Speaker's Box

Major regulatory changes, evolving market structure and funding challenges are making capital efficiency more imperative. Against this backdrop, the economics of derivatives and cash activities are being reshaped. OpenLink's Mark Abrams explains how a holistic approach to risk management — especially in regard to counterparty risk and collateral management — can play a pivotal role in improving your firm’s efficiency and maintaining its competitiveness.    

BISS Research’s Gary Wright explains why the fragmentation of  the CCP landscape in Europe, which is further complicated by the push for OTC derivatives onto exchanges, will cost the market more and introduce more operational burdens all while not reducing the risks expected.

The OTC derivatives reform is opening up the industry to new operational risks, primarily due to the sheer magnitude of the system and process changes needed to be accomplished in a relatively compressed timeframe. Rule Financial’s Ciaran Henry explores the operational challenges associated with the Dodd-Frank compliance marathon now underway and offers insight into the complexities of processing trades in a new post-trade workflow including the challenges in trade reporting and data management.

Two recent cases before the High Court have returned to the question first raised in Marine Trade S.A. v Pioneer Freight Futures Co Ltd as to whether or not a non-Defaulting Party to an ISDA Master Agreement is entitled to withhold payment to a Defaulting Party pursuant to Section 2(a)(iii) whilst simultaneously enforcing the Defaulting Party’s payment obligation in full.

Catalyst's Stephen Loosely questions if clearers and clearing houses are going far enough with stress testing and suggests a wider testing of assets and liabilities is crucial to effect risk management.

Clearing houses stress test the cleared liabilities of their members to protect themselves against extreme losses in a default. Regulations direct what stress testing should provide for. On the surface, it looks like we’re all safe. But we’re missing something big.

The WMBA's Alex McDonald discusses how aggregated reporting of trades executed via trading facilities and interdealer brokers can provide the information on key market risk factors and trade activity required to allow for greater market supervision and transparency

Regulatory reform still faces delays and disagreements between the US and UK, which could have dire consequences on the derivatives industry if harmonisation is not achieved and all potential implications are not given appropriate attention. Roger Barton of Financial Reform Consultancy offers his personal predictions and questions to be answered regarding EMIR, MiFID II, systemic risk and global regulatory harmonisation.

David B. Weiss, an independent consultant and research analyst, discusses the current state of SEFs and what the future holds for these trade execution facilities

Derivatives have always been synonymous with change, but the current levels of change are unprecedented. This is due to numerous impacts on market participants and organizational functions by the derivatives transformation imposed by the regulators on the financial industry. Capco's Samuel Ely discusses opinion of general themes and trends going far into the future and the ‘end game’ for derivatives clearing rather than commenting on the present environment. 

When it comes to implementing and updating complex risk management IT systems, financial institutions have been at the mercy of technology vendors. Peyman Mestchian of Chartis Research explains how open architecture risk and trading analytics platforms are handing power over to end-users.