Manfred Wiebogen President ACI, The Financial Markets Association.
Manfred Wiebogen President ACI, The Financial Markets Association.

Benchmark fixings under review

Market stories may still be dominated at concerns over Europe’s debt crisis, Greece’s negotiations for aid, the US debt problems or the fiscal cliff and possible effects of a clumsy economy. But for us the hot spot remains regulation.

Whilst we held our ACI FX Committee meeting on November 15th in Casablanca, the US Treasury announced the following day that it is exempting both foreign exchange swaps and foreign exchange forwards from the definition for ‘swap’. As a result, FX swaps and forwards will not be subject to central clearing and exchange trading requirements but will be subject to reporting and business conduct requirements. What we traders knew from the very beginning has now become officially accepted: - The FX swaps and forwards market is markedly different from other derivatives markets. Existing procedures in the FX swaps and forwards market mitigate risk and help ensure stability. I am therefore very happy about this outcome. Simply put, these products don’t hold any ‘future unknowns’. They are a pure and simple mathematical solution. But what concerns me now, is a possible withdrawal of panel banks from benchmark fixings. Allow me to make a digression into interest rate fixings, which has...continued

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