Finance

The growing role of bitcoin: What’s next for cryptocurrencies?

1008061_Bitcoin

Welcome to Thomson Reuters Exchange! We created Exchange, as the name suggests, as a forum for dialogue, a digital publication where ideas and insights, information, news and analysis can be exchanged and shared across the global ecosystem of professionals in a dynamic, interactive format. We invite you to experience the rich content and interactive features on your iPad or Android tablet by downloading it from the App StoreGoogle Play or on Amazon. Or, to learn more about Exchange and stay abreast of the latest features, functionality and content in this issue and subsequent issues, visit our website.

This week’s post is by Vincenzo Dimase, FX Market Development Manager Europe West at Thomson Reuters.

Since their introduction in 2009, cryptocurrencies have attracted the attention of a variety of stakeholders in the financial community, from private investors to financial institutions and authorities. In the new landscape of cryptocurrencies, bitcoin has the highest market capitalization.

Leveraging advanced encryption technologies, bitcoins: (more…)

The asset servicing evolution, changing market players & new business models

Interview with Stuart Martin, Global Head of Asset Servicing, Thomson Reuters explores the changing landscape for Asset Servicers, the new roles for Prime Brokers, changing business models and the impact of regulation on the Asset Management community.

For more information simply visit our Pricing & Reference Data community.

The important role of sukuk in the Basel III era

By Dr. Sutan Emir Hidayat, Director of the MBA Program, University College of Bahrain

The implementation of Basel III rules has created several challenges to Islamic financial institutions (IFIs) especially with regards to capital adequacy and liquidity requirements. Basel III primarily requires all banks, including Islamic banks, to strengthen their capital and liquidity positions by holding higher quality capital, which would enable banks to absorb financial shocks, and maintain higher level of liquidity, which enables banks to reduce their dependency on money market instruments.

Basel III requires all banks to maintain the minimum ratio of 4.5% for tier 1 common equity capital, an increase from 2% required by Basel II. Basel III also changed the minimum requirement for additional tier 1 capital and tier 2 capital to 1.5% and 2%, respectively, from 2% and 4% previously required by Basel II. In addition, Basel III requires banks to maintain 2.5% capital preservation buffer and 0-2.5% countercyclical capital buffer.

In addition, Basel III also redefines the meaning of capital. According to Basel III, the components of tier 1 capital consist of common equity as core capital, and preferred stock and hybrid securities as additional capital. Subordinated bonds and loans are counted as tier 2 capital.

Given the uniqueness of Islamic banks’ products and operations, the implementation of Basel III rules for Islamic banks and other IFIs requires more clarification. The Islamic Financial Services Board (IFSB) released IFSB-15 in December 2013 with the purpose of introducing a framework for capital adequacy and liquidity requirements to suit the uniqueness of IFIs.

IFSB-15 (more…)

Risk data challenges, survey feedback & market insight

In this interview Kate Toumazi, Global Head of Risk Data Services with Thomson Reuters, outlines the latest challenges impacting the Risk Management function as it relates to the use of Risk Data Services, provides insights into their latest risk market surveys and provides a deep insight into how the market is addressing these challenges.

To read some related whitepapers, visit our Pricing & Reference Data community.

Weekly Investment Banking Scorecard

deals intelligence

This week’s $17 billion US-dollar denominated investment grade corporate debt offering from Medtronic ranked as the largest US-dollar offering this year and pushed volume to a record $1.11 trillion for year-to-date 2014, a 7% increase compared to year-to-date 2013. For the first time since records began in 1980, the average deal size for US-dollar investment grade offerings has surpassed $1.0 billion for year-to-date 2014. Healthcare corporate bond offerings in the United States total $82.9 billion so far this year, a 66% increase compared to a year ago

Weekly Highlights: (more…)

Addressing the Know Your Customer Challenge

In this video Anna Mazzone, Global Head of Accelus Org ID, KYC managed service at Thomson Reuters discusses the challenges the industry is facing around Know Your Customer (KYC), Anti-Money Laundering (AML) & Terrorist Funding regulations, what best practices are taking place in the market today and the differences between proposed market utilities and managed service offerings.

The Conversation: An Open Dialogue

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Welcome to Thomson Reuters Exchange! We created Exchange, as the name suggests, as a forum for dialogue, a digital publication where ideas and insights, information, news and analysis can be exchanged and shared across the global ecosystem of professionals in a dynamic, interactive format. We invite you to experience the rich content and interactive features on your iPad or Android tablet by downloading it from the App StoreGoogle Play or on Amazon. Or, to learn more about Exchange and stay abreast of the latest features, functionality and content in this issue and subsequent issues, visit our website.

Exchange invited two customers – Markus Schulz, Chief Compliance Officer at GE Capital International and Errol Hoopmann, Managing Director at Dubai Financial Services Authority – to talk about what “open” means and why it matters to our industry.

Exchange: What does “open” mean to you as an individual in your day-to-day role?

Markus Schulz: Open to business. Open to new ideas. Open to change. And change most likely being the only constant in business life these days. But (also) “open” as opposed to “closed,” e.g., substitute “open” with “we want” and “closed” with “we don’t want.” (more…)

A forward look into risk, regulation & data

In this video Marion Leslie, managing director, Pricing & Reference Services at Thomson Reuters talks about the trends taking place in the market, what new best practices are developing, and what regulatory changes are in store for 2015.

Recent enhancements for Thomson Reuters Eikon Messenger

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Read more on our Financial & Risk blog.

The opportunity for ethical sukuk

By Michael Bennett, Head of Derivatives and Structured Finance in the Treasury Department of the World Bank

Islamic finance shares a strong similarity with ethical investing. Like ethical investors, Shariah-compliant investors demand that their investments not only be attractive in economic terms, but that they meet certain non-financial criteria as well. In the case of Shariah-compliant investors, these non-financial criteria involve compliance with Islamic law and principles.

Growth of ethical investing

The concept of ethical investing – investors using their money to promote ethical activities and social good – has deep roots in the doctrine of many religions. Islam, Christianity and Judaism, for example, all share a focus on the individual’s moral responsibility to use money in a way that betters one’s community and is consistent with one’s faith. These religious prescriptions have impacted individual investment decisions for centuries.

Over the past few decades, ethical investing has grown from being just a matter of individuals exercising their faith to become a comprehensive investment strategy. A large and growing number of individual and institutional investors, including asset managers, pension funds and university endowments, now include achieving certain social, environmental or corporate governance objectives as a part of their money management process. In making investment decisions, these investors overlay a qualitative analysis of a company’s policies or practices in the specific area or areas of concern to the investor onto their quantitative analysis of the company’s financial condition and prospects.

Ethical bond market (more…)