The trouble is, derivatives rules are weaker or nonexistent elsewhere, making the call for substituted compliance either a tactic to delay enforcement until the rest of the world updates its regulations or, worse, an attempt to avoid tough regulation altogether.
Category: Finance
Beware the Smart Money: Hedge Funds Issue Sell Signal
So, what is the moral here? It may be that hedge fund money — the so-called smart money — is not as smart as it’s cracked up to be. This contrarian indicator is not so different from those that track individual investors. Many market pros like to say when individuals become more bullish or confident, it signals a market top.
Mitigating Market Abuse
Those looking to find any unfair advantage and exploit markets are investing heavily in technology, so it is critical that regulators partner with industry solutions that have the resources to continue to innovate and take advantage of new technology such as big data, cloud computing, social media and sentiment analysis.
Watch Out, Ratings Agencies.
ABN Amro had “employed two former employees of S&P” to learn the agency’s methods, the judge said. It knew, for example, that for S&P to give the derivatives the top rating, its models had to show a likely default rate of less than 0.728%.
Getting to Normal
The de facto default by Greece early this year ended investors’ complacency. The government bonds of peripheral eurozone countries thus became toxic. Given the unprecedented nature of the Greek default, the market valuation of peripheral debt has been fluctuating widely, still searching for “fundamentals,” such as deficit or debt levels, that could explain the evolution of risk premia over time.
