PrefBlog

Oh, those wacky Europeans and their Risk-Weighted Assets!

Banks in Europe are undercutting regulators’ demands that they boost capital by declaring assets they hold less risky today than they were yesterday.

Banco Santander SA (SAN), Spain’s largest lender, and Banco Bilbao Vizcaya Argentaria SA (BBVA), the second-biggest, say they can go halfway to adding 13.6 billion euros ($18.8 billion) of capital by changing how they calculate risk-weightings, the probability of default lenders assign to loans, mortgages and derivatives. The practice, known as “risk-weighted asset optimization,” allows banks to boost capital ratios without cutting lending, selling assets or tapping shareholders.
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Spanish banks aren’t alone in using the practice. Unione di Banche Italiane SCPA (UBI), Italy’s fourth-biggest bank, said it will change its risk-weighting model instead of turning to investors for the 1.5 billion euros regulators say it needs. Commerzbank AG (CBK), Germany’s second-biggest lender, said it will do the same. Lloyds Banking Group Plc (LLOY), Britain’s biggest mortgage lender, and HSBC Holdings Plc (HSBA), Europe’s largest bank, both said they cut risk-weighted assets by changing the model.
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The proportion of risk-weighted assets to total assets at European banks is half that of American banks, according to an April 6 Barclays Capital report written by analysts Simon Samuels and Mike Harrison.
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Sheila Bair, who stepped down as chairman of the Federal Deposit Insurance Corp. in June, has called Europe’s adoption of risk-weighting “naive.”
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Some regulators, including Bair, have pushed for a leverage ratio that would require lenders to hold a fixed amount of capital against total assets.
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Banco Santander, based in Madrid, and BBVA in Bilbao said they’re justified in adjusting risk-weightings because Spanish regulators have held them to higher standards than elsewhere.

Spanish banks have an average ratio of risk-weighted assets to total assets of 52 percent compared with 32 percent for U.K. banks, 31 percent for French and Benelux banks and 35 percent for German banks, analysts at Keefe, Bruyette & Woods Inc., wrote in an Oct. 26 report.

DARPA’s looking for hackers:

At the conference, officials of the Defense Advanced Research Projects Agency pleaded with hackers to help them out and said that the agency plans to boost spending as it battles unnamed adversaries in cyberspace.

Regina Dugan, DARPA director, addressed an audience that comprised what the agency called “visionary hackers,” academics and others, according to a Reuters story.

Ms. Dugan contended that the military needs “more and better options” to meet cyber threats to a growing range of industrial and other systems controlled by computers vulnerable to penetration, including cars with advanced computer diagnostic boards. Of concern are brakes, accelerators, steering and other modern car systems that “we need to worry about” because they could be remotely hacked via such diagnostic controls, said another DARPA program manager.
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DARPA officials said the country is at risk particularly since the playing field is far from level. Layered security defenses have grown increasingly bloated, according to a recent in-house analysis, while attackers operate with lean, mean malware.

The agency’s analysis reports that some security packages are weighing in at an eye-popping 10 million lines of code, while malicious software on average runs on a whip-thin 125 lines.

To combat such threats, DARPA officials called for both an increase in the development of cyber defensive technologies and of offensive weapon systems.

There’ll be some good money for talented kids in that pot! I presume that Canadian federal government programmers need not apply:

The applications that are not “kicked out” of Service Canada’s automated system at the start cannot be fixed on the computer until a 28-day period has passed, even if the errors are reported to agents in the Service Canada processing office.

These applications then need to be processed manually by agents. The agents have an additional 21 days to do the recalculations, but, because their workforce is shrinking, the time frame is often not met and much longer delays of weeks or months are becoming commonplace.

What’s happening in Greece???

Greece’s critical power-sharing talks have hit a significant hurdle, with political leaders leaving a top-level meeting that had been expected to conclude three days of negotiations without naming a new prime minister to take over from George Papandreou.

The president’s office said Wednesday the meeting would reconvene on Thursday morning. It gave no reason. Earlier, Giorgos Karatzaferis, the head of a small right-wing party, had stormed out of the meeting, accusing the heads of the two main parties of using “trickery” but not giving any details.

