Friday, 22 August 2014
Last updated 28 min ago
Jan 9 2007 | 10:58am ET
Hoping to head off another Long Term Capital Management, regulators from the U.S. and Europe are together investigating loans to hedge funds, potentially presaging a move to increase margins.
The Securities and Exchange Commission, New York Federal Reserve Bank and the U.K.’s Financial Services Authority, along with German and Swiss regulators, met with 10 banks that are among the largest lenders to hedge funds last month. In an interview with Bloomberg News, SEC Commissioner Annette Nazareth called the meeting “a fact-finding effort,” and said that no decision on whether new rules are needed has been made. But one thing is clear: Any move could put a dent in the $8 billion in prime brokerage fees investment banks reap each year.
Regulators fear that a battle for business in the lucrative prime brokerage market may be inflating leverage to dangerous levels. They hope to learn how much margin banks require in loans to hedge funds.
According to Bloomberg, Bear Stearns, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley and UBS participated in last month’s gathering.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note