The Credit Plumber

Shrinking the OTC derivative markets. Stop transferring so much risk; It undermines going concern status.

The credit plumber — Mon, 12 Nov 2012 12:42:45 +0000

It’s been a while since I last posted. You have enough to read. But sometimes issues are so fundamental to a debate – and get such little airing – that I must make the point. And twitter, whilst my preferred medium, isn’t sufficient. So, whilst carrying on my day job of re-plumbing some elements of …

The Banks Achilles’ Heel? Understanding What Their Clients Need.

The credit plumber — Fri, 13 Apr 2012 16:09:09 +0000

Statue of Achilles. David Murphy (Deus Ex Macchiato) & I exchanged some views on his helpful series on Credit Valuation Adjustments on FT Alphaville this week which is a minefield to me.However, risk transfer and corporate funding are not. So this passage caught my eye (my emphasis) There is another area where the CVA rules …

A Central Banker who speaks plain English; “Break them up.”

The credit plumber — Sat, 24 Mar 2012 12:22:25 +0000

Deus Ex Macchiato provide a link to one of the finest summaries of the financial crisis I have read ; “Choosing the Road to Prosperity” by Federal Reserve Bank of Dallas Director of Research Harvey Rosenblum. Preceding it is a letter from the Dallas Fed President, Richard Fisher, quoted as being “one of the more …

Reducing Bank Regulatory Capital in a Basel II/III world: A Case Study

The credit plumber — Mon, 19 Mar 2012 21:33:52 +0000

Sober Look and I had an online discussion regarding his post about the hidden pitfalls of Basel III. He suggested there had been some interest in my comments and could I provide a case study. I duly did this evening (finally) and sent him a simple version of a generic case which I have amended …

The Pernicious Derision of a Health & Safety Culture by Those Who Brought Us The ‘Free Market’.

The credit plumber — Sun, 18 Mar 2012 12:04:56 +0000

I was a catastrophe underwriter for over 20 years. I therefore find the starting point of this Telegraph article on health and Safety typical of the journalistic and (sometimes understandable) broad public view on the issue. It is representative of a willful blindness that has created the corporate culture we have today; a blindness that …

Beyond the Breedon Taskforce; CFO’s nearly “died” in 2009. They don’t want to go there again.

The credit plumber — Sat, 17 Mar 2012 14:13:13 +0000

The Breedon Taskforce into UK non-bank funding released their findings on Friday. Whilst it’s recommendations are fine as far as they go, there was little likely to alleviate immediate funding needs for many companies. My latest technical paper, published on Asymptotix website (with thanks) addresses the mechanics of how many companies ( mainly mid-sized+ ) …

Banks Seeking to Survive Should Stop Polishing Merde.

The credit plumber — Tue, 07 Feb 2012 21:00:25 +0000

“Regulators have to recognise that the rules of the game failed to keep up with the progressive fusion of banking, capital markets and insurance.” Bank of England Deputy-Governor Paul Tucker Forgive the title. However, given my nom de plume and the bank named below, it was hard to resist. It’s inspiration was a recent article …

2012: Easing Credit in the Real Economy or ‘why risk opacity has damaged confidence’

The credit plumber — Wed, 04 Jan 2012 12:36:35 +0000

“Our capital markets and much of the ‘plumbing’ of the financial system … rely on confidence in the integrity of the assets being traded, in the robustness of counterparties, in the reliability of infrastructure. Crises nearly always involve that confidence sliding away.” Paul Tucker, Deputy Governor for Financial Stability Bank of England April 2011 The …

Trust, Prefects and Clubhouse rules

The credit plumber — Tue, 19 Jul 2011 10:57:26 +0000

“Trust in Me” from Walt Disney’s The Jungle Book Trust in me, just in me Shut your eyes and trust in me You can sleep safe and sound Knowing I am around Slip into silent slumber Sail on a silver mist Slowly and surely your senses Will cease to resist Trust in me, just in …

In the land of risk myopia, the one-eyed King is blind.

The credit plumber — Mon, 11 Jul 2011 19:32:40 +0000

The comment “risks cannot be reduced only transferred” has received some recent prominence. This post develops my response to a post that used this phrase in answer to a question on LinkedIn’s Financial Services Regulation group; “How do you govern risk if you have no visibility into your risk? How do you identify risk? If …