I’ve already expressed doubts as to whether the population will permit the “paying back” part of the bail-out plan – but will the politicians even get as far as the “taking the money” part? Bloomberg reports:

Negotiations on a government between Papandreou and Samaras dragged on for a third day today as the two sides disagreed on a prime minister and the opposition balked at European Union demands for written commitments to secure a bailout package.

The new government must implement budget measures and decisions related to an Oct. 26 European bailout package that’s worth 130 billion euros ($177 billion), including a debt swap, before holding elections.

Immediately at stake is the fate of an 8 billion-euro loan installment under an earlier aid package, a 110 billion-euro EU- led bailout agreed in May 2010. The tranche must be paid before the middle of December to prevent a collapse of the country’s financial system.

Italy’s not having much fun either:

The euro-region’s defenses are being breached.

Investors today propelled Italy’s 10-year bond yield to close at a euro-era high of 7.25 percent after the promised exit of Prime Minister Silvio Berlusconi failed to convince them that his country can slash Europe’s second-largest debt burden.

This sounds like dealers are setting up for a lousy auction:

Italy may struggle to sell 5 billion euros ($6.8 billion) of Treasury bills tomorrow, after bond yields surged to euro-era records on Prime Minister Silvio Berlusconi’s resignation offer and LCH Clearnet SA demanded more collateral on the country’s bonds.

Italy auctions one-year bills tomorrow at 11:00 a.m. in Rome, followed by a sale of five-year bonds on Nov. 14. The auction comes after the country’s 10-year bond yield jumped 57 basis points to 7.33 percent, crossing the 7 percent threshold that led Greece, Portugal and Ireland to seek bailouts. Italy paid 3.57 percent the last time it sold one-year bills on Oct. 11. Similar maturity debt currently yields about 8.41 percent.

DBRS downgraded Italy a notch:

DBRS Ratings Limited (DBRS) has today downgraded the ratings on the Republic of Italy’s long-term foreign and local currency debt to A (high) from AA (low). The trend on both ratings remains Negative. The downgrade reflects: (1) persistent stress in market funding conditions; (2) fiscal consolidation implementation risks due to economic and political uncertainties; and, (3) structural economic growth challenges.

European difficulties are having effects in the Antipodes:

New Zealand’s central bank deferred plans to tighten bank lending rules as global turmoil increases the risks for the nation’s economy and financial system.

The Reserve Bank will delay an increase in the core funding ratio to 75 percent from 70 percent by about six months to Jan. 1, 2013, according to its Financial Stability Report released in Wellington today. The ratio sets the minimum share of bank loans that must be funded from local deposits or wholesale borrowings of one year or longer.

“Conditions in global funding markets have deteriorated,” the central bank said in the report. “It would have been very difficult to place new longer-term unsecured debt issues over the past three months as the sovereign debt crisis played out.”

The central bank introduced the ratio in July to reduce local banks’ reliance on short-term debt raised overseas, intending to counter the impact of that funding getting frozen.

Jefferson County’s gone bust:

Jefferson County, Alabama, commissioners voted 4-1 to file the largest U.S. municipal bankruptcy after reaching an impasse over concessions with holders of $3.14 billion of bonds.

JPMorgan Chase & Co. (JPM), which arranged most of the debt to fund a sewer renovation, will likely take the biggest loss.

A provisional agreement with creditors that commissioners approved in September included $1.1 billion in concessions and called for sewer-rate increases of as much as 8.2 percent for the first three years. The county was unable to get signed commitments from creditors, Commission PresidentDavid Carrington said today
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The vote by officials in Alabama’s most populous county occurred about a month after Pennsylvania’s capital of Harrisburg sought court protection citing millions in overdue bond payments tied to a trash-to-energy incinerator. A Jefferson filing would eclipse that of California’s Orange County in 1994.
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The crisis in Alabama arose when investors dumped Jefferson county’s bonds as the subprime mortgage-market meltdown sent ripples through Wall Street. Jefferson’s floating-rate securities were coupled with interest-rate swaps, a money-saving strategy pitched by banks that backfired. As credit markets convulsed in 2008, the county’s interest costs soared. When banks demanded early payoffs of the bonds, the county defaulted.

The debt deals also were rife with political corruption, leading the cost of the sewer project to soar as it was built during the 1990s. Former commission president and Birmingham Mayor Larry Langford, a Democrat, was convicted of accepting bribes in connection with the financing.

