Emily
Editor, Senior Moderator
This article was published prior to the FTX scandal. Look at what chumps most of these people were. It doesn't bode well for financial stability.
https://worldnewsera.com/news/finan...n-kinda-maybe-slightly-default-in-march-2020/
Did a major financial institution kinda maybe slightly default in March 2020?
Madeleine Bruder May 27, 2022
On Wednesday the Commodity Futures Trading Commission hosted an industry roundtable to discuss FTX’s proposal for a new derivatives risk management framework. Inadvertently, someone dropped a bombshell about the market turmoil of March 2020 that has triggered a spasm of speculation at FTAV Towers.
Most of the day’s chatter was naturally focused on FTX’s Sam Bankman-Fried, unusually dressed in a suit for the occasion. The FT’s Gary Silverman and Philip Stafford wrote a good piece on FTX’s proposal. But @Mechanicalmarkets on Twitter highlighted an overlooked comment from ICE’s Chris Edmonds, the exchange group’s chief development officer:
...
Well damn.
FT Alphaville has heard rumours that the clearing system creaked more than authorities have let on, but this is the first time someone in the know has indicated it was near breaking point.
And make no mistake, it was. According to the BIS, the daily collective demands from clearing houses for variation margin, an insurance to protect against fluctuating market prices, rose to $140bn compared to just $25bn a few months earlier. That’s an awful lot of money to find when markets are in wild convulsions.
...
ICE’s rival CME Group, trade bodies like ISDA and the assorted academics can be excluded. Edmonds’ comments about “big shops” implies that it wasn’t one of the smaller outfits, like CoinFund. Edmonds using the pronoun “he” is another clue. Big asset managers like BlackRock and Fidelity are unlikely, and aren’t members of ICE Clear.
So our admittedly half-arsed Sherlock Holmes deductions suggests it was probably a prop trader/market maker or one of the big banks — Citadel, Citi, DRW, Jump Trading, Morgan Stanley and Virtu — as the main candidates fitting the bill. If Edmonds was deliberately trying to obfuscate things with the “he” pronoun we can throw JPMorgan and Goldman Sachs into the mix as well...
https://worldnewsera.com/news/finan...n-kinda-maybe-slightly-default-in-march-2020/
Did a major financial institution kinda maybe slightly default in March 2020?
Madeleine Bruder May 27, 2022
On Wednesday the Commodity Futures Trading Commission hosted an industry roundtable to discuss FTX’s proposal for a new derivatives risk management framework. Inadvertently, someone dropped a bombshell about the market turmoil of March 2020 that has triggered a spasm of speculation at FTAV Towers.
Most of the day’s chatter was naturally focused on FTX’s Sam Bankman-Fried, unusually dressed in a suit for the occasion. The FT’s Gary Silverman and Philip Stafford wrote a good piece on FTX’s proposal. But @Mechanicalmarkets on Twitter highlighted an overlooked comment from ICE’s Chris Edmonds, the exchange group’s chief development officer:
...
Well damn.
FT Alphaville has heard rumours that the clearing system creaked more than authorities have let on, but this is the first time someone in the know has indicated it was near breaking point.
And make no mistake, it was. According to the BIS, the daily collective demands from clearing houses for variation margin, an insurance to protect against fluctuating market prices, rose to $140bn compared to just $25bn a few months earlier. That’s an awful lot of money to find when markets are in wild convulsions.
...
ICE’s rival CME Group, trade bodies like ISDA and the assorted academics can be excluded. Edmonds’ comments about “big shops” implies that it wasn’t one of the smaller outfits, like CoinFund. Edmonds using the pronoun “he” is another clue. Big asset managers like BlackRock and Fidelity are unlikely, and aren’t members of ICE Clear.
So our admittedly half-arsed Sherlock Holmes deductions suggests it was probably a prop trader/market maker or one of the big banks — Citadel, Citi, DRW, Jump Trading, Morgan Stanley and Virtu — as the main candidates fitting the bill. If Edmonds was deliberately trying to obfuscate things with the “he” pronoun we can throw JPMorgan and Goldman Sachs into the mix as well...