A quick look at what’s on International Treasurer’s radar screen this week.
This week’s International Treasurer editorial meeting produced several topics for future articles and further examination. They included summaries of what’s on tap for coming fall peer group meetings – for both of The NeuGroup’s FX Managers’ Peer Groups (FXMPG 1&2) as well as the Global Cash and Banking Group (GCBG). Also a look at notional pooling and whether it’s a viable tool in the current environment and a further look at the recent Thomson Reuters acquisition of FXall. Finally, a look at what’s in store for rules and regulations regarding margining now that global regulatory authorities are re-examining the impact of them.
FXMPG 1&2 Agenda Calls. In September both FXMPG 1 (Sept 12-13, 2012) and FXMPG 2 (Sept 19-20) will have their fall meetings. While the agenda calls are currently taking place, members have still weighed in on what they’d like to see on those agendas. They include more discussion of the European debt crisis, updates on Basel III and Dodd-Frank and how the myriad rules have an impact on ISDAs. Also a topic for discussion will be emerging markets as well as hedging.
GCBG Agenda Call. The GCBG recently had its agenda call and what was notable here is how much members did not want to discuss the European crisis. The sense is that most members have euro crisis fatigue; their contingency plans have been drawn up and buttoned up. Now people want to focus on things like technology; they want see what’s out there to help them to better do their jobs, to get more automated in order to gain more efficiency.
Also up for discussion are possible bank downgrades and the impact on counterparty risk.
A Notional Pooling Hiatus? Amid the euro crisis and the concurrent economic uncertainty, there is speculation that notional pooling as a practice has subsided. That is, most companies involved would likely by now have converted (or are looking to) their notional holdings to hard assets. So the question is, is notional pooling dead? We’ll pose the question to practitioners as well as other experts who have a view.
Thomson Reuters’ Acquisition of FXall. International Treasurer will continue to look into what the Thomson Reuters acquisition of FXall will mean in terms of users and the market in general. In a previous story IT outlined (see related story here) what our view was of the transaction. In further examination we’ll delve into the views of current FXall users as well some on the vendor side.
Margining and Reopening Comment Period. A new consultative paper by the Basel Committee and International Organization of Securities Commissions (IOSCO) published last week lays out a few high-level principles on margining practices and treatment of collateral. The paper also proposes margin requirements for non-centrally-cleared derivatives. The CFTC followed up with a reopening of the comment period (ending September 28, 2012). We’ll see what that means and whether it is actually in the best interest of corporates to continue inveighing against margining or, given that the banks they use will be subject to margining and will likely pass on costs, should corporates seek out automated margin solutions that will mitigate those costs.