Two former JPMorgan bankers are fighting Securities and Exchange Commission charges that they made $8 million in undisclosed payments to friends of commissioners to secure the bank’s role in the deals. In 2009, JPMorgan agreed to a $722 million settlement with the SEC.

Be careful doing business in Ontario! Don’t sell securities that go down; only sell securities that go up, OK? Companies are now required to report on changes in the analytical methodology of third parties, and to guess how liquid the market for their securities is going to be.

There is renewed speculation that the TMX / Maple deal will close:

TMX, owner of the Toronto Stock Exchange, rose to C$44.70 this month, shrinking the gap to Maple Group Acquisition Corp.’s C$50-a-share offer to the narrowest since it became the sole bidder in June, according to data compiled by Bloomberg.
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“The deal will get done and the regulators will probably do a little tinkering around the edges,” Thomas Caldwell, Toronto-based chief executive officer of Caldwell Securities Ltd., which oversees about $1 billion including TMX shares, said in a telephone interview. “At the end of the day, Maple Group’s offering C$50 a share. Price is going to decide this.”
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The Competition Bureau is reviewing the C$3.73 billion ($3.64 billion) TMX transaction. Quebec’s Autorite des Marches Financiers scheduled hearings on Nov. 24 and Nov. 25 and the Ontario Securities Commission has hearings Dec. 1 and Dec. 2.

“Regulatory approval is more likely with the board and management supporting the transaction,” Edward Ditmire, an analyst at Macquarie in New York, said in a telephone interview. He says there’s a better than 50 percent chance the deal closes.

It will be a black day for Canada if the banks succeed in cementing a bit more of the Old-boy Club hegemony in the financial landscape. A foreign buyer for the TMX is greatly desirable.

Just in time for the Christmas shopping season comes this insurance news:

Should you be burdened with a particular fear of the supernatural, then you are well looked after when it comes to unusual insurance policies. Ghost, werewolf and vampire insurance can also be procured very easily, with each policy redeemable in the event of an attack by these creatures of the night.

Bell Aliant, proud guarantor of BAF.PR.A, was confirmed by DBRS:

DBRS has today confirmed the short- and long-term ratings of Bell Aliant Regional Communications, Limited Partnership (Bell Aliant or the Company) at R-1 (low) and BBB (high), respectively, along with the preferred share rating at Pfd-3 (high). The trends are Stable. The confirmation reflects a business risk profile that, while undergoing a transition from legacy voice services to focusing on growth areas such as data and video, has to-date been manageable. The ratings also incorporate Bell Aliant’s relatively stable financial risk profile, which remains slightly higher than its Canadian peers but within an acceptable range. DBRS believes that for Bell Aliant, the successful transition to providing new services – both in terms of investment and execution – remains more acute than for other telcos that typically have wireless services throughout their territory to provide growth while this fixed-line transition occurs.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts winning 11bp, FixedResets down 3bp and DeemedRetractibles gaining 6bp. Volatility was average. Volume was light.

Rumours are floating about specific bank capital surcharges:

Citigroup Inc. (C), JPMorgan Chase & Co., BNP Paribas SA, Royal Bank of Scotland Group Plc, and HSBC Holdings Plc (HSBA) may face top capital surcharges of 2.5 percentage points, according to a provisional list prepared by global regulators and obtained by Bloomberg News.

The list was drawn up as part of plans by the Group of 20 nations to force banks whose failure could damage the global economy to boost their reserves by 1 to 2.5 percentage points above minimum levels agreed on by international regulators. Bank of America Corp. (BAC), Barclays Plc (BARC) and Germany’s biggest bank Deutsche Bank AG (DBK) may face surcharges of 2 percentage points, according to the list.

At least one ECB council member is objecting to the piggy-bank paradigm:

European Central Bank council member Jens Weidmann said the ECB cannot bail out governments by printing money.

“One of the severest forms of monetary policy being roped in for fiscal purposes is monetary financing, in colloquial terms also known as the financing of public debt via the money printing press,” Weidmann, who heads Germany’s Bundesbank, said in a speech in Berlin today. The prohibition of monetary financing in the euro area “is one of the most important achievements in central banking” and “specifically for Germany, it is also a key lesson from the experience of hyperinflation after World War I,” he said.

