In 1992, The Quantum Group, a hedge fund led by George Soros, made a legendary trade on a bet that the GBP could not maintain its peg to the Deutsche Mark in the European Exchange Rate Mechanism, ERM. The Bank of England spent, in vain, over $3 billion attempting to defend… Read more »
BNY Mellon, a custodian bank, was this year the unhappy recipient of a record fine of 126 million pounds ($185 million) by the UK Financial Conduct Authority, FCA. The infraction was failure to keep records and reconcile clients assets and failure to segregate clients accounts. The FCA has fined a… Read more »
Marginig is typically required for future settled instruments like futures and forwards. TBA trades, a type of agency backed MBS with around $180 billion daily volume, has escaped this requirement. The New York Fed estimates up to 1.5 trillion is uncleared and unmargined. It was not until 2014 that rules… Read more »
Adding a large loan to a balance sheet is not an enticing proposition in terms of risk/rewards for a bank. Syndicated loans makes this decision more palatable as is shared among other lenders and can serve as entry point into more lucrative from the issuer. Given that the loan is… Read more »