In July 2009 the Basel Committee issued revisions to the market risk framework. At the same
time, the Committee initiated a fundamental review of the trading book. 1 We understand
that the review’s intent is to comprehensively evaluate the overall design of the market risk
amendment of 2004 and the update of 2009 including an assessment of identified Read More

Allan Grody says that LEI will allow for more sophisticated risk surveillance.
What do railroad tracks, bar codes and the World Wide Web have in common with a LEI? They are all standards – physical world standards in the case of both the width of rail road tracks and the unique product identifiers in bar codes. Read More

Restoring Glass-Stegall would be “a palliative just like the Volcker rule: simple to say, hard to do,” says consultant Allan Grody. Even under the 1933 law, he notes, financial innovators blurred the lines between commercial and investment banking – almost from the very start.
Click from examples from Grody’s forthcoming book, Reengineering the Financial Corporation

Dismantling a huge building is pretty easy – you reverse-engineer the architect’s blueprints.
Executing a will is also simple – just follow the grantor’s wishes to disburse the documented assets.
However, executing a too-big-to-fail bank’s “living will” is not a practical recipe for resolving such an institution’s troubles. Besides, there are more productive ways of risk Read More

So, the Commodity Futures Trading Commission has spoken on the subject of creating legal entity identifiers, choosing the alliance of the Depository Trust and Clearing Corporation and the Society for Worldwide Financial Telecommunication to register and maintain a system of identifying all parties to swaps transactions under its supervision.

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Allan Grody on why the LEI initative should be welcomed as a measure to increase transparency.
Capital and collateral may be the metric that supports solvency in both our financial institutions and our clearing houses but seeing what is happening proactively as transactions are conducted is what regulators believe will be the means of truly overseeing Read More

Allan Grody on why the LEI initative should be welcomed as a measure to increase transparency.
Capital and collateral may be the metric that supports solvency in both our financial institutions and our clearing houses but seeing what is happening proactively as transactions are conducted is what regulators believe will be the means of truly overseeing Read More

At the May 22 hearings of U.S. Senate Banking Committee on swaps regulation, both Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler where asked when and how they became aware of JPMorgan Chase’s hedging difficulties.
Their answers: They each heard it first through the media.
The financial crisis (and subsequent Read More

If we had a legal entity identifier in place could we have seen the problem building up? The short answer is yes.
At this week’s U.S. Senate Banking Committee hearings on Swaps regulation both SEC Chairman Schapiro and CFTC Chairman Gensler were asked when and how they became aware of JPMorgan Chase’s (JPM) hedging difficulties. They Read More

Roughly 22 years ago, the proliferation of fax machines and personal computers led to an unexpected development. The nation started running out of area codes. New York had to adopt … a third.
Then came the mobile phone and, by 2009, we were running out of area codes again.
But computers of all types – from servers Read More