Media

Financial News - Clearing houses move their FX pieces into position

Six global clearing houses are competing for the FX derivatives market, and many believe that that one will ultimately end up victorious. If the market is not big enough to accommodate even two clearing houses, understanding the offerings of all the major competitors is key. Record CEO James Wood-Collins states that, as a specialist FX manager, our focus will be on achieving cost-efficient, robust clearing with a transparent pricing structure.

Article available at: http://www.efinancialnews.com/story/2012-05-14/clearing-houses-move-their-fx-pieces-into-position

FX Week - Neil Record's Wolfson Prize entry in brief

Neil Record's is one of five submissions short-listed for the Wolfson Economics Prize, a £250,000 award set up to ensure high-quality economic thought was given to how the eurozone might be restructured in the event that one or more states should be forced to leave. Neil's submission argues that the clock is ticking on the eurozone and that, to avoid the catastrophic consequences of disorderly default and collapse of the union, the break-up should be a one-time, once-and-for-all affair. He argues that it would ideally be planned by a secret, deniable group consisting of eurozone financial experts, led by Germany.

Article available at (subscription required): http://www.fxweek.com/fx-week/interview/2171029/spotlight-neil-record-record-currency-management

FX Week - Spotlight on ... Neil Record, Record Currency Management

In this interview with Robert Mackenzie Smith, Neil Record discusses the growth of Record over the past three decades, the challenges posed by the financial crisis and his short-listed submission for the Wolfson Economics Prize.

Article available at (subscription required): http://www.fxweek.com/fx-week/interview/2171029/spotlight-neil-record-record-currency-management

Financial News - Counting cost of currency trades

Many fund managers are beginning to use cost-analysis tools to look more closely at whether they got a 'good deal' on their foreign exchange trades. These tools facilitate a better understanding of just how much these trades are costing, and who is giving the best deals. Whilst transactions cost analysis is common and well-understood in the equities market, James Wood-Collins warns that this type of analysis is much tougher in currency markets. This is due to the fact that many transactions are over-the-counter and reflect the specifics of particular markets, meaning that there is much more scope for getting the cost analysis wrong.

Article available at: http://www.efinancialnews.com/story/2012-04-30/counting-cost-of-currency-trades

Pensions and Investments - Currency risk emerges as a major driver of returns

Currency risk could become a major source of return in the future, despite the fact that country-specific factors, such as the threat of inflation, could dampen opportunities in emerging markets. Over the past decade, currency movements have contributed about half of the returns on the J.P. Morgan Global Bond Index Emerging Markets Composite and 14% to total returns on the MSCI Emerging Markets Free index in dollar terms. Whilst emerging markets make up approximately one third of world GDP and 14% of the MSCI All Country World Index, many U.S. and European investors invest only 5% of portfolios in emerging markets. We believe that this makes a strong case for investing in emerging market currencies.

Article available at: http://www.pionline.com/article/20120416/PRINTSUB/304169993/currency-risk-emerges-as-a-major-driver-of-returns

Investment Europe - Distressed managers make the best of a bad situation

Distressed funds have devoted around £200bn to European 'special situations' strategies, according to lawfirm Sheaman and Sterling, and US clients are giving increasing attention to the distressed investment opportunities in the Europe. In a discussion covering several asset classes, Record CEO James Wood-Collins outlines Record's strategy for making money from stress in the eurozone. Given the plausibility of a number of eurozone scenarios and considerable uncertainty around which will result, the fund seeks to take advantage of cycles of risk and volatility in the current stressed environment. This is achieved by buying option protection when it is cheap and adopting rigorous downside controls.

Article available at: http://www.investmenteurope.net/investment-europe/feature/2165760/distressed-managers-bad-situation

Holyrood Magazine - A solution to the eurozone crisis

Neil Record, founder and Chairman of Record Currency Management, is one of five finalists for the Wolfson Economics Prize, an award second in size only to Nobel prizes. The search for the most elegant and rigorous solution to the break-up of the eurozone was set up by Lord Wolfson in late 2011, as the sovereign debt crisis lurched from one catastrophe to the next. Neil's blueprint for the resolution of the crisis involves a secret, deniable task force who would work out the fine details of the break-up (many of which Neil himself covers) and put their plan for full dissolution into immediate effect as soon as a single member's exit became inevitable.

