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September 2011
13 September 2011
In today’s world where we have a financial war going on with many fronts it is difficult to see all the agendas out there. From time to time we see in the media, different parties blaming each other, the stock markets and the Forex markets for the crises we’ve had since 2008.n the opinions (of many), the down turn started way before 2008 and has never ended, only paused a few times here and there. But did it pause? Or did it really just get less attention in the media? It’s hard to say if we really can find the answers here.What has become more clear is that many different groups (politicians, bankers, central banks) want more regulation. Regulation of what we might ask and I will try to shed some light at this and its consequences.
13 September 2011
Outsourcing has been around for some time and it has delivered reduced costs and improved efficiency but unless outsourcing contracts are well managed new, unanticipated risks can creep in, and the outsourcing agreement can become part of the problem not the solution.It’s a long time since outsourcing has been regarded as cutting edge. A variety of models have been adopted, the technology is largely mainstream, and fund managers partitioning off non-core activities to specialist service providers has become a common practice. Innovative product development, core invest - ment functions and business development stay in-house, while commoditised processes are often farmed out. In many ways outsourcing has done what it claimed: reduced costs and improved efficiency. But it has also introduced new, and often unanticipated, control requirements into a fund manager’s organisation. As direct control of business critical functions has passed to third parties – often accompanied by direct client contact – new sources of risk have entered the enterprise. Crucially the ultimate responsibility for operational outcomes and service delivery cannot be outsourced and fund managers are well aware they still bear the reputational cost in the event of errors and problems.
13 September 2011
Matt Tuck joined Barclays Corporate (the corporate banking arm of Barclays Bank PLC) in January as Managing Director, Global Head of Financial Institutions (FI). He talks to Frances Maguire about his new role in implementing the next phase of growth in the bank’s FI business and what he believes are some of the main issues facing financial institutions today.Financial institutions continue to operate against a backdrop of substantial change. Indeed the events of the past two months have done nothing but reinforce this notion. As recently as August, we saw the financial markets once again rocked by a renewed period of turbulence and uncertainty feeding from the ongoing fiscal and sovereign debt challenges in the Eurozone; the difficulties surrounding the raising of the US debt ceiling; and a stream of weak economic data which has resurfaced fears of a second global slowdown. Against this ever-changing landscape, Matt Tuck, Managing Director, Global Head of Financial Institutions (FI), at Barclays Corporate believes that institutions need to stay close to their clients and continue to focus on understanding the global interdependencies affecting their business and that of their clients, alongside developing a clear understanding of the local markets in which they operate, to ensure they adapt their strategies accordingly.
13 September 2011
It seems that every one is looking for the light at the end of the tunnel that still eludes the world’s economies. UK growth indicators are not encouraging and inflationary pressure is coupled with job losses and real income loss. While US treasuries have remained attractive against all odds, the second round of Quantative easing finished in June and there is no further room to stimulate growth. Furthermore, market reports from the Eurozone expect a weak euro although no clear direction seems to have been taken over the medium term, writes Dean Peters-Wright.
CrossroadsThe UK, the US, Europe and Japan have all had their troubles over the first half of the year and each region has fought gallantly to continue functioning within an economic climate that has put obstacle after obstacle in the way of growth and prosperity. The circumstances have been anything other than normal and each problem solved has led to the next in a chain of events in the ongoing debt crises.
13 September 2011
What hurdles are facing banks building FX e-Commerce platforms in today’s fragmented marketplace and how are they helping customers to better manage their liquidity risks? How will the e-FX marketplace evolve and how will the market cater for the growing demand for mobile e-Commerce services? Our expert panel answers all these questions and more...The continued growth in electronic trading of foreign exchange has ensured that the future growth of banks’ FX business relies heavily upon the resilience and the innovation of their e-Commerce platforms, in what has become an extremely competitive marketplace. The emergence of foreign exchange as an asset class for portfolio diversification, as well as the growing number of algorithmic strategies adopted by hedge funds and real-money managers has also dramatically increased the percentage of FX traded electronically.
13 September 2011
All companies, large and small, financial or non-financial will soon be required to report all OTC derivative transactions they do to trade repositories, most likely by the end of next year. Frances Maguire reports.Regulation has been drafted by the European Council as well as the European Parliament and an agreed European regulation for reporting for all OTC trades is expected by the end of 2011, although there is a slight risk of a delay to until the first quarter of 2012.Trade reporting for the opaque over the counter derivatives market has arisen because in the immediate aftermath of the collapse of Lehman Brothers there was very little information available to regulators and market participants on large exposures and a better audit trail was needed. As not all OTC trades will be centrally cleared, trade repositories are being established as an independent source of information to regulators, and it is understood that both cleared and uncleared trades will be reported through these new market infrastructures.
