Author Archives: McCabe

China's Currency Effective Date Inclusion IMF's SDR

China’s Currency Effective Date Inclusion IMF’s SDR

China’s Currency Effective Date Inclusion IMF’s SDR

Chicken Little’s Global Currency Reset The internet is a great source for information.  But it can also be confusing when events are blown out of proportion.  This weekend was China’s Currency Effective Date for Inclusion into IMF’s SDR.  Chicken Little had a field day.  So let’s try to mop up the mess, so we can focus

Presidential Election 2016

Presidential Election 2016

The 2016 Presidential Election might be one of the most important decisions Americans make in the 21st Century.  Red Hats & Blue Hats Let me say upfront, I’m not writing this blog to sway your vote to Clinton or Trump.  It’s not a matter of Red Hats or Blue Hats. As a country of immigrants we’re risk

Lemonade for Banker’s Pay Cap

Note:  click on term to see definition Beyonce’s Sipping Lemonade This weekend, Beyonce served up the largest pitcher of LEMONADE I’ve ever seen.  In case you didn’t catch the show on HBO or missed the avalanche of publicity which followed, I’ll spill some 411.  Beyonce is mad at her husband Jay-Z because he (allegedly) had

regulation reform without consequences

Enforcing Wall Street Reform

Regulations are Boundaries Rules are important.  Regulations are important.  Boundaries of acceptable actions are important.  Just as the rules  guiding the behavior of a child, regulations are boundaries.  Telling a child they have to finish their meal and if they don’t finish, they won’t have dessert. Giving a teenager a curfew which if broken will result

Global Collateral risk tool

Global Collateral Risk Tool

Global Collateral Risk Tool Davis Polk has a new portal chock full of tools for Risk Managers.  They’ve included one of the best one-stop resources I’ve seen online in their global collateral risk tool.   Davis Polk has always done good work.  I give them Kudo’s and I’ll do so again now.  Cut this tool particularly

With Initial Margin Rules Final Let the Training Begin

Initial Margin Rules Finalized The past few years we’ve spent implementing derivatives reform.  Firms purchased software, hired CCPs and participated in compression processes.  This year a regulations will continue to become effective. Like the new rules on Initial Margin for Bilateral (OTC) Derivatives were recently finalized.  There are two good sources for information on the final margin

3 reasons initial margin & leverage ratio are unrelated

3 Reasons Initial Margin is Unrelated to BASEL III’s Leverage Ratio

APPLES AND ORANGES BASEL III plans to apply the leverage ratio to all collateral, including initial margin on cleared derivatives transactions (cleared at a clearinghouse).  Swap Market participants are looking at cost increases estimated at 60%.  A decision such as this will mean sell side will have to add on that capital charge, giving sell