The ECB is under pressure to ramp up its bond purchases to cap soaring yields in Italy as governments fail to contain the two-year-old sovereign debt crisis. Weidmann also rejected proposals to use Bundesbank currency and gold reserves to help finance purchases by a special fund, saying this is another form of monetary financing.

Pierre Trudeau was a visionary! First in Greece, now in Italy, the slogan is “Elect me and I’ll quit!

Prime Minister Silvio Berlusconi offered to resign as soon as Parliament approves austerity measures in a vote next week, after defections from his ruling party left him without a majority.

“Once that task has been achieved, the prime minister will tender his resignation to the President,” who will then begin consultations with all political parties, President Giorgio Napolitano said tonight in an e-mailed statement after meeting Berlusconi in Rome.

The resignation offer came after Berlusconi failed to muster an absolute majority on a routine parliamentary ballot, obtaining only 308 votes in the 630-seat Chamber of Deputies today.
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The yield on Italy’s benchmark 10-year bond jumped 11 basis points today to 6.77 percent, the most since the euro’s introduction in 1999 and near the 7 percent level that drove Greece, Ireland and Portugal to seek international bailouts. The extra premium investors demand to hold the debt instead of German bunds widened to a record 497 basis points.

The desperation of European politicians is leading them down some awfully stupid and dangerous pathways:

Bank regulators may get more powers to enforce a European Union plan to recapitalize lenders, including the ability to ban weaker banks from paying bonuses, under a proposal from the European Commission.

The commission, the EU’s executive arm, will propose the law “in the coming days,” Michel Barnier, the EU’s financial services chief said today.

Europe’s banks will need to raise 106 billion euros ($146 billion) in fresh capital under tougher rules being introduced in response to the euro area’s sovereign-debt crisis, the European Banking Authority said last month.
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Policy makers want banks to use funds from withholding bonuses and dividends to reach the capital target, rather than reducing the size of their balance sheets.

The EBA will “ensure that there isn’t deleveraging, and in particular also that there isn’t deleveraging in host countries in which trans-national groups operate as a result of the need to achieve certain capital levels,” Polish Finance Minister Jacek Rostowski said in a speech in Brussels.

Well, if they’re trying to increase capital flight, that’s a really good way to do it! It’s getting to the point where I’m not sure I understand why anybody would entrust any money at all to European bank – whether as equity or insured deposit.

What-Debt? and Spend-Every-Penny (the guys who turned a structural surplus into a structural deficit) are now bringing us Europe: the sequel:

The Harper government will take longer to erase the deficit, won’t raise Employment Insurance premiums as high and will extend a temporary work-sharing program in response to a worsening Canadian economy.

Finance Minister Jim Flaherty released his fall economic update Tuesday, providing the first clear examples of the “flexibility” his government has promised in the face of slower-than-expected economic growth.
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These assumptions for slower growth mean Ottawa is now projecting Canada will not produce a fiscal surplus until 2015-16 or 2016-17, depending on the success of a previously-announced plan to find $4-billion a year in spending cuts.

Prime Minister Stephen Harper had promised during the 2011 election campaign that Canada would be in surplus by 2014-15.
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The size of the federal debt is now projected to rise from $550.3-billion in 2010-11 to $640.6-billion by 2015-16.

I have no problem with deficit spending, as long as it is accompanied by a plan showing how it will paid for through the cycle. Unfortunately, the Junior Republicans can’t be bothered to think so far ahead.

It was a good day for the Canadian preferred share market, with PerpetualDiscounts gaining 17bp, FixedResets up 4bp and DeemedRetractibles winning 25bp. SLF issues were again notable on the downside of the Performance Highlights table. Volume was good.

Another small step in the decline of the West:

Hong Kong companies are issuing a record amount of bonds in Singapore dollars as Europe’s debt crisis boosts relative yields on securities denominated in the U.S. currency, enhancing the city-state’s appeal as a rival financial center.

Singapore-dollar bond sales by borrowers from Hong Kong have risen to $2 billion this year, from $671 million in all of 2010, according to data compiled by Bloomberg. Developers including Henderson Land Development Co. accounted for at least 96 percent of the total. At the same time, Hong Kong companies’ offerings of U.S. dollar notes have shrunk to $1.8 billion from $7 billion in 2010.

