Federal Reserve
Traders flipped long yen vol ahead of global market rout
Hedge funds and real money bought long yen volatility in the run-up to Monday’s turmoil
Corporates eye FX options as hedging costs shrink
With hedge ratios tipped to rise, dealers say treasurers are increasingly open to optionality
CBDC features will have financial stability effects – Fed paper
Design choices could cut chance of bank runs and disintermediation, authors say
Bank ALM crisis leaves FX hedgers with steeper roll costs
Spreads on EUR/USD forwards jumped more than fourfold in past two weeks
Corporates boost FX hedges as US dollar surges
Banks see more business, but also rising exposures, from corporates’ FX decision-making
Revival of FX carry strategy leaves quants unconvinced
Record returns in March give little comfort that strategy is ‘back’
Stablecoins’ would-be lawgivers don’t know what they’re missing
Bills in US Congress focus on run risk, but more detail needed on operational challenges
Fed paper explores stablecoins’ impact on financial system
Researchers say stablecoins could be a ‘digital safe haven’ during volatility, but design choices matter
FX Markets Best Banks Awards 2021: Best bank for USD/CAD – BMO Capital Markets
BMO Capital Markets is making the most of strong Canadian fundamentals, including high oil prices, political stability and the loonie’s transition from high-volatility commodity asset to safe haven
Quantum computing: kryptonite for bitcoin and cyber security
The race is on to secure new encryption algorithms for DeFi, before quantum computers become a present danger
FOMC surprise led to hedge fund losses, say traders
Fast money caught out by June dollar bounce after Fed’s surprise hawkish tone
‘Do no harm’: central bankers warn against rush to issue CBDC
Agustín Carstens, Jerome Powell and Jens Weidmann highlight risks of acting too fast
CFTC’s Behnam wants federal oversight of crypto markets
Proposal would make US first western country to regulate crypto exchanges and traders
If stablecoins are money, they should be backed by reserves
The growth of stablecoins could reduce the supply of safe collateral available to markets
US regulator casts doubt on key SA-CCR netting benefit
OCC rejects suggestion banks can net certain cleared client exposures; Fed stays silent
CLS: can’t live with ’em, can’t live without ’em?
FX settlement giant not fast on its feet, say dealers and challengers, but hard to knock down
SA-CCR proves a bitter pill for US banks to swallow
Dealers concerned new regime will punish some business lines with rise in risk-weighted assets
SA-CCR switch clouded by confusion over netting sets
An effort by US regulators to incentivise the switch to SA-CCR may be having the opposite effect
Public policy lines blur: implications for reserve managers
Crisis-fighting has pushed central banks into new forms of risk-taking, and this is now spilling into reserve management, says Jennifer Johnson-Calari
Regulators voice concerns over cloud risk
Risk USA: failure of big cloud service provider could cause “a very large shock”, says NY Fed exec
Joe Biden’s slow road to remaking US financial regulation
Moves on climate risk could come early; other changes may have to wait until the end of 2021, or later