Rules under consideration by federal regulators could require clearinghouses to back up Treasuries pledged as collateral in the $693 trillion over-the-counter derivatives market with credit lines, according to industry executives.
Markit Group Ltd., the data provider controlled by Wall Street firms including JPMorgan Chase & Co. and Bank of America Corp., probably won’t face U.S. sanctions for impeding competition in the $22 trillion credit-derivatives market, according to two people with direct knowledge of the four-year investigation.
The groundwork for preventing a U.S. Treasury default from causing a cataclysmic breakdown of the plumbing of the global financial system was laid after the last debt-ceiling crisis in 2011 -- and is still a work in progress.
The world’s largest banks and investment firms should undergo quarterly stress tests to identify risks that could sink the financial system, according to a proposal by Stanford University finance professor Darrell Duffie .
Top researchers at the Stanford University Graduate School of Business are taking diametrically opposing views on the Volcker rule, one of the most important issues in financial reform. The sharp distinctions can be seen in their public comments to U.S. bank regulators writing the rule, the part of the Dodd-Frank law that restricts proprietary trading by very large banks.
A Stanford University professor and student are seeking to fix a flaw in credit-default swap contracts that threatens to leave buyers with only part of their losses covered from a sovereign debt restructuring.
JPMorgan Chase & Co. and Bank of America Corp. are helping clients find an extra $2.6 trillion to back derivatives trades amid signs that a shortage of quality collateral will erode efforts to safeguard the financial system.