Archive September 2018

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Week InReview: September 28, 2018

Is active management good? It depends.

"Taken as a whole, our review of the current academic literature suggests that the conventional wisdom is too negative on the value of active management. The literature that followed Carhart (1997) has documented that active managers have a variety of skills and tend to make value-added decisions, such that, after accounting for all costs, many actively managed funds appear to generate positive value for investors. While the debate between active and passive is not settled and many research challenges remain, we conclude that the current academic literature finds active management more promising for investors than the conventional wisdom claims."

From Challenging the Conventional Wisdom on Active Management: A Review of the Past 20 Years of Academic Literature on Actively Managed Mutual Funds by Martijn Cremers, Jon Fulkerson and Timothy Riley

Week InAdvance: September 24, 2018

Week InAdvance | Mon Sep 24 Climate Week NYC. | Tue Sep 25 Mutual savings on OCC's agenda. | Wed Sep 26 SEC fraud roundtable. FOMC rate decision. One Planet Summit in NYC. | Thu Sep 27 CFTC considers CPOs & CTAs. GSEs in the House. | Fri Sep 28 House panel meets on financial markets in the digital era.

Week InReview: September 21, 2018

Wall Street fears the end of an era.

Some of the world's largest banks suspect that interdealer brokers - who only broker trades between banks - may secretly be allowing buy-side clients to trade in the interdealer market.

"The traders aren't claiming any laws are being broken. But they say that - in addition to their own profits - it's threatening long-standing conventions that have helped maintain market integrity and liquidity. One senior trader at a French lender said banks often try to buy or sell bonds for clients in the interdealer market, and if those investors are also present on the platforms then their ability to trade will decrease."

Bond Dealers Say Hedge Funds Gatecrashed Their Exclusive Club

Week InAdvance: September 17, 2018

Week InAdvance | Mon Sep 17 G20 Think 20 Summit. | Tue Sep 18 Senate fintech hearing. | Wed Sep 19 Basel Committee meets. | Thu Sep 20 Regulation Best Interest at the SEC. | Fri Sep 21 SEC HFT & liquidity forum. Quadruple witching day. | Sat Sep 22 Autumn equinox.

Week InReview: September 14, 2018

Crisis Retrospective

Tomorrow marks the 10th anniversary of the bankruptcy of Lehman Brothers. A look ahead to the next crisis, Can We Survive the Next Financial Crisis?, is a nuanced look at the important ways in which the system that led to the last crisis has become safer and also the pockets of risk that have grown since 2008.

Week InAdvance: September 10, 2018

Week InAdvance | Mon Sep 10 G20 meetings in Paris & Amsterdam. | Tue Sep 11 WEF ASEAN 2018. | Wed Sep 12 FSOC closed session. | Thu Sep 13 SEC investor advisory panel meets. IMF sovereign debt conference. | Fri Sep 14 MSRB compliance workshop.

Week InReview: September 7, 2018

The government's new strategy to crack down on 'spoofing'

The U.S. government has changed its approach in pursuing spoofing cases by charging traders under a wire fraud statute, rather than using the Dodd-Frank Act, to have more time to build a case. But proving fraud, rather than spoofing, requires more evidence, and that might give traders incentive to continue aggressive trading. (The New York Times | Sep 4)

Week InAdvance: September 4, 2018

Week InAdvance | Tue Sep 4 OECD Blockchain Forum in Paris. UN climate change conference in Bangkok. | Wed Sep 5 Fed's Beige Book. | Thu Sep 6 GSE reform in the House. | Fri Sep 7 Boston Fed conference.