The Wall Street firm’s coders can continue to work from home two days a week, according to people briefed on the firm’s plans. They’re not alone. Across financial services, the software engineers who have been at the heart of talent wars are winning more freedom than the bankers they work with.

By Julie Segal May 24, 2021, Institutional Investor Hedge funds have fallen short on their promises — and new research expects that performance will continue to trail the broader market for at least the next five years.

Aggregate hedge fund performance has declined over the past decade, according to a research paper that will be published in the CFA Institute’s Financial Analysts Journal.full article

By Thomas Hale, Harriet Agnew, Michael Mackenzie, and Demetri Sevastopulo May 28, 2021, Financial Times When the Biden administration announced a fresh investigation into the origins of the Coronavirus outbreak in Wuhan on Tuesday, the Chinese reaction was swift and furious.

Zhao Lijian, foreign ministry spokesperson, accused the US of “political manipulation” and of “stigmatizing” China — the sort of regular spat that has prompted growing comparisons to the cold war.full article

By Brian Chappatta May 28, 2021, Bloomberg Over the past couple of weeks, I’ve been tweeting near-daily updates of the following chart, which shows the amount of cash placed at the Federal Reserve’s overnight reverse repurchase facility. Use soared to a record $485.3 billion on Thursday, capping an unprecedented surge:

By Alexandra Scaggs May 28, 2021, Barron’s More than a year after the pandemic, US officials are looking at ways to prevent Treasury-market blowups like the one that happened last year. 

One popular idea falls outside the debate on hedge funds or bank regulations: Officials want to make it easier for foreign governments to trade Treasuries for cash in a crisis without having to offload securities. full article

By John DizardMay 29, 2021, Financial Times

Sometime before the end of this year, at the intersection of Wall Street and the Washington swamp, a deal is going to have to be done about how the US government funds itself.

Into the mix will be a push for reforms to ensure that a rapidly rising pile of government debt can be traded without overwhelming the financial system.full article

By David Heun May 28, 2021, American Banker Clean data is key to instant payments, real-time settlement, open banking initiatives and blockchain technology — but such details are often lost or garbled when sent between parties. To better preserve this data, the US financial services industry is turning to the ISO 20022 messaging standard.

Essentially, ISO 20022 allows banks and corporations to handle cross-border payments that can carry extensive information in standardized data fields, taking much of the mystery out of each transaction and allowing banks to streamline other operations because of this added clarity.full article

By Benjamin Purvis and Alex Harris May 28, 2021, Bloomberg There’s so much spare cash sloshing around US funding markets that investors are choosing to park almost half a trillion dollars at the central bank — earning absolutely nothing.Usage of the Federal Reserve’s reverse repo facility — a mechanism that’s part of the central bank’s arsenal for helping to steer short-term interest rates — surged on Thursday to an unprecedented $485.3 billion. And with the forces driving the dollar glut still some way from abating, that figure could climb further, adding fuel to an increasingly complex debate about what the Fed should do with its various tools to keep a rein on policy.full article

By Huw Jones May 27, 2021, Reuters A hasty shift in euro-denominated derivatives clearing from London to Frankfurt to meet European Union post-Brexit demands may drive business to New York and shackle the 27-member bloc’s capital market, banks warn.The future of where euro derivatives are cleared for customers in the bloc became a focal point in the Brexit debate, with EU politicians keen to wrest control of the 100 trillion euro ($122 trillion) market away from the City of London after Britain quit the EU.full article

By Alice Tchernookova May 27, 2021, Practice Insight from IFLR Recommendations recently made by the European Central Bank’s (ECB) euro risk free rates (RFR) working group on fallbacks for the euro interbank offered rate (Euribor) have failed to address some key market concerns, source have said. “The consultation was answered by 65 participants and 50 banks, which is hardly a meaningful representation of the market,” said Marc Henrard, managing partner at Murisq Advisory. “The consultation responses summary provides statistics on the results, but some respondents expressed concerns that have not been resolved. This could have been an opportunity to answer them, but at this stage, it seems that the working group did not take advantage of it.” full article

NEW YORK/LONDON, Aug 20 (Reuters) - What appears to be a large bet placed this week in the eurodollar futures market that tracks short-term funding rate expectations over several years is signaling potential excessive year-end demand for U.S. dollars from banks and corporations.

The volume for eurodollar futures contracts expiring December 2021 spiked on Thursday, which includes a massive open position of 200,000 contracts.

Eurodollar futures is a bet on the direction of the short-term secured overnight financing rate (SOFR), the benchmark interest rate that is replacing Libor, which global banks use to price U.S. dollar-denominated derivatives and loans.

Traders also use these futures to speculate about the direction of U.S. monetary policy.

TOKYO—Half or more of Japan’s huge government debt doesn’t really exist. And even if it does, the country needs a lot more of it.

Those are a couple of the arguments being heard in Tokyo as the rich world’s most-indebted government relative to its size prepares for a new round of spending this fall that could reach into the hundreds of billions of dollars.

Japan often serves as a tryout venue for policies that later debut on the world economy’s biggest stage, the U.S. The Japanese central bank was a pioneer in introducing zero interest rates and buying large quantities of government bonds to stimulate a sluggish economy, tools subsequently used by the Federal Reserve.

In debt as well, Japan has led the pack. Its central-government debt first surpassed the size of the economy about 20 years ago. Now the U.S. is crossing that threshold too, and Congress is debating trillions of dollars more in proposed spending.

Tokyo’s central government is...

The systemic footprints of large European banks increased over 2020, which may cause some lenders’ too-big-to-fail capital add-ons to rise come November.

Data from a steady sample of 31 European Union and European Economic Area firms shows an aggregate increase year on year in the values reported for 10 of the 12 systemic risk indicators used by the Basel Committee on Banking Supervision to designate global systemically important banks (G-Sibs).

Two major U.S. money-transfer services have suspended payments into Afghanistan, and American banks are more closely scrutinizing transactions with Afghan counterparts, as they await clarity on whether U.S. sanctions on the Taliban apply across the nation now that the Islamist group is in control.

The result could deepen the country’s financial crisis in the near term and, if sanctions apply more broadly to any business dealings with the Taliban-controlled nation, Afghanistan could join North Korea and Iran as pariahs in the international financial system.

Heightened caution by banks risks slowing flows of money needed to carry on trade and other transactions. The decision by wire-transfer services Western Union Co. and MoneyGram International Inc. to stop doing business in Afghanistan restricts the flow of overseas payments that are a key source of support for many Afghan families.

Earlier guidance by the world’s terror-finance watchdog organization,...

WASHINGTON — As the Taliban attempt the precarious shift from insurgent movement to functioning government, Afghanistan is facing the heightened risk of a financial collapse after being propped up for the past two decades by foreign aid that now accounts for nearly half its legal economy.

The fate of the Afghan economy will be determined by decisions that the Biden administration and other countries must make on whether to recognize the Taliban as a legitimate government. In the meantime, the United States and the international community are already shutting the flow of money, leaving Afghanistan in the stranglehold of sanctions that were designed to cut the Taliban off from the global financial system. Analysts say the looming shock threatens to amplify a humanitarian crisis in a country that has already endured years of war.

Signs of strain were evident this week as the value of Afghanistan’s currency, the afghani, plunged to record lows and the nation’s most...