Article found at: http://www.holyrood.com/articles/2012/04/09/a-solution-to-the-eurozone-crisis/

The Economist - Charlamagne: Currency disunion

The treaties establishing the euro zone declare that the euro is 'irrevocable', but treaties can be changed, and there is much wisdom in seriously considering how a break-up might be managed. If nothing else, such an exercise would provide some rigorous underpinning to the fears of unprecedented chaos currenctly envisaged should the currency union continue to experience strains. Neil Record argues that only one exit from the euro zone should occur, namely the complete dissolution of the currency union as soon as one country's exit becomes inevitable. Moreover, the break-up should be planned in secret and executed with immediate and full effect.

Article found at: http://www.economist.com/node/21552250

Today - An essay contest to solve the euro crisis?

In his short-listed submission for the Wolfson Economics Prize, Neil Record argues that as soon as one currency leaves the euro zone, the break-up of the entire project becomes inevitable. The essay in which Neil outlines his views and his strategy for breaking up the currency union is one of five short-listed finalists for the £250,000 prize.

Article found at: http://www.todayonline.com/World/EDC120405-0000057/An-essay-contest-to-solve-the-euro-crisis

Australian Financial Review - Euro zone fix is in

Neil Record's suggested resolution to the euro zone crisis is one of five short-listed finalists from 425 entries received. Neil's submission for the £250,000 prize recommends a full dissolution planned by a secret and completely deniable task force, led by Germany, which would take immediate effect as soon as one country's exit from the union became inevitable.

Article found at (subscription required): http://afr.com/p/world/euro_zone_fix_is_in_wE1f6AdyP1S3ZYiNwQMDvL

National Post - Contingency plans should eurozone fall

A completely unplanned exit would be catastrophic, and piecemeal departures from the euro zone would be a recipe for continuous serious crisis. The only viable alternative, Neil Record argues in his submission for the £250,000 Wolfson Economics Prize, is a once-and-for-all complete dissolution as soon as one country's exit becomes inevitable. A secret, deniable taskforce led by Germany, and with a 'cameo role' for France to aid legitimacy, would be responsible for planning the break-up, which would be abandoned in the event of any leak whatsoever. Neil believes that the exit

Article found at: http://www.nationalpost.com/related/topics/Contingency+plans+should+eurozone+fall/6413623/story.html

The Jakarta Post - A contest for the best 'Dear euro' letter

In one of five short-listed essays for the Wolfson Economics Prize, all of which discuss in detail the complex legal, political and economic ramifications of a break-up, Neil Record outlines his strategy for managing the break-up and avoiding the catastrophic consequences of an unplanned exit. Neil's unique contribution lays out a plan for a secret, deniable task force which would plan a single exit from the currency union - namely, the complete and immediate dissolution of the euro zone itself, as soon as one country's exit became inevitable.

Article can be accessed via: http://www.pressdisplay.com/pressdisplay/viewer.aspx

International Herald Tribune - Break up euro zone, win a prize

Landon Thomas Jr. introduces the five short-listed entries for the 'Wolfson Prize', which will be awarded 5 July, to the most elegant blueprint for how a country, or countries, might leave the euro zone - or else how the 17-nation project might unwind. Record's founder and Chairman Neil Record argues that once a country leaves the euro, the whole project becomes untenable.

Article found at: http://dealbook.nytimes.com/2012/04/03/five-visions-of-how-to-solve-the-euro-zone-crisis/?scp=1&sq=wolfson%20prize&st=cse

Wall Street Journal - Euro-Zone Breakup Isn't the Answer

Richard Barley writes, in the 'Heard on the Street' section, that the five Wolfson proposals for eurozone break-up only strengthen the case for further fiscal and political integration.

