Biography
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Izabella Kaminska joined FT Alphaville in October 2008, which was, perhaps, the best time in the world to become a financial blogger. (Added bonus: there was a free breakfast trolly.) Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP’s internal magazine. She has also worked as a reporter on English language business papers in Poland and Azerbaijan and was a Reuters graduate trainee in 2004.

Everything she knows about economics stems from a childhood fascination with ancient economies, specifically the agrarian land reforms of the early Roman republic and the coinage and price stability reforms of late Roman emperors. Her favourite emperor is one Gaius Aurelius Valerius Diocletian.

She studied Ancient History at UCL, and has a masters in Journalism from what was then the London College of Printing.

And yes, she is also a second-generation West London Pole (who likes mushroom picking, bigos and pierogi).

In Japan, my kingdom for a dollar hedge

Could the collapse of covered interest rate parity be the harbinger of even stranger things to come ? At the heart of the issue is how on earth the interest rate differential between two currencies in the cash money markets is no longer equal to the differential between the forward and spot exchange rates. Read more

Yahoo email capture

As a yahoo email user, we can testify to the fact that being continuously told by friends and family that: “hey there, I think you’re email may have been hacked” was good enough of an incentive to defect to an alternative provider. Read more

The Deutsche domino

Is there something particularly hubristic about a German bank being the bank to trigger a renewed eurozone banking panic? We think so. Read more

Inquiring minds want to know: can blockchain reconcile 200% institutional ETF ownership?

A good questioned posed to us by former financial “ops guy” Fred Sommers (now retired) on Tuesday, relates to whether or not a blockchain can deal with the phenomenon of lots of different institutional parties thinking they own the very same ETF share? Read more

The diminishing returns of blockchain fetishism

Rather than pretending resources spent on data systems in information exclusive industries (like banking) can lead to longstanding productivity gains which don’t just buy us a little time until the next paperwork crisis in five years time, perhaps we should invest that money in the expansion of industrial capacity?  Read more

SDRs and the renminbi

China will join the exclusive club of “hard currency” issuing countries when its currency, the renminbi, becomes a fully fledged member of the IMF’s special drawing right basket on October 1. Read more

Are bank reserves meaningless?

Is the central bank in the business of lending bank reserves for final and absolute settlement purposes, or is it now in the business of lending safe assets like Tbills for final and absolute settlement purposes?  Read more

Breaking insurance models with big data

In the brave new world of machine learning, big data and artificial intelligence, no good deed will go unnoticed and no bad deed will go unpunished. Or so at least the dream goes.
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Doubling up on Mars

A cryptic Tweet from Iron-Man Elon Musk stating “Turns out MCT can go well beyond Mars, so will need a new name…” delighted the tech/science internet community when it was posted on Sept 17. Read more

Your comprehensive guide to the all new ‘Upstairs Downstairs’ London property market

Three months down the line, enough time has passed to properly assess the impact of Brexit on the London property market. Read more

Ski chalets, millennials and Brexit

Knight Frank’s annual ski property review is out. The good news for the chalet market is… Brits don’t have that much of an influence on chalet prices these days, so Brexit’s been no problem so far. Read more

How do you solve a problem like RTGS moral hazard?

With blockchain distributed ledger technology (DLT) of course.

The good news is that with the release of its new consultation paper on Friday titled A new RTGS service for the United Kingdom: safeguarding stability, enabling innovation, the BoE finally seems to be acknowledging that its real-time gross clearing system (RTGS) is far from perfect and does need overhauling.

But before we get to the role DLTs may play in that overhaul, some background on RTGS first. Read more

What’s old is new again, fintech news edition

Found scattered around a London-based fintech incubator set-up this week:

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Uber, the trading stamp unicorn

Uber, the unicorn that likes to transform investor funds into cheap promotional giveaways and publicity stunts, is hosting a pool party this Thursday and Friday in London to drum up support for its UberBus UberPool offer.

If you’re in the Uber London database you will have received this:

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Blockchain debate today at 1pm

Fed up of blockchain hype? Or, convinced that a shared database will revolutionise the world as we know it? Or, don’t know one way or the other?

The FT’s called a debate in which both sides of the argument will be properly defended. It’s in Markets Live form. It’s at 1pm UK time today. It features Izzy vs Simon Taylor, co-founder and blockchain director of 11FS.

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Mythbusting Uber’s valuation

Black cab drivers protesting in London in February. (Photo by Dan Kitwood/Getty Images)

Uber, the ride hailing app, is the archetypal billion dollar unicorn.

How it’s managed to convince investors it’s worth $62.5bn, however, is the real mystery, given its model is arguably neither innovative or viable. Read more

Tuna blockchains and Chilean Seabass

This is a schematic from a London-based company called Provenance which is trying to “commit tuna” to the Ethereum blockchain. It comes via a report with a handy public link:

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QE: quantitatively shrinking collateral reuse

Adding to the QE scarcity concerns already highlighted by David earlier on Monday, here’s a couple of charts from Citi’s Hans Lorenzen reflecting the fundamental “too much of a good thing” problem with QE.