Hong Kong borrowers are turning to Singapore as Europe’s deepening debt crisis has driven relative yields on Asian U.S. dollar debt higher. Singapore’s currency market, Asia’s biggest by trading volume, is an additional attraction, enabling efficient conversion to other regional denominations.

To the astonishment of regulators everywhere some banks are bailing out of southern Europe:

BNP Paribas, France’s biggest bank, booked a loss of 812 million euros ($1 billion) in the past four months from reducing its holdings of European sovereign debt, while Commerzbank took losses as it cut its Greek, Irish, Italian, Portuguese and Spanish bonds by 22 percent to 13 billion euros this year.

Banks are selling debt of southern European nations as investors punish companies with large holdings and regulators demand higher reserves to shoulder possible losses. The European Banking Authority is requiring lenders to boost capital by 106 billion euros after marking their government debt to market values. The trend may undermine European leaders’ efforts to lower borrowing costs for countries such as Greece and Italy while generating larger writedowns and capital shortfalls.

Greece might have a new government soon:

Papandreou and Antonis Samaras, leader of New Democracy, “made progress in talks” yesterday “to name a head of a national unity government,” Elias Mosialos, a Greek government spokesman, said in an e-mailed statement. The two men spoke by phone a number of times yesterday, said a Greek government official who declined to be named. Talks will resume in Athens today, the official said.
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The unity government’s mission will be implementing the European summit decision from Oct. 26 on a second Greek financing package of 130 billion euros ($179 billion) before leading the country to elections, according to an e-mailed statement from the premier’s office. Papandreou, who has agreed to step aside for a new prime minister, spoke yesterday with German Chancellor Angela Merkel; Jean-Claude Juncker, who heads the group of euro area finance ministers; and European Commission President Jose Barroso.

Not much point talking to Juncker, because he’s a liar. Anyway, it’s lovely that the unity government will be implementing the borrowing part of the plan, but it’s unclear to me whether they will be able to deliver on the paying-back part of the plan. Capital flight is becoming a big problem:

Unsparing in its criticism of Greece, Bild launches another broadside against its favourite target: “Greeks stash 200 billion euros in Swiss bank accounts!” headlines the Berlin tabloid, whose influence on the Chancellorship is an open secret. “While Europe struggles to help Greece with multi-billion euro bailout plans, more and more Greeks are transferring their money out of the country” to avoid the consequences of a crash in the national economy, announces Bild. “Stop the capital flight!” insists the tabloid’s editorial, which lambasts the Greek elite for refusing to introduce a tax on money transfers or penalties for tax evasion.

The Globe & Mail reports:

That disenchantment has also been reflected in the flight of capital from the country in recent weeks. The New York Times, citing banking sources in Athens, estimated that €10-billion to €20-billion were whisked away to safer countries in September and October, escalating a trend that saw €46-billion in deposits leave Greek banks since January 2010.

The wealthy have reportedly been paying cash for homes in London, while those with more modest incomes are stuffing euro notes into safe-deposit boxes.

I’m sure that human flight is a problem, too, although I confess I have no evidence to support this. But come on! If you were Greek, aged under, say, 35, and were trained in an actual skill (doctors and nurses, for instance, have highly transportable skills) wouldn’t you be thinking that maybe France, Germany, or the UK would be better places to make a living?

And let’s not even mention Italy, it’s too depressing. Oh, all right, we’ll talk about Italy:

Italy’s cost of borrowing money soared to its highest point since the euro zone was formed, signalling a growing conviction the sovereign debt crisis is about to get worse as the currency union’s third-largest economy creeps closer to a financial cliff.

The yield on 10-year Italian bonds hit 6.68 per cent – a 14-year high – on Monday before narrowing to 6.45 per cent, amid reports that embattled Prime Minister Silvio Berlusconi was about to resign. Greece, Ireland and Portugal each were forced to seek bailouts soon after their bond yields climbed past 7 per cent.

