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Daily Archives: September 4, 2013

Margin requirements for non-centrally cleared derivatives – final document

“The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) released today the final framework for margin requirements for non-centrally cleared derivatives. Under these globally agreed standards, all financial firms and systemically important non-financial entities that engage in non-centrally cleared derivatives will have to exchange initial and variation margin commensurate with the counterparty risks arising from such transactions. The framework has been designed to reduce systemic risks related to over-the-counter (OTC) derivatives markets, as well as to provide firms with appropriate incentives for central clearing while managing the overall liquidity impact of the requirements. The final requirements have been developed taking into account feedback from two rounds of consultation, as well as a quantitative impact study that helped inform the policy deliberations. Compared with the near-final framework proposed earlier this year, the final set of requirements includes the following modifications:

  • The framework exempts physically settled foreign exchange (FX) forwards and swaps from initial margin requirements. Variation margin on these derivatives should be exchanged in accordance with standards developed after considering the Basel Committee supervisory guidance for managing settlement risk in FX transactions.
  • The framework also exempts from initial margin requirements the fixed, physically settled FX transactions that are associated with the exchange of principal of cross-currency swaps. However, the variation margin requirements that are described in the framework apply to all components of cross-currency swaps.
  • “One-time” re-hypothecation of initial margin collateral is permitted subject to a number of strict conditions. This should help to mitigate the liquidity impact associated with the requirements.”

Regions with Larger Middle Classes Have More Economic Mobility

Middle-Out Mobility, Ben Olinsky and Sasha Post | September 4, 2013 “Areas with large middle classes enjoy far more economic mobility than areas with small middle classes. Consequently, low-income children who grow up in regions with large middle classes are likely to become more financially successful than those who do not. This finding provides powerful new evidence that a strong… Continue Reading

Federal Reserve Board – Beige Book – September 4, 2013

Summary of Commentary on Current Economic Conditions by Federal Reserve District, September 4, 2013 “Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand at a modest to moderate pace during the reporting period of early July through late August. Eight Districts characterized growth as moderate; of the remaining four,… Continue Reading

Web Resource Documents Latest Firestorm over NSA

“Recent press disclosures about National Security Agency (NSA) electronic surveillance activities — relying on documents provided by Edward Snowden — have sparked one of the most significant controversies in the history of the U.S. Intelligence Community. Today, the nongovernmental National Security Archive at The George Washington University posts a compilation of over 125 documents —… Continue Reading

BLS – Long-term unemployment over men’s careers

“Since the start of the recent recession, which began in December 2007, many unemployed Americans have entered the ranks of the long-term unemployed (those who are unemployed for 27 weeks or more). Long-term unemployment peaked at 46 percent of total unemployment in May 2010, well after the recent recession ended in June 2009. In contrast,… Continue Reading

Dodd – Frank Progress Report September 2013

State of Play to Date – DavisPolk Regulatory Tracker Since July 15, 2013, one rulemaking requirement deadline passed, two rulemaking requirements were finalized and no new rules were proposed to meet rulemaking requirements. As of September 3, 2013, a total of 280 Dodd-Frank rulemaking requirement deadlines have passed. This is 70.4% of the 398 total… Continue Reading

McKinsey – How to make a city great

“What makes a great city? It is a pressing question because by 2030, 5 billion people—60 percent of the world’s population—will live in cities, compared with 3.6 billion today, turbocharging the world’s economic growth. Leaders in developing nations must cope with urbanization on an unprecedented scale, while those in developed ones wrestle with aging infrastructures… Continue Reading

Paper Versus Pixel

Technology: The science of reading shows that print and digital experiences are complementary. By Nicholas Carr: “…the outlook for the printed page has brightened. New facts, equally hard, suggest that words will continue to appear on sheets of paper for a good long while. E-book sales, which skyrocketed after the launch of Amazon’s Kindle in late… Continue Reading

Comparing the Search Effectiveness of EBSCO Discovery Service, Summon, Google Scholar, and Conventional Library Resources

Paths of Discovery: Comparing the Search Effectiveness of EBSCO Discovery Service, Summon, Google Scholar, and Conventional Library Resources.  Andrew D. Asher, Lynda M. Duke, and Suzanne Wilson. Coll. res. libr. September 2013 74:464-488. “In 2011, researchers at Bucknell University and Illinois Wesleyan University compared the search efficacy of Serial Solutions Summon, EBSCO Discovery Service, Google… Continue Reading