13 September 2011
Working closely with its customers, Lloyds Bank Corporate Markets has redesigned a new functionally-rich e-Commerce platform, Arena, which launches this month. Dean Peters-Wright talks to head of product development at Lloyds Bank, Lucian Lauerman, about the launch and the reasons behind it.Creating an e-platform that offers not only precise trade execution, but a host of value-added pre- and post-trade services designed to meet the needs of a diverse client base, is quite a challenge. This is, however, exactly what Lloyds Bank Corporate Markets has achieved with the development of its new e-platform, Arena.Due for launch this September, Arena boasts an insightful and comprehensive blend of services and powerful features, whilst maintaining a user friendly environment and customisable user interface.
13 September 2011
What do regulation, transactional FX and Latin America have in common? They are all set to be hot topics at this year’s Sibos event, taking place in Toronto from 19th-23rd September. Rebecca Brace reports.On the 19th September, the financial industry will converge upon Toronto for Sibos, the annual conference organised by SWIFT. This year’s five day event is taking place in Toronto’s Metro Convention Centre and at the time of writing SWIFT was expecting at least 7,000 delegates to attend.This will be the first year that Sibos has come to Toronto, and there is a lot of excitement about the event among the Canadian financial community. As this year’s Sibos host, the cosmopolitan city has excellent credentials: as of March 2011, Toronto came in at an equal tenth position in the Global Financial Centres index and was ranked North America’s third financial centre after New York and Chicago.
13 September 2011
Over the past ten years, front-end systems have attracted the lion’s share of IT investment. Low- latency, high-speed automation has been the big-money game. Trading has gone electronic, international, multi-asset and cross-venue. As returns from commoditised long-only investments decrease, firms are looking to more complex trading and investment strategies in the search for higher yields. At the same time regulatory change is firmly on the agenda, and transparency and risk management have become the watch words of the financial markets.
Greater data demandThe amount of data needed by the average firm has exploded on every front. More venues, portfolios, customisation, indices and data-dependent asset classes have driven up volumes. Valuations are now needed daily or even intraday – not monthly and quarterly. Balance sheet information, sales reports, regional economic projections and staff track records are becoming as important as fundamental and technical data. Even if the big-name aggregators could provide all that, other new sources would still be essential to gain competitive edge.
13 September 2011
Rich in natural resources and with a strong fiscal position and a healthy financial sector, Canada fared better and came out of the recent downturn in a better fiscal shape relative to other countries. As it tries to diversify trade agreements with regions other than the US and attract foreign investment, Canada looks to an age of more service-orientated exports.Canada has grown from small populations of indigenous people to a technological, economical and political world power. It is a vast expansive land mass endowed with an abundance of natural resources that have shaped the area economically, socially and politically throughout its history. Rapid immigration from Europe and technological progress rapidly changed the face of Canada throughout recent history for ever. Canada now enjoys substantial economic fundamentals, has a rich culture and identity and has developed into a highly technological and economically strong nation with influence on world affairs. The sheer size of the country puts Canada as the second largest country by land mass in the world. It contains 10% of the world’s forestry and more importantly for the world economy at large, Canada currently has the second largest proven oil reserves on the planet. This puts Canada in a very important economic position. Canada can also boast of having one of the strongest banking systems in the world after the global credit crises.
13 September 2011
In this edition, FX-MM puts Mark Warms, General Manager, EMEA, at FXall in the hot-seat to find out his views on the impact of the financial crisis on the FX market, where the market is headed, and more.
Which piece of market regulation do you feel is the most challenging right now and why?Market participants know that change is coming. The important question, as far as our clients are concerned, is how and when? Whilst we have a general framework provided by the Dodd-Frank Act in the US, and EMIR and Mifid II in Europe, some of the specific rulemaking concerning FX markets is still in flux. The challenge is to build something that is as future-compliant as possible.A second consideration is the possibility of regulatory divergence. The global nature of the FX market means that regulatory harmonisation will be key to enabling participants to trade quickly and efficiently with their global counterparts, whilst avoiding the negative consequences of regulatory arbitrage.
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