Article found at (subscription required): http://online.wsj.com/article/SB10001424052702304750404577321593460079870.html?mod=WSJ_Heard_LEFTTopNews

Wall Street Journal - Neil Record's Euro Contingency Plan Calls For Secret Task Force

Neil Record, founder and chairman of Record Currency Management, argues in his short-listed submission for the Wolfson Economics Prize that the contingency plan for dismantling the euro would have to be crafted by a secret, completely deniable, German-led task force. An integral part of his argument is that there should only be one exit from the currency union - namely the full and complete abandonment of the project. The plan would be revealed to heads of European member states and put into action in the event that any exit became inevitable.

Article found at: http://online.wsj.com/article/BT-CO-20120403-708088.html

Reuters - Five shortlisted for EMU split-up plan prize

On the announcement of the short-list five entries for the Wolfson Economics Prize, the article summarizes each in turn. Neil Record's entry includes a detailed week-by-week timetable and stresses to the need for complete secrecy and deniability during the planning phase leading up to total dissolution of the union, which is the only possibility once a single exit becomes inevitable.

Article found at: http://uk.news.yahoo.com/five-shortlisted-emu-split-plan-141402219.html

The Guardian - Five ways to break up the eurozone

In the hunt to find the least disruptive way to break up the 17-nation currency union - prompted by the two-and-a-half year sovereign debt crisis - five suggested solutions have emerged. These short-listed submissions for the Wolfson Economics Prize include that of Neil Record, who argues that the departure of even one country would render necessary the break-up of the whole union, because the argument that the single currency was permanent would no longer hold true. His essay goes into the detailed operational considerations which would emerge during such a transition.

Article found at: http://www.guardian.co.uk/business/2012/apr/03/wolfson-prize-shortlist-eurozone-breakup

The Times - Five ways to leave the euro - and bank a tidy bonus

The five short-listed entries for the Wolfson Economics Prize indicate that the break-up of the currency union need not entail economic Armageddon, as is often forecast. In Neil Record's view, whilst the consequences of a break-up could indeed be dire if managed incorrectly, a credible plan for transition, to be put into action as soon as the exit of one member became inevitable, would bring an end to recent turmoil and help avoid total disaster.

Article can be accessed via: http://www.thetimes.co.uk/tto/news/ (subscription required)

The Daily Telegraph - Gurus see euro break-up as dangerous but liberating

The emerging consensus from the five short-listed entries for the Wolfson Economics Prize is that, if managed properly, eurozone exit need not be catastrophic. Neil Record's view is that, whilst an unplanned exit would indeed end in catastrophe, a transition planned in secret by a German-led task force and put into operation as soon as a single member's exit became inevitable would offer the best chance of minimizing the chaos. There would, in this event, be only one exit from the currency union - the complete and carefully-managed dissolution of the union itself.

Article found at: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9184373/Wolfson-gurus-see-euro-break-up-as-dangerous-but-liberating.html

City AM - How to end the euro : One Wolfson prize finalist reveals his proposal

In this article Neil Record personally outlines the plan he put forth in great detail in his short-listed submission for the Wolfson Economics Prize. The plan involves a secret and completely deniable task force, which would formulate a plan for the break-up of the currency union (the steps of which Record outlines), to be put into operation as soon as a single member's exit became inevitable. The plan itself would be sprung on markets on a Friday after close of business and dissolve the currency union immediately and Record outlines the corollary steps for central banking structures, redenomination, finance and export sectors, and the sequencing of the plan itself.

Article found at: http://www.cityam.com/forum/how-end-the-euro-one-wolfson-prize-finalist-reveals-his-proposal

City AM - Wolfson prize: Top euro exit plans chosen

The 425 submissions for the Wolfson Economics Prize identified a number of problems with the eurozone - lack of competitiveness; political opposition to fiscal transfers; and lack of a mechanism for determining contract arrangements if a country were to leave. Neil Record's submission, acknowledging these problems, presents a solution and a detailed timetable not simply for the exit of one eurozone member, but for the only viable outcome if a single member's exit were to become inevitable - the break-up of the entire union in one go.

