European Parliament delays futures open-access rules

European Parliament delays futures open-access rules | Execs: Libor phase-out on track, despite pandemic disruptions | IMF downgrades global outlook as debt mounts

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June 25, 2020

Daily coverage for the global derivatives industry

The European Parliament has voted to postpone open-access rules for futures by a year. The vote follows a warning from the European Securities and Markets Authority that companies are behind with preparations for the rules, which remove a need for trading and clearing to occur at the same venue.

Full Story: The Trade (UK) (6/24), Reuters (6/24), Financial Times (subscription required) (6/24), Law360 (subscription required) (6/24)

Execs: Libor phase-out on track, despite pandemic disruptions

Industry executives say the transition away from Libor remains on track to meet the end-2021 deadline, despite the coronavirus pandemic slowing some projects. However, smaller firms are more likely to struggle with the timeline than their larger rivals.

Full Story: Risk (subscription required) (6/25)

Industry News and Trends

IMF downgrades global outlook as debt mounts

The International Monetary Fund has again lowered its outlook for the world economy, predicting a 4.9% contraction this year amid rising public indebtedness because of the coronavirus pandemic.

Full Story: Financial Times (subscription required) (6/24)

Fed actions calm market disruption fears

Federal Reserve interventions appear to have helped stabilize US funding markets, with indicators of stress falling back to levels last seen in early March. Spreads between three-month Libor and the risk-free rate have slipped back, the benchmark repo rate remains under control, and banks have barely used the Fed's overnight liquidity funding facility this week.

Full Story: Bloomberg (tiered subscription model) (6/24)

Regulatory Roundup

Revamped US bank stress tests to challenge analysts

Analysts may find the results of the Federal Reserve's latest bank stress tests, due for release today, particularly difficult to interpret. Uncertainties have arisen because of the coronavirus pandemic coinciding with changes to the test methodology.

Full Story: Reuters (6/24)

Only 6.2% of Fed's promised aid used so far

The Federal Reserve had said it would provide support worth $2.3 trillion to help the US economy survive the coronavirus pandemic, but the central bank has spent $143 billion, or 6.2% of the total.

Full Story: CNBC (6/24)

ECB reportedly forms compromise for German court ruling

The European Central Bank has agreed to hand over documents demonstrating the proportionality of quantitative easing to Bundesbank chief Jens Weidmann to defuse tensions between the two sides, sources say. The move lets the Bundesbank respond to a court ruling questioning the legality of the ECB's bond buying without directly involving the ECB.

Full Story: Reuters (6/24)

Beta version of Sonia term rate available soon

UK Financial Conduct Authority director of markets and wholesale policy Edwin Schooling Latter says a beta form of a forward-looking term version of Sonia will be released soon so "participants can begin to track its behavior."

Full Story: Risk (subscription required) (6/24)

ISDA News and Events

ISDA Virtual Conferences Now Available! Upcoming topics include SIMM, Interest Rates and FpML

New Benchmarks Hub

ISDA has published a new hub on its website that pulls together useful information on the transition from LIBOR and the adoption of alternative risk-free rates. Featuring updates on ISDA's work on fallbacks and other benchmark initiatives, as well as research and analysis, the new benchmarks hub serves as a one-stop shop for information from ISDA on benchmark reform. Click here to visit ISDA's Benchmark Reform and Transition from LIBOR webpage!