Reported through the Wall Street Journal yesterday, the Germans have issued a bond (a German treasury note known as Schatz) with a zero coupon. This is unprecedented in some ways. What it says is that investors are so desperate that they are willing to forfeit any yield for the privilege of parking their funds for two years in what they see as safe assets as escalated debt crisis in the euro zone continue to play out in contagious and unpredictable ways. What’s driving demand? Between...

As the European and US authorities are trying to regulate pretty much everything in the financials industry in their “Prudential Regulation” stance to prevent our economies to implode, unregulated entities are thinking about getting a regulated status.. In the news today there is rumour that ICAP, one of the leading inter-dealer broker in the OTC derivatives space, is assessing whether they should buy the Plus Market,  the UK exchange for fledgling companies that is planning to...

Fidelity Mutual Fund, which started its India operations in 2004, recently announced its decision to quit the Indian Mutual fund industry. L&T Finance, a subsidiary of L&T Finance Holdings Ltd., is likely to acquire Fidelity’s India business. The new entity is likely to have a 2% market share and 13th position in the industry in terms of asset base. This will be L&T’s second acquisition in this market after the acquisition of DBS Chola Mutual Fund in 2010. India’s...

Yesterday, the Bank of International Settlements released consultative document sets out a revised market risk framework that proposes a number of specific measures to improve trading book capital requirements. (BIS Fundamental Review of the Trading Book) Amongst the points to consult on is whether to replace the “poster child of failure in the 2008 financial crisis”, value-at-risk (VaR) measure, with  expected shortfall (aka CVaR), a risk measure that better reflects “black...