As long as we’re talking about Europe, DBRS has some interesting things to say about Belgian mortgages:

Firstly, according to data from obtained by DBRS, Belgium has owner-occupation levels that are higher than neighbouring European countries at 71%, compared to 55% for France and 53% for the Netherlands. This is partly as a result of the house price growth over the last decade outstripping the commensurate growth in rental return. It is also infl uenced by the fact that Belgium has very high property purchase transaction costs (both buying and selling property) relative to other European jurisdictions. DBRS understands that purchase costs are routinely in the range of 10-20% of the property cost. Both these factors combined have meant that investment in property for speculative purposes is relatively unattractive as the rental yield is, comparative to other European jurisdictions, low, and day one cash outlay is high.
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In Belgium fi xed rate mortgages represent the majority of the market and the majority of the loans have a fixed rate of interest for 10 years or more or for the entire term of the loan. Variable rate loans also feature and differ from the completely variable rate loans found in other jurisdictions in that their variability is restricted by caps and fl oors in the interest rate. Rate caps offer borrowers some protection from spikes in interest rates by limiting the potential mortgage payments due by borrowers regardless of prevailing interest rates.

As part of the continuing campaign to make it impossible for Bad People to do business by making it impossible for anybody to do business, the federal government has issued a Consultation Paper on Proposed Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations on Ascertaining Identity. Naturally, no attempt is made to justify the proposed revisions to protocol in terms of actual results; it is sufficient to pick objectives out of the air, say ‘This makes sense!’ and then enforce it.

BIS has issued a working paper by Michael Brei, Leonardo Gambacorta and Goetz von Peter titled Rescue packages and bank lending:

This paper examines whether the rescue measures adopted during the global financial crisis helped to sustain the supply of bank lending. The analysis proposes a setup that allows testing for structural shifts in the bank lending equation, and employs a novel dataset covering large international banks headquartered in 14 major advanced economies for the period 1995–2010. While stronger capitalisation sustains loan growth in normal times, banks during a crisis can turn additional capital into greater lending only once their capitalisation exceeds a critical threshold. This suggests that recapitalisations may not translate into greater credit supply until bank balance sheets are sufficiently strengthened.

A scandal regarding Olympus has been simmering for a while and has now come to a boil – Olympus was naughty:

Olympus Corp. (7733) said it hid losses by paying inflated fees to advisers on the 2008 acquisition of Gyrus Group Plc, the first admission of wrongdoing from the Japanese camera and medical-equipment maker since accusations from its former chief executive officer surfaced four weeks ago.

The stock plunged by the daily limit after the company said it also used three other acquisitions to help hide the losses on investments from the 1990s. Allegations by Michael C. Woodford after he was axed as CEO on Oct. 14 had wiped more than half the value from the company’s stock before today.

Prohibition is drying up in the States:

U.S. states that have kept a tight rein on alcohol sales since the Prohibition era may be loosening their grip.

Lawmakers in Utah, where even high-alcohol beer is sold through state liquor stores, were urged by an advisory panel this year to put the business in private hands. Pennsylvania, Virginia and North Carolina have considered privatizing state liquor outlets. Tomorrow in Washington, votes will be counted on a ballot measure backed by Costco Wholesale Corp. (COST) that would end state control of liquor retailing.

Budget deficits forecast to reach $103 billion this fiscal year are making states more willing to open the taps, to the dismay of some public-health advocates who warn it may exacerbate social ills. Companies including Costco, bourbon maker Beam Inc. and Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), which owns food and alcohol distributor McLane Co., may gain a larger share of the $8.5 billion in gross sales last year in the 18 states where liquor is still controlled.

One wonders if Ontario will ever follow!

There was a defense of milkfare in Saturday’s Globe:

[Federal Agriculture Minister Gerry Ritz] noted the Americans approved $450-million (U.S.) last year to backstop their dairy industry.

How much did Ottawa spend on backstopping Canadian dairy farmers?

“Zip,” Mr. Ritz said.

Oh, and how much did consumers pay directly to subsidize the bucolic lifestyle of the favoured few?

Every year the distortions caused by the system grow larger. Canadians may not realize it when they go to the grocery store, but they’re paying twice the world average for dairy products – and up to three times what Americans pay. That’s a hidden $3-billion a year tax on all of us.

Roughly half the money flows back to dairy farmers, making them richer than other farmers, who work just as hard. Bloated government agencies and marketing boards soak up a significant chunk of the rest.

I’d rather make my donation directly, assuming that I have to make one at all. But maybe that’s just me.

It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts gaining 5bp, FixedResets down 9bp and DeemedRetractibles losing 21bp. Good volatility, all losers, with Sun Life notable again for its losses. Volume was light.