it. The Illinois Attorney General takes aim at S&P for its high ratings of mortgage securities. The CFTC releases a report of its review of financial firms, finding no firms declaring any mishandling of customer cash.
John Lothian Newsletter: Deutsche Boerse CEO says consolidation is inevitable; S&P Gets No Respect in Market With Lower Yields After Downgrades; World Bank warns emerging nations John Lothian Newsletter,Newsletter
DB’s Reto Franconi says that even if the DB-NYSE merger fails, he’ll still be looking for ways to merge his exchange with others. S&P’s downgrades of various countries, banks and funds creates a lot of attention, but not much immediate reaction from investors. The World Bank sounds a grim note to emerging nations, warning them to prepare for financial trouble if the European crisis continues to worsen. In the top box today, double commentary: one from Doug Ashburn of JLN FX on Mario Draghi; and one from Jim Kharouf of JLN Managed Futures on the state of the managed futures…
John Lothian Newsletter: MF Global trustee warns of pay-out shortfall; SEC, Exchange Officials Meet On Market Supervision; NYSE says no more concessions for Deutsche Boerse merger John Lothian Newsletter,Newsletter
MF Global’s bankruptcy trustee warns that it may not be able to fully reimburse 100% of the amount that customers are missing. The “flash crash” fallout continues as the SEC steps up enforcement actions and gag orders against exchanges. NYSE Euronext deputy chief executive Dominique Cerutti claims the exchange won’t make any further concessions to gain approval from EU regulators of their merger with Deutsche Boerse. And NYSE Liffe U.S. is named ‘Exchange Of The Year’ By Risk Magazine.
John Lothian Newsletter: NYSE CEO: EU Antitrust Review ‘Fundamentally Flawed’; ICE appoints LME member JP Morgan to advise on potential LME bid; New Rules on Swaps Will Protect Big Traders John Lothian Newsletter,Newsletter
Reaction to the recommended rejection of the DB-NYSE merger is loud and varied, including one from the NYSE Euronext CEO that the regulatory review was just plain bad. ICE hires JP Morgan to help them work on a bid for the London Metals Exchange, which is also in today’s news for record-breaking volume announcements, and a quarrel over whether dramatically raising fees right before being acquired is a smart decision. The CFTC yesterday voted to pass rules and proposals regulating swaps, though despite publicity and buzz regarding MF Global, the new rule does not appear to address that type of…
John Lothian Newsletter: Europe set to block DB-NYSE tie-up; Citi chief urges risk disclosure shake-up; Hedge funds lock horns with IMF on Greek debt John Lothian Newsletter,Newsletter
Early reports suggest that European regulators are preparing to reject the DB-NYSE merger. Vikram Pandit of Citigroup suggests that banks should explain the methods used to evaluate risk, providing more insight into the degree of optimism present in bank self-evaluations. Hedge funds involved with Greek debt add their name to the IMF’s “bailout complications” list. And in regulation, the CFTC prepares to vote on Dodd-Frank rules from last year; while other agencies consider including clearing houses, insurers and other types of firms to in “too big to fail” considerations that were once applied just to banks.
John Lothian Newsletter: EU Said to Prepare Draft Decision on NYSE-Deutsche Boerse Merger; Canada Cites NAFTA Breach if Volcker Adopted; Regulators Fleeing Credit Raters Embrace Zero-Risk Greek Bonds John Lothian Newsletter,Newsletter
A draft decision regarding the NYSE-DB merger is underway, and might be released as early as next week. Canada’s bank regulator joins the opposition to the Volcker Rule, saying its implementation could destabilize economies and violate free trade agreements. US banking regulators turn away from credit rating agencies (paid by those who are rated) and cast a favorable eye toward the OECD (which represents member governments and rates their bond risk as zero) as a fascinating way to escape organizations without a conflict of interest. Around the globe, the tide shifts away from 2011-in-review (including “look at all the things…