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To: LTK007 who wrote (358355)	2/19/2008 12:23:45 PM
From: ldo79	Read Replies (1) \| Respond to of 436258

ISDA issues warnings about risk proposals Lianna Brinded 19 Feb 2008 The International Swaps and Derivatives Association and three other hard-hitting financial trade groups have voiced concerns that fresh international guidelines on banking risk management may promote short-term regulatory objectives at the expense of sound control mechanisms. The Institute of International Finance, the London Investment Banking Association and the International Banking Federation have joined forces with ISDA to highlight their “core concerns” with the Basel Committee on Banking Supervision, which has published proposals designed to improve the transparency between banks’ trading books and their underlying risks. The lobby group of four have taken issue with some elements of the Basel Committee's proposal to improve banking risk management. The four said in a letter to the committee they fear the guidelines may "prioritize short-term regulatory objectives over and above promoting sound risk management practices." The group also fears that too rigid a set of rules would damage banking innovations. The letter said: "It is important to bear in mind that there is presently no industry consensus on the correct way of modeling default risk in the trading book, even in principle." However, the group said it "recognized and supported the goals and objectives" of the banking committee to ensure banks improve their capital positions to address the risk of default. These are enshrined in a banking committee working paper entitled, "The Application of Basel II to Trading Activities and the Treatment of Double Default Effects." The members of the Basel accord's working group include 10 European countries as well as Japan. ISDA members called in October for a significant increase in the amount of capital banks provide on their balance sheets to protect them against market risk, after conducting a study with seven investment banks over their trading book activities in October last year. Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley, RBS and UBS agreed to run tests on their trading books for the study. The banking tests used guidelines from a study in January that year by ISDA that urged regulators to adopt longer term horizons for modeling risk and made a distinction between the risk of default incurred by banks and their risk from the market. A key conclusion of the study was that market risk is more perilous than default risk. tinyurl.com

To: LTK007 who wrote (358355)	2/19/2008 5:28:50 PM
From: NucTrader	Read Replies (1) \| Respond to of 436258

They're not trivialities, really, BUT...the supercomputers were all programmed by...humans...geniuses, no doubt...and our species does tend to fuck up from time to time, it's inevitable, and when the FU arrives it will be "not ordinary" but "Extraordinary", IMUO...

To: LTK007 who wrote (358355)	2/19/2008 6:25:14 PM
From: Giordano Bruno	Read Replies (1) \| Respond to of 436258

Myth could use some cheering up. Would you mind sending it to him in pm form? It would mean a lot coming from you max90. Secret computers are right up his alley.

To: LTK007 who wrote (358355)	2/20/2008 12:44:39 AM
From: Real Man	Read Replies (1) \| Respond to of 436258

Note:i learned 2years ago that the NSA has a SUPER COMPUTER that is linked with Fed and with several big brokerages. The complexity of the algorithms i can't even imagine. So, Max, did you also learn who is buying the futures and how? What is the purpose of this supercomputer? What is the purpose of the Fed in all this? Are those Black-Scholes type hedging/correlations/real time volatility smile computations, and the Fed serves as infinite liquidity provider and protector possible LTCM type meltdown? Note: Black Scholes always makes tons of money, except in rare crash type cases. Quants were always working on creating the perfect hedge, volatility smile, real time fast correlation/volatility calculations, etc. Is the role of the Fed to eliminate the "tails" (also known as market crashes)?