Too much to say today January 3, 2013 at 2:56 pm

Like the pent-up demand released in yesterday’s equity rally, there has clearly been a lot of good writing going on over the holidays that is coming out. There is too much to comment on in detail today, so here are some highlights:

  • Lisa Pollack in FT Alphaville on reconciling between US GAAP and IFRS presentations of derivatives. The bottom line is that accounting standards are a mess, but at least footnotes will now provide some reconciliation between the differing approaches. If you level the differences, the top of the list of banks by size of derivatives balance sheet is JPM, BAC, BNP, Barclays, DB, RBS, SG, UBS, CS, GS, MS. Is anyone else as surprised by how high the French are in this list as I am?
  • Lisa again on the slightly troubling lack of clarity on who collateral posted by ERISA pension funds at FCMs should be returned to in the event of bankruptcy. Ooops.
  • A good, long read from Frank Partnoy and Jesse Eisinger in Atlantic magazine on bank disclosures. Favourite quote: “There is no major financial institution today whose financial statements provide a meaningful clue about its risks”.
  • Coppola comment on a BIS paper on safe assets (which I have yet to read, but will get to). I agree (and have been pushing) the idea that we consider the perspective whereby “the purpose of government debt is not to fund government spending. It is to provide safe assets.” (HT to Izzy for picking this one up.)
  • Ross Gittins in the Sydney Morning Herald on the gangs which run America.

2 Responses to “Too much to say today”

  1. French are big in equity derivatives, which are popular across Europe

  2. Carter – thank you, I know. But because EQD are more volatile than swaps, notionals tend to be lower. The French, SG especially, are not big in the swaps market so I wouldn’t have expected them to have such large notional balances compared to, say, MS & GS. If you had asked me to guess the order, I would have thought
    Top tier: JPM, BAC,
    Almost top tier: Barclays, DB, Citi
    Next tier: BNP, RBS, UBS, CS, GS, MS, HSBC
    Minor: SG, the Japanese, Wells, Canadians, maybe Unicredit