United States (US)
Market knee-jerks keep VAR models on their toes
With a return to volatility, increased backtesting exceptions show banks’ algos are stretched
Banks urged to track vendor AI use, before it’s too late
Veteran third-party risk manager says contract terms and exit plans are crucial safeguards
CFTC acting chair: ‘We don’t need a Dodd-Frank for crypto’
US regulator wants real-time market surveillance; focuses on rise of liquidity risk
US banks’ unrealised losses surge by $33bn in Q4
Led by JPM, Wells Fargo and Capital One, every major bank reported higher losses in AOCI, in reversal of previous quarter’s recovery
Large banks safer for CCPs than they get credit for
Plentiful pre-positioned liquidity softens the blow of resolution, new research argues
Basel uniformity fades as members defy dress code
Rule-makers diverge from Basel III standards, denting aims of comparability and fuelling fears over fair competition
Clients’ share of IRS clearing margin hit record high
Data from CME, Eurex and LCH shows clearing members’ house IM fell in January, pushing client proportion to 67.7%
Trump’s tariff threats stress London gold market
Cost of funding customer positions has shot up 10,000% as deliverable supplies shift to New York
JP Morgan logs two VAR breaches as trading revenue slumps
Largest trading loss in Q4 reached 262% of the bank’s VAR limit, matching a breach reported at the height of the Covid-19 pandemic
US Treasury clearing mandate poses riddle for Asian markets
Participants unclear on how far the rules will reach, or the role of inter-affiliate exemptions
Nasdaq leads push to reform options regulatory fee
Proposed rule change would pare costs for traders, raise them for banks and defund smaller venues
Comerica, Popular and Ally most battered by agency RMBS markdowns
One-fifth of investment’s value eroded as of December 2024
Looming US Basel endgame redraft sparks calls to save IRB
Experts say 20 years of data makes credit risk models more appropriate than standardised approach
AI and Trump tariffs spur hyped-up dispersion trade
Popular vol strategy pays off in January despite highest entry costs on record
Op risk data: Two Sigma pays the price for model mess
Also: KuCoin’s AML fail, Angola bribes bite Trafigura, and Trump’s green scepticism. Data by ORX News
Cool heads must guide financial regulation of climate risk
Supervisors can’t simply rely on ‘magical thinking’ of market discipline, says Sergio Scandizzo
Barclays, RBC end 2024 with record-high swaps margin
Both dealers see double-digit increases, but year sees least growth in at least a decade
First Citizens doubled pay-fixed interest rate swap book in Q4
Rejig of hedging instruments hints at higher-for-longer rate assumption
Tariff news ‘ping pong’ gives FX options desks a headache
Dealers say Trump’s shifting deadlines sparked weekend trading rush and made it hard to monetise flows
Big banks could be sidelined from future rescue deals – FSB
Exacerbation of too-big-to-fail means G-Sibs could already be too large to take extra assets
More guidance, less enforcement: the SEC under Paul Atkins
Current and former insiders expect clearer crypto rules and an end to regulatory violation sweeps