Daily Content For Financial Risk Managers http://www.riskcenter.com/ daily 1 2000-01-01T12:00+00:00 There are a number of critical issues that must be addressed before the securitization of newly originated non-agency residential mortgage pools can begin. These issues will require significant legislative and regulatory decisions to be made, hopefully in the not too distant future. However, we can begin to look at what Prime collateral pools SHOULD looklike and perform in future securitizations. This can provide some guidance into likely subordination levels. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19700 2010-03-10T08:00+00:00 Richard Ellson, Ph.D and William Searle Fear is growing that Greece -- one of 16 countries that use the euro as currency -- may default on a massive pile of debt, creating a ripple effect of problems throughout Europe and beyond. Following pressure from the European Union and the European Central Bank, the Greek government on March 3 announced a new round of austerity measures -- the third such package in the last six months. Meanwhile, Wall Street banks are again facing scrutiny -- this time, for the complex financial instruments they used to allegedly disguise the country's real debt. What caused Greece's debt problem to spin out of control? And what steps should it take to remedy the situation? Wharton finance professors Richard Herring and Itay Goldstein weigh in. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19699 2010-03-10T08:00+00:00 Knowledge@Wharton In a speech to the National Institute of Economic and Social Research in London yesterday, Kate Barker draws lessons from her nine years as an external member of the Bank's Monetary Policy Committee (MPC). She suggests these might inform the Committee over the “difficult” years immediately ahead. Ms Barker steps down from the Committee on 31 May this year. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19698 2010-03-10T08:00+00:00 RiskCenter Staff Given economists forecasts of a slow recovery from the “great recession,” investors are keenly interested in how management is planning to navigate the remaining economic turbulence. This uncertain climate should make for an especially challenging annual meeting season this Spring. BDO has compiled the following list of topics that corporate management and boards of directors should be prepared to address in connection with 2010 annual meetings. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19697 2010-03-10T08:00+00:00 Jerry Walsh Back in June 2009, the Financial Accounting Standards Board (FASB) published Financial Accounting Statements No. 166, Accounting for Transfers of Financial Assets, and No. 167, Amendments to FASB Interpretation No. 46(R), which changes the way entities account for securitizations and special-purpose entities. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19696 2010-03-10T08:00+00:00 Peter Ku The Consumer Panel blamed industry pressure in forcing the FSA to re-publish a consultation on payment protection insurance (PPI) complaints and redress yesterday, so further delaying fair treatment for consumers in this vital area. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19695 2010-03-10T08:00+00:00 FSA Staff ISDA yesterday announced that it has published the ISDA Independent Amount Whitepaper and Market Review of OTC Bilateral Collateralization Practices. Collateralization has become a key method of mitigating counterparty credit risk in the derivative markets. The documents are designed to provide better understanding of current market practices. In these documents, a number of recommendations were made for market participants to enhance practice or understanding in the collateral management arena. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19694 2010-03-09T08:00+00:00 Cesaltine Gregorio Global equity markets were mixed in February, with the U.S. experiencing gains and most international markets posting small losses. During the month, the focus of hedge fund managers was on Greece and its debt level, as well as potential problems in Spain, Portugal and Italy. Managers see this only as the tip of the iceberg. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19693 2010-03-09T08:00+00:00 Hennessee Group Money is tight. But not necessarily for projects involved with increasing energy efficiency. Some innovative financing techniques are emerging to allow customers to make improvements without incurring initial out-of-pocket costs. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19692 2010-03-09T08:00+00:00 Ken Silverstein The FSA believes that it would be premature to increase liquidity requirements across the industry at the current time. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19691 2010-03-09T08:00+00:00 FSA Staff We do not expect a significant change in carbon offsets unless mandatory carbon mitigation programs are adopted at the state or federal level. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19690 2010-03-09T08:00+00:00 Dan Gruber It would have been much better for the economy if Chairman Bernanke had been this clear about mark-to-market accounting back in 2008. If he had been, the US might have avoided the Panic of 2008. But it's never too late, and now that mark-to-market ideology is affecting the ability of the Federal Reserve to exit its quantitative easing, he's finally onboard. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19689 2010-03-08T08:00+00:00 IRA Staff The February labour market report provided somewhat better than expected news. Job losses continued during February, but the decline was 36,000, which was less than the median expectation of a 50,000 decline. January's job loss deepened to 26,000 from the previously estimated 20,000 decline; however, December's data was revised to show that fewer jobs were lost. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19688 2010-03-08T08:00+00:00 RBC Financial Group Economics Department Last Friday, the Labor Department reported that the unemployment rate held steady at 9.7% during the month of February. For some perspective on the current state of the labor market, today's chart illustrates the unemployment rate by educational attainment. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19687 2010-03-08T08:00+00:00 chartoftheday.com The introduction of a leverage ratio won't help to stabilise the financial system - on the contrary. A leverage ratio would consequently handicap German universal banks in particular, although they had a much lower risk exposure than, for example, Anglo-Saxon investment banks. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19686 2010-03-08T08:00+00:00 RiskCenter Staff The economic rebound should correlate with that of the electricity sector and particularly the unregulated component of it. But despite months of uncertainty, those "merchant" utilities played it smart by locking in longer-term contracts prior to the downturn. