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LIBOR Investigation Reenergizes CFTC

As the CFTC widens its LIBOR probe in the wake of a $450 million settlement with Barclays, the agency continues to apply the active approach to regulation that has been favored by Chairman Gary Gensler since he took the helm in 2009. The settlement, the largest in the CFTC’s history, is a stark contrast to...

Foreign Banks Press CFTC to Delay Swaps Rule Deadline

Faced with a looming October deadline to register as swaps dealers with the Commodity Futures Trading Commission, a foreign banking industry group is asking the CFTC to extend the deadline. The Institute of International Bankers (IIB), joined by French bank Société Générale, requested the extension in an...

CFTC’s Chilton to Propose Futures Insurance Fund

CFTC Commissioner Bart Chilton is expected to propose a fund that would protect up to $250,000 of futures customers’ money in the event of their broker’s collapse. The move is a response to recent scandals at Peregrine Financial, whose CEO has confessed to fraud spanning two decades, and at MF Global,...

Gensler Calls for LIBOR Alternative Based on Real Transactions

In a New York Times editorial Monday, CFTC Chairman Gary Gensler alluded to the recent LIBOR benchmark rate-fixing scandal in calling for a new benchmark rate whose structure would lend itself to objective verification more than the current system. Instead of blaming individual employees, as the banks...

Central Clearing Requirement to Collide With Counterparty Exposure Limit

Market participants and industry groups are expressing concern over a Fed proposal to limit counterparty exposure that may interfere with soon-to be implemented central clearing requirements for standardized OTC derivatives. Because the Fed proposal, which would cap exposure to a single counterparty at 25%...

SIFMA Backs DTCC’s Rate to Replace LIBOR

The US Treasury Borrowing Advisory Group of the Securities Industry and Financial Markets Association (SIFMA), an industry group, threw its support behind the Global Collateral Finance Repo Index – an overnight lending rate published by the Depository Trust and Clearing Corp (DTCC) – in the search for a...

Move Away from LIBOR Would Hurt Banks

Despite industry groups’ efforts to prevent a move away from LIBOR as a benchmark rate for derivatives transactions, global regulators appear increasingly likely to do just that, people with knowledge of the matter say. With many banks already having switched to overnight-indexed-swap rates for valuing...

Mini Flash Crash Hits NYSE

A number of U.S. stocks saw violent swings Wednesday, as trading firm Knight Capital Group acknowledged technical glitches in its market-making unit that affected the functionality of its automated trading systems. In an echo of the 2010 Flash Crash, the technical issue impacted 150 New York Stock...

Clearing Houses Will be Required to Submit “Living Wills”

Following in the footsteps of nine major banks doing business in the United States, clearing houses will be required to create detailed plans to be followed in the event that they need to be rescued or liquidated, global regulators said on Tuesday. The so-called “living wills” are intended to prevent a...