Counterparty Risk Proposals May Affect Hedge Fund Practices

RISK MANAGEMENT

NEW YORK--The Counterparty Risk Management Policy Group (CRMPG) last month released a plan designed to establish a new risk management benchmark. Instituted in the wake of the Long-Term Capital Management (LTCM) debacle, the proposal would require firms to implement substantial infrastructures for asset/liability management and analysis.

The immediate impact on buy-side firms is unclear, but if the proposal is adopted industrywide, it may lead commercial and investment banks that have typically

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Systematic tools gain favor in fixed income

Automation is enabling systematic strategies in fixed income that were previously reserved for equities trading. The tech gap between the two may be closing, but differences remain.

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