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19685 2010-03-08T08:00+00:00 Ken Silverstein US credit card chargeoffs surged to near record levels set last fall. Late-stage delinquencies are still trending in the 4% range industrywide, which is keeping chargeoff levels in the double-digits. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19684 2010-03-08T08:00+00:00 Sandro Scenga Relationships between the largest U.S. companies and their banks remained relatively harmonious throughout the global credit crisis — at least when compared to the levels of acrimony that emerged between banks and cash-strapped small and mid-sized businesses. But the state of these relationships for the rest of 2010 will be determined in large part by the answer to a single question: As the economic recovery takes hold and big companies begin making long-delayed investments in their businesses, will their banks have the capacity and appetite to meet their increased demands for funding? Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19683 2010-03-05T08:00+00:00 Joan Weber This year, according to an annual study by BDO, a majority (56%) of chief financial officers (CFOs) at leading U.S. technology businesses are currently using cloud computing in some capacity. Further, the vast majority (90%) report their use of cloud computing will remain the same or increase this year. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19682 2010-03-05T08:00+00:00 Paige Holden According to a comprehensive private equity (PE) market report (“Global Private Equity Market Report, 2010”) a superior due diligence process followed by a quick transition to active owner involvement will be key to generating exceptional returns—in a future devoid of free-flowing credit, multiple arbitrage and mega-deal opportunities. The outlook finds that new buyout funds formed and new investments made over the next three-to-five years will likely generate gross returns in the low to mid-teens on average, several percentage points below their historic levels. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19681 2010-03-05T08:00+00:00 Cheryl Krauss Index rises by ten points in February, as employers resume recruitment activity following January's seasonal lull. Year-on-year growth rate now up a positive 2 percent, with online demand rising above year-earlier levels. Offerings in information; professional, scientific, and technical services rise, while utilities and retail decline. Online job demand rises in all of the 28 major metro markets monitored by the Index, with Detroit showing strongest monthly gain. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19680 2010-03-05T08:00+00:00 RiskCenter Staff Energy Management Systems (EMS) are being increasingly utilized by commercial building property managers to help optimize energy consumption. Automation and control capabilities enabled by EMS are most frequently focused on heating, cooling, ventilation, and lighting, which together account for approximately 57% of energy consumed in commercial buildings, according to the U.S. Department of Energy. However, a recent report finds that despite the strong return on investment for EMS deployments, just 14% of the market potential is being realized, providing a significant opportunity for new industry players. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19679 2010-03-05T08:00+00:00 RiskCenter Staff The following is written testimony of Assistant Secretary of the Treasury, Allison, before the Congressional Oversight Panel. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19678 2010-03-05T08:00+00:00 Herbert M. Allison In the past few days, both the Euro and Sterling have come under tremendous pressure from the investment community. Both have lost ground on the dollar, a currency that only 5 months ago was deemed unfit for purpose. Back then, in my commentary entitled “Why so much talk about the demise of the dollar when there are much more important issues to worry about?” I suggested that the talk about dollar's demise was way over exaggerated and that it would be literally impossible to replace it as the currency of choice for pricing most commodities by a basket of currencies, due to the practical issues of conversions, and certainly the Chinese Yuan. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19677 2010-03-04T08:00+00:00 Shahin Shojai US corporate CDS markets, while trading in a broader range, were little changed over the course of February 2010. While rising concerns of potential default in certain European sovereign contracts initially weighed on credit sentiment across the globe, risk appetite returned as expectations of sovereign default - or certainly concerns over the impact of contagion from a sovereign credit event - receded. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19676 2010-03-04T08:00+00:00 GFI Staff Market surveillance might appear an unlikely candidate to be a driving force of change and a hotbed of competition, but capital markets research and advisory firm TABB Group says that MiFID's implementation is turning surveillance, traditionally a cost centre, into a competitive edge. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19675 2010-03-04T08:00+00:00 Martin Rabkin Late last year, I spoke at and chaired a roundtable discussion at the Energy Risk Conference in Prague, Czech Republic. One of the roundtable participants was Mr. David Kučera, General Secretary of the Prague Power Exchange (Power Exchange Central Europe, a.s.) and I was fascinated to learn something of the challenges and hurdles he and his colleagues had gone through (and may yet still face) in working to create an exchange here in Central and Eastern Europe. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19674 2010-03-04T08:00+00:00 Gary M. Vasey, Ph.D. To move smart grid initiatives forward in the Northeast United States, keeping the public aware of what a more intelligent utility can mean to their lives is critical. The benefits of a smarter, more robust grid and the consequences of not having one must be clearly communicated to garner broad public support. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19673 2010-03-04T08:00+00:00 Mike Breslin The securitisation market in Germany has been at a virtual standstill for the last two years. "There's actually no justification for the loss of confidence in German securitisations, especially securitisations of SME loans, where losses were far lower than expected even during the crisis. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19672 2010-03-04T08:00+00:00 RiskCenter Staff According to the most recent Quarterly Banking Profile published by the FDIC, net-interest margin (NIM) for the banking industry "in 2009 was 3.47 percent, the highest annual average since 2005," but we already see evidence that NIM is starting to fall at some banks. More important, the corrosive effect of ZIRP on money market funds and other interest rate sensitive investors is becoming critical. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=19671 2010-03-03T08:00+00:00 IRA Staff