Article found here: http://www.cityam.com/latest-news/wolfson-prize-top-euro-exit-plans-chosen

Wall Street Journal - Five Ways to Break Up the Euro

Charles Forelle writes in his blog that, although saying that a country should leave the euro zone is very easy, the union was created to be irrevocable, making a rupture both messy and mind-bogglingly technically complex. The five best efforts at formulating such a strategy are on the short-list for the Wolfson Economics Prize. Neil Record's short-listed submission maintains that the only solution - once one country's exit becomes inevitable - is to 'blow the whole thing up', in Forelle's words.

Article found here: http://blogs.wsj.com/marketbeat/2012/04/03/five-ways-to-break-up-the-euro/

The Daily Mail (City Focus) - Shortlist in Wolfson Economics Prize for solution to safe break up of the euro revealed

Whilst the winner of the Wolfson Economics Prize, which received 425 entries, will not be announced until 5 July, analysis and speculation around the five short-listed entries is already rife. Neil Record's entry stresses the central importance of secrecy and deniability of the German-led task force which in his view should plan a transition from the currency union, and the immediate and once-and-for-all nature of such a move. Essentially, as soon as one member state's exit became inevitable, the secret plan for the complete dissolution of the union would have to be put into action and made effective immediately.

Article found here: http://www.dailymail.co.uk/money/news/article-2124611/CITY-FOCUS-Shortlist-Wolfson-Economics-Prize-solution-safe-break-euro-revealed.html

The Financial Times - Passive approach gains currency

As the interest in capturing passive currency returns through ETFs increases, Record CEO James Wood-Collins argues that currency is relevant in two ways: as a source of risk to be managed and as a potential source of return. He also points out that currency has only been viewed as a source of uncorrelated return since 2004-2005, and that it is only just 'maturing' as an asset class in its own right.

Article found at (requires subscription): http://www.ft.com/cms/s/0/398e00cc-7739-11e1-93cb-00144feab49a.html#axzz1qxn4EaSl

The Financial Times - Flexibility is key to picking right style

In a contribution to the discussion of sources of return in currency, James Wood-Collins outlines the four sources of return which Record believes are persistent (Carry, Momentum, Value and EM), and notes that the carry trade is particularly sensitive to periods of negative risk appetite. He also advocates investing in these strategies with equal weights as a fruitful starting point for thinking about allocation.

Article found at (requires subscription): http://www.ft.com/cms/s/0/354e938e-7737-11e1-93cb-00144feab49a.html#axzz1qxn4EaSl

The Financial Times - Eurozone hedging is tough game to play

In a debate over whether the Greek debt-swap and bail-out, and the ECB's two LTRO operations, have resolved the debt crisis or merely delayed the inevitable, Record CEO James Wood-Collins argues that not enough has been done to improve Greece's competitiveness and the eurozone's deeper structural failings. In line with the tone of the article, James views the recent 'solutions' push problems into the future and that bankers will not likely put the time granted them to good use.

 Article found at (subscription required): http://www.ft.com/cms/s/0/2f378fa0-7737-11e1-93cb-00144feab49a.html#axzz1qxn4EaSl

The Financial Times (FTfm FX Supplement) - Funds shine light on custodians' fees

Whilst custodian spreads charged on FX transactions are often overlooked in times of plenty, these costs (and the associated profits) are coming under closer scrutiny in today's leaner market environment. According to James Wood-Collins, Record CEO, transactions data received from custodians for audits frequently is not time-stamped, which fits with a picture emerging from lawsuits filed against custodians in recent years. Excessive spreads in aggregate are considerably more common when pension funds' FX execution is left to custodians, rather than being subject to the fiduciary duty of the underlying manager.

Article available at (subscription required): http://www.ft.com/cms/s/0/25a53096-7737-11e1-93cb-00144feab49a.html#axzz1qxn4EaSl

FX Week - Ready to comply?

A detailed discussion of the currency implications of the EU's Solvency II Directive, in which James Wood-Collins goes over the conditions a hedging program must satisfy under the legislation. Although the definition and interpretation of 'dynamic hedging' remains slightly ambiguous, both the Record CEO and Arnaud Gerard of Pareto Partners both anticipate an appetite for systematic hedging programs with variable hedge ratios. Wood-Collins notes the benefits not only of a dynamic program, but of utilising a dedicated and experienced overlay manager.

