Posts Tagged ‘Reuters’

Event-Risk Hedging and the Woes of Rebounding Stock

Imagine how horrible it would be if Spain sorted its banking industry, and Greece generally got its act together. Wouldn’t it be awful if European stocks rebounded? Investors who are negative on European equities would say so. And, naturally, they’re hedging. “If your total portfolio is lined up for only one outcome, you may be [...]

How Now, New Cow: a Tale of New Regulatory Standards and Banking Stress Tests

The why of improving bank stress testing is easy. It would improve industry confidence and regulatory compliance. It would also set straight a bunch of Europe’s biggest banks — the ones that failed revised stress testing conducted by Credit Suisse last year. Tougher and equally compelling is the how. The European banking industry is up [...]

An Industry Win Over Liquidity Buffers

Chalk up a victory for the financial services industry last weekend in its resistance to higher capital requirements under Basel III. Institutions would still have to maintain significant buffers to prevent another round of government bailouts, but they could dip into these high-quality assets when times get tough enough. “During a period of stress, banks [...]

Meeting the Market’s Standardized Standards

Big banks lost more ground this week when a report by international regulators found that higher capital requirements would not drastically impair growth. The Bank for International Settlements in Basel stated Monday that a one percentage point surcharge increase would slow annual growth by less than 0.01 percentage points over eight years. In short, the [...]

Capital Surcharges and Market-Wide Circuit Breakers Make Regulatory Strides

Motivated by years of recession or a few terrifying minutes of market depression, last week was exciting for remedial action by regulatory authorities. Large financial institutions are looking at higher capital reserves, and traders are more likely than ever to see older circuit breaker rules give way to new ones. Cash or Surcharge? The world’s [...]

Up and Down Week for High-Frequency Trading Doesn’t Stop a Market Upswing

The reputation of high-frequency trading (HFT) seemed to swing as erratically last week as stock prices did last month. A survey found most traders wary of HFT, some on Wall Street stood up for it, but the European Union still wants to tame the technology. First Down … Large scale dark pool operator Liquidnet polled [...]

Costly Tech and Compliance, Meet Cost-Cutting Data Management

Technology and compliance expenditures seem to be growing faster than electronic trades execute. But a new form of data management may help capital markets firms cut costs.