Category Archives: accounting

Show me, per Dodd-Frank

May 22, 2012 – 11:30 am

The finance lawyer who blogs at Economics of Contempt has a very nice summary of what is required for JP Morgan to claim that the trades at the CIO unit are allowed under the Volcker Rule because they were “portfolio hedging”. It is a more comprehensive and textual version of our requirement that JP Morgan [...]

By John Parsons | Also posted in speculation, hedging, Dodd-Frank, regulation, measuring risk | Comments (0)

Show me

May 14, 2012 – 5:24 am

JP Morgan’s $2 billion loss on credit derivatives traded by its Chief Investment Office (CIO) has moved the debate over implementation of the Volcker Rule to the front page. Many claim that these trades are a clear example of the type of speculative, proprietary trading banned by the Volcker Rule. JP Morgan CEO Jamie Dimon [...]

By John Parsons & Antonio Mello | Also posted in Dodd-Frank, hedging, measuring risk, regulation, speculation | Comments (1)

Repo Tricks

October 18, 2011 – 1:39 pm

Brokers dealers and investment banks get a substantial amount of their funding from the repo market. In a typical repo, party #1 (the borrower) gets funds from selling securities to party #2 (the lender); when the repo matures the transaction is reversed: party #1 repurchases the securities by paying party #2 the initial funds plus [...]

By Antonio Mello | Also posted in debt/liabilities, financial innovation | Comments (0)

Shoot the messenger?

October 14, 2011 – 7:33 am

Something about yesterday’s earnings announcement by JPMorgan has folks rattled: Third-quarter results included the following significant items:$1.9 billion pretax ($0.29 per share after-tax) benefit from debit valuation adjustment (“DVA”) gains in the Investment Bank, resulting from widening of the Firm’s credit spreads… The market is pricing JPMorgan’s outstanding debt with higher spreads, i.e., at a [...]

By John Parsons | Also posted in credit risk, debt/liabilities, valuation | Comments (0)
Follow

Get every new post delivered to your Inbox.