CFTC regulations on trade reconstruction are changing the way firms need to think about compliance. Here’s a step-by-step guide to get started.

The Dodd-Frank Act unleashed an avalanche of new rules affecting the financial industry, chief among them the trade reconstruction requirement, which mandates that swap dealers are able to produce a complete reconstruction of a trade within 72 hours of a request by the Commodities Futures Trading Commission (CFTC). To solve for this complex challenge, swap dealers/firms must develop capabilities for correlating a broad range of structured and unstructured pre-trade, trade and post-trade data.

Bloomberg Vault recently hosted a webinar “Trade Reconstruction for Compliance Officers,” presented by Harald Collet, Global Head of Bloomberg Vault, and moderated by Mitch Avnet, Managing Partner, Compliance Risk Concepts, to help compliance officers understand the challenges and think strategically about the process.

“The endpoints of the reconstructed trade is to tie together the different elements: The structured data, including execution and post-execution confirmation and ledger data; unstructured data, such as sales and marketing; and finally communications data, the most complex data,” says Collet. (read more…)

The Milken Institute is working to give policymakers, media, and the academic community a deeper base of knowledge when it comes to global banking issues. The Institute’s recent launch of GlobalBanking.org offers users a new and unique way of accessing information on banking systems worldwide and their regulatory environment. The site aggregates World Bank data from 180 countries in addition to its own independent research and analysis on an open platform that is accessible to anyone.

“Never before has this kind of information been collected and presented in such an easy-to-use way,” said Staci Warden, executive director of the Milken Institute’s Center for Financial Markets. “We are confident that it will be a tremendous resource for anyone working in this area.”

The aim of GlobalBanking.org is to build a database of international banking facts and figures, increasing transparency regarding the worldwide banking environment. Key features include ease of use and the ability to incorporate data into independent research by users; interactive charts and maps; up-to-date news and expert commentary, and global banking reports. (read more…)

In the past three decades the income inequality gap has exploded across the United States. We typically view rising inequality through the lens of class; focusing on the growing disparity between the top 5% or 1% of the population and the bottom 10% or quartile. But looking at income inequality from this vantage point misses a critical dimension: there are serious gaps between economic sectors and in particular, the financial sector of the economy has grown disproportionately wealthy compared to other sectors. This gap not only has profound consequences for the distribution of income but also has negative effects on the overall growth and development of the U.S. economy.

Beginning in 1980, financial sector deregulation began in earnest, encouraging investment in financial sector expansion and attracting a greater percentage of college and high-school graduates. This shift to the financial services sector has contributed both to the growing inequality of wages between workers in the “real” economy – which produces goods and non-financial services and drives most of the employment growth — and the “financial” economy – which has higher wages and is siphoning off talent from the real economy. (read more…)

Former Treasury Secretary Timothy Geithner’s book Stress Test: Reflections on Financial Crises hits bookstores on Monday. Ahead of the release, Geithner sat down for some yummy food and friendly conversation with Andrew Ross Sorkin of The New York Times. Here is a dissection of the puff piece that ensued.

  • “When the housing bubble burst in 2008, Geithner was the president of the Federal Reserve Bank of New York. Along with Ben Bernanke, the chairman of the Federal Reserve, and Henry M. Paulson, the Treasury secretary at the time, Geithner was charged with essentially saving the economy from sliding into the abyss.” — Let’s just skip the part about how if those same three guys had kinda, maybe, sorta been doing their jobs all along, they probably wouldn’t have found themselves staring into such a daunting “abyss.”
  • “The perception that he was overmatched for the position was strengthened when he responded to a congressman’s question at a second hearing by saying: “I just want to correct one thing.
  • (read more…)

A collection of sage investment executives gathered at the Milken Institute Global Conference this week to discuss the state of financial markets. Here is some of the insight shared by panelists during the Reading the Tea Leaves: Where are Markets Headed? session.

Michael Cembalest, Chairman of Market and Investment Strategy, J.P. Morgan Asset Management

Cembalest says he is watching four issues closely: two market issues and two policy issues. Citing the remarkable correlation between manufacturing surveys and corporate profits that follow three to six months later, Cembalest said, “The next couple quarters of business surveys and corporate-profits growth are probably more important than they have been in a while.”

On the policy side, Cembalest shared insight on brewing energy and housing matters. “It would be a huge mistake to accelerate the pace of [liquefied natural gas] exports. … There is a huge multiplier-effect benefit from the U.S. having electricity prices for homes and businesses that are 50% to 60% of what the rest of the world pays. (read more…)