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Seminar paper from the year 2018 in the subject Business economics - Investment and Finance, grade: 1,0, University of Strathclyde (Business School), course: Derivatives and Treasury Management, language: English, abstract: The necessity of increased stabilisation and regulation of financial markets, especially over-the-counter markets, has received increased international attention following the financial crisis of 2007-08.1 Previously, swap markets were largely ‘in the dark’ when compared to exchange traded derivatives. The reactionary regulation, the Dodd-Frank Act, has severely tightened the OTC swaps markets through standardisation, increased collateral requirements and reporting standards and a more refined clearing mandate; to continue our analogy, it has sought to bring the swaps market into the light. Due to this increased regulation and subsequent increased costs associated with trading swaps, large swathes of swap trading migrated onto futures exchanges, in a process known as swap futurisation. This offered market participants regulatory certainty as well as a reduction in some of the more onerous costs and requirements under the Dodd-Frank Act. With eight years of trading under the Dodd-Frank regulation, our investigation into the advantages and disadvantages of swap futurisation will focus on trends seen in American data. Following on we will look more closely at the European Union’s response, namely the Markets in Financial Instruments Directive II and the Markets in Financial Instruments Regulation.
The financial crisis of 2007-2008 had led to establishment of many regulations in financial markets, mainly being the Dodd Frank Act (in US), European Markets Infrastructure Regulation (in EU regions). One of the main areas of focus by these regulations is on cleared over-the-counter (OTC) derivatives market. Prior to its regulation under Dodd-Frank, the OTC swaps markets were opaque, had very limited regulatory oversight without any central clearing requirements. Hence most of the swaps players chose to execute their swaps transactions in the OTC derivatives market. But after the Dodd-Frank Act, all OTC swaps trades are subjected to regulatory oversight, to be traded on a Swap Execution Facility (SEF), centrally cleared and reported to trade repositories. All these created a burden on financial institutions to be in compliant with these regulations. Hence all players in the industry are now reassessing the choice of venue for derivatives trades: the OTC swaps market or the futures market. The new calculus leads them out of swaps and into futures, which is the essence of the futurization of swaps. This paper explains about what led to the introduction of swap futures, how they are different from traditional swaps and the positive and negative impacts of futurization of swaps.
This book analyzes the dangers of financial nationalism in an interconnected global financial system, and discusses how international law might address them.
From the vantage point of the key powers in global finance including the United States, the European Union, Japan, and China, this highly accessible book brings together leading scholars to examine current changes in international financial regulation. They assess whether the flurry of ambitious initiatives to improve and strengthen international financial regulation signals an important turning point in the regulation of global finance. The text: Examines the kinds of international reforms have been implemented to date and patterns of international regulatory change. Provides an analysis of change across a number of financial sectors, including the regulation of hedge funds, derivatives, credit rating agencies, accounting, and banks. Offers an explanation of contemporary regulatory developments with reference to inter-state power dynamics, domestic politics, transgovernmental networks, and/or transnational non-state forces. Providing the first systematic analysis of the international regulatory response to the current global financial crisis, this ground-breaking volume is vital reading for students and scholars of international political economy, international relations, global governance, finance and economics.
Diploma Thesis from the year 2010 in the subject Business economics - General, grade: 1,3, Humboldt-University of Berlin, language: English, abstract: This paper empirically examines a subsection of the gold market that has evolved within the last 20 years. To date, academic literature has primarily focused on analytical and empirical analyses of the physical gold market and the gold price. This study will contribute to the existing gold market literature from a different perspective: the lending market. Therefore this thesis will initially investigate how the gold lending market functions in general. This will include an analytical overview of the main transaction types, the market participants and their intentions, the gold lease rate, and the impact of central bank lending policy. Secondly, it is unclear as to what the determinants of demand and supply are for the leasing market. Linking theoretical and empirical findings from the gold market and the gold price, this thesis seeks to set up a gold lending market equilibrium. With that, the gold lease rate is derived and empirically tested. The resulting determinants of the gold lease rate are developed with quarterly time-series data from 1990 to 2009.
Financial markets in Britain, and elsewhere, are in the midst of a process of fundamental structural change. The resulting shifts in the behaviour of such markets will require the authorities, in turn, to revise their regulatory and control methods. This book incorporates a series of articles by leading British monetary economists to examine both the implications of such structural changes and also to model the current working of these markets. Within this unified framework, the articles range from descriptive accounts of recent developments in bank supervision and in the structure of the London capital markets to more formal econometric studies of the inter-relationships between money and other economic variables, and of the workings of financial markets. This provides a showcase to exhibit the most up-to-date research of leading British monetary economists.
How to understand the twenty-first century food crisis Since 2007, farm-product prices have rocketed and plunged, causing hunger, malnutrition, and social and political upheaval around the world. Endless Appetites explores how "food security," the availability of food and the reasonable ability to buy it, has become one of the most challenging topics of our time. With every jump in grocery-store prices, the issue becomes more and more pressing, proven by this year's record increase in food prices, which has already topped the spike of 2008. Award-winning commodities reporter Alan Bjerga explains the food crisis and why it is happening in an accessible, articulate manner Why is this happening when more food is being grown than ever? Why are crop markets?first established in the 1800's to help stabilize agricultural commodity prices?acting like an investors' casino, with prices absorbed by rich nations taking food from the mouths of the poor? From college campuses to emergency UN meetings, "food security" is one of the hottest topics of the day, with no shortage of interest in how to stabilize food prices worldwide to close the hunger gap To understand the growing international food crisis, readers need an expert they can rely on. One of the most widely acclaimed journalists on food security, Alan Bjerga is up to the task, taking readers from the trading floor of Chicago to the highlands of East Africa to the rice paddies of Thailand on a global trek to find the causes of the food-price crisis?and the solutions.
Abstract: In many poor countries, the recent increases in prices of staple foods raise the real incomes of those selling food, many of whom are relatively poor, while hurting net food consumers, many of whom are also relatively poor. The impacts on poverty will certainly be very diverse, but the average impact on poverty depends upon the balance between these two effects, and can only be determined by looking at real-world data. Results using household data for ten observations on nine low-income countries show that the short-run impacts of higher staple food prices on poverty differ considerably by commodity and by country, but, that poverty increases are much more frequent, and larger, than poverty reductions. The recent large increases in food prices appear likely to raise overall poverty in low income countries substantially.