Article available at (starting on Page 20): http://www.fxweek.com/digital_assets/5171/FXI_Q1_2012_Web_(3).pdf

FX Week - Shake-up in UK council pension schemes' currency mandates

Record Currency Management announced as one of four managers short-listed in Norfolk County Council's search for a dynamic currency hedging manager, after the local council pension scheme decided to move from its 60% passive hedge arrangement executed by it custodian, Northern Trust.

Article available at (starting on Page 10): http://www.fxweek.com/digital_assets/5171/FXI_Q1_2012_Web_(3).pdf

European Pensions - Emerging markets: The best approach

Record Head of Economic Research and FX Strategy, Javier Corominas, participates in a roundtable debate on approaches to emerging market investing. Whilst other participants discuss the issues around investing in equities and debt, and discuss the challenges faced in each asset class, Javier argues that emerging market currencies should be treated as a separate asset class in their own right. He points out both that currencies make up over half of equity and debt benchmark index returns and that strong empirical evidence exists in support of the emerging market convergence, justifying a view of emerging market currencies as a beta.

Click here for the full article, made available with the permission of European Pensions Magazine.

Euromoney - Action stations for electronic migration

EuromoneyFXNews' inaugural e-trading survey reveals that buy-side client expect the move from voice trading to electronic trading to build momentum, with single-dealer platforms gaining favour as application programming interfaces stall. Record CEO James Wood-Collins discusses the benefits to best execution of the added quantitative feedback obtained from multi-dealer platforms, compared to trading on voice alone.

Article available at (subscription required):  http://www.euromoney.com/Article/3007022/Category/16/ChannelPage/0/EuromoneyFXNews-e-trading-survey-Action-stations-for-electronic-migration.html

Investment Europe: Record helps FX investors with EM exposure

"The hunger for access to emerging markets is so palpable that some investors are requesting exposure to the currencies, even if the main focus of their underlying investments is quite elsewhere, says Record Currency Management".

Article found at: http://www.investmenteurope.net/investment-europe/news/2153718/record-currency-management-helps-investors-em-exposure

The Financial Times - Investors seek hedging against Euro split

Article discloses that "leading investment banks are considering creating currency products that would protect companies and investors in the event of a partial break-up of the Euro". Quotes Record CEO James Wood-Collins on the concept of "Legal Tender Contracts".

Article found at (requires subscription): http://www.ft.com/cms/s/0/548e31c0-5985-11e1-abf1-00144feabdc0.html

Euromoney FX News - Counterparty risks looms large for FX buy-side

The ongoing ebb and flow of the European sovereign debt crisis and its impact on the underlying stability of bank balance sheets has focussed the minds of buy-side clients when it comes to choosing their FX counterparties.

Article at (requires subscription): http://www.euromoneyfxnews.com/Article/2968653/Buy-side/Counterparty-risk-looms-large-for-FX-buy-side.html

Euromoney FX News - FX electronic migration continues apace

The migration from voice trading to electronic execution in the foreign exchange markets continues to build momentum. And the results of EuromoneyFXNews e-trading survey show that buy-side clients expect to increase the level of electronic execution even more in the future.

Article at (requires subscription): http://www.euromoneyfxnews.com/Article/2968652/News/FX-electronic-migration-continues-apace-single-dealer-platforms-to-benefit-API-stalls.html

Euromoney FX News - Mobile FX trading still stuck on the launch pad

The financial markets, like any industry, have been caught up in the buzz of the new generation of technology that pervades the world of e-commerce: the ubiquitous app. But will mobile trading ever take-off in institutional foreign exchange?

Article at (requires subscription): http://www.euromoneyfxnews.com/Article/2968654/News/Mobile-FX-trading-still-stuck-on-the-launch-pad.html

Financial News - Euro weakness boost funding attraction

Record CEO James Wood-Collins is interviewed on carry trade strategies - borrowing cash in a country with low interest rates to invest in higher-rate countries where cash attracts a better yield - in the context of Eurozone volatility.

Article found at (requires subscription): http://www.efinancialnews.com/story/2012-01-16/euro-weakness-boosts-attraction?mod=sectionheadlines-home-AM