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A bonfire of the Swiss watches

Ever since the Chinese government cracked down on “gift giving” as part of its anti-corruption campaign, Swiss watch exports have taking a beating.

Here’s the trend, courtesy of a UBS European luxury note out Wednesday:

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Blockchains? Where we’re going, we don’t need blockchains

In today’s daily blockchain bulletin we bring you news that next big thing in financial back-office technology isn’t actually the blockchain. Apparently it’s something called a “distributed concurrence ledger”.

We’re not yet convinced that’s a thing, but the white paper outlining the DisLedger DCL concept does at least provide a refreshingly honest account of the core problems with blockchains. Read more

DLTs and the “can’t we all just get along?” barrier

Another day, another blockchain distributed ledger technology (DLT) report*. Today’s comes from the World Federation of Exchanges, which provides us with a survey of what financial market infrastructure types are thinking about DLT. And, interestingly enough, the bulk of the survey is dedicated to unknown, unknowns.

Since DLT hype is exclusive to all other media outlets on the internet, we won’t feel bad about highlighting some of the real concerns being raised by market practitioners in the space with respect to DLT rollout. Read more

We already have a utility settlement coin: it’s called the euro

Four banks have stolen loads of column inches on Wednesday with news that they are developing “a new form of digital cash that they believe will become an industry standard to clear and settle financial trades over blockchain, the technology underpinning bitcoin”.

In the fanfare, however, lots of common sense has been abandoned.

The big idea here (allegedly) is that banks will use a “utility settlement coin” to bypass the need for costly and inefficient fiat liquidity from the cbank.

The utility settlement coin, based on a solution developed by Clearmatics Technologies, aims to let financial institutions pay for securities, such as bonds and equities, without waiting for traditional money transfers to be completed. Instead they would use digital coins that are directly convertible into cash at central banks, cutting the time and cost of post-trade settlement and clearing.

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Podcast: Alphachat’s inaugural film review tackles Tron and Tron Legacy

Alphachat is available on Acast, iTunes and Stitcher. Read more

How global money transfers will work in the future

Courtesy of WEF: How blockchain is going to become the beating heart of the global financial system, neatly summarised in two charts and a few explanatory bullet points.

Current process:

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More on Libor and that Japan connection

October 17 is going to be a big day for global USD money markets. It’s the deadline by which prime money market reforms must adjust to floating NAV models, leaving only those funds investing in government securities able to offer par value protection. The likes of Zoltan Pozsar at Credit Suisse are expecting banks to lose a significant whack of unsecured bank funding as a result. Read more

How I learned to stop blockchain obsessing and love the Barry Manilow

Financial hype cycles are predictable mostly because they mimic fashion fads and music fads.

For example, there was a time in this reporter’s life when she aspired to be cutting edge and cool. Joyfully, no longer.

This involved dying her hair pink (as much as she could get away with without being expelled), reading NME and Melody Maker, and listening to the most obscure bands available in the acceptable genre, which was Indy rock.

If and when the bands went “mainstream”, however — something assessed by whether the year below was listening to them — it was time to move on and find something more obscure. “Are you seriously listening to Blur? What seriously? Jeez. I much prefer Radiohead. What!? You’ve never heard of Radiohead? I can’t believe it. I’ve been a fan for like ‘forever’. You’re not cool.” Read more

Bitfinex and a 36 per cent charge from the school of life

Publicly, the Hong Kong-based bitcoin exchange Bitfinex has lumped its users with a 36 per cent haircut on all balances to cover the $70m hack which it experienced last week.

The haircut applies to all customers irrespective of whether they were holding bitcoin balances or dollar balances or other altcoin balances. But customers don’t come away with nothing! No. Not in the world of virtual money creation. That would be crazy. They get a BFX token (an IOU) as compensation.

Privately and anecdotally, however, customers are reporting some variance with regard to the way the haircut is being imposed. Some US customers, for example, who only had dollar balances are reporting they’ve been able to get all their money back. Read more

Day three post Bitfinex hack: Bitcoin bailouts, liabilities and hard forks

On Wednesday, we argued that the loss of approximately $70m worth of bitcoin from customer segregated accounts held at Bitfinex should give the banking industry pause for thought with respect to adopting blockchain and bitcoin-based financial technologies.

Today, we’re going to look at the wider implications of the hack, and the potential fallout in terms of legal risk. Read more

The BoE and those companies materially contributing to the UK

Mark Carney is still giving more details of today’s policy actions (press conference here). But for now, if you’re a company considering leaving Britain because of Brexit, perhaps take a good hard look at this from the August 2016 inflation report: Read more

Time to reevaluate blockchain hype

The Hong-Kong based Bitfinex exchange is short 119,756 bitcoins after being hacked on Tuesday, though nobody can be sure what’s really happened because ‘hacking’ is a loose term and can encapsulate almost anything, including an internal security breach. (Do see the case of Mt Gox.) The mark-to-market value of the stolen coins is roughly $70m, but again who can really tell their true worth. Bitcoin is an asset class where the liquidation of 119,756 (approximately 0.8 per cent of the total bitcoin circulation) can move the market more than 20 per cent, suggesting a certain fantastical element to the valuation. Read more