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Title: What's in your wallet?
Source:
[None]
URL Source: https://www.zerohedge.com/markets/cftc-quietly-bails-out-capital-one
Published: Mar 29, 2020
Author: ZH
Post Date: 2020-03-29 21:55:37 by Anthem
Keywords: None
Views: 1101
Comments: 5
There ain't nuthin! Nuthin left in my wallet! WTF! (1 image)
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#1. To: Anthem (#0)
Any idea what sunk Cap One? I did not read the article.
#2. To: Lod (#1)
At the core of the issue were plunging oil prices, which ended up having a margin call effect on the bank's swaps exposure; and since Capital One’s waiver lasts until Sept. 30, if energy prices remain low or the bank’s exposure remains above the threshold, it will register as a swap participant or make business adjustments, the CFTC said on Friday. And here is why anyone who currently has a deposit account at CapitalOne may consider quietly moving the money elsewhere: according to Reuters, the CFTC designation entails a number of complex and costly reporting and compliance obligations, which the CFTC spokesman said could hurt the institution’s ability to keep lending. In short, CapitalOne made a terrible trade, betting via derivatives that oil would not plunge to where it is now - at 17 year lows - and only CFTC intervention prevented a margin call of unknown magnitude from being sent to Capital One's corner office. Which is surprising considering that the bank is a relatively small player in the energy lending and financing business, with energy loans accounting for just 1.4% of its total loan book, according to its filings.
Greed.
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Replies to Comment # 1.
#3. To: Lod (#1)
Any idea what sunk Cap One?
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