W3C home > Mailing lists > Public > public-webpayments@w3.org > October 2013

Re: A Suggested Re-Statement of Payswarm Use Case 2.11

From: Joseph Potvin <jpotvin@opman.ca>
Date: Sun, 6 Oct 2013 08:20:35 -0400
Message-ID: <CAKcXiSpugkGWihmdccQJgg1LDQ2v6=cyZO3+LR_jWFNvBnjAaA@mail.gmail.com>
To: Web Payments CG <public-webpayments@w3.org>
Bug report:    ...in the $5.3 trillion-a-day (i.e $1.9 quadrillion-a-year)
foreign exchange market.

"Traders at some of the world’s largest banks sought to manipulate the
WM/Reuters currency rates in their favor by pushing through trades before
and during the 60-second windows when the benchmarks are set, five current
and former dealers with knowledge of the practice said in June. Some
dealers colluded with counterparts to boost their chances of moving the
rates, said two of the people, who worked in the industry for a total of
more than 20 years.
   Index Providers: The WM/Reuters rates are used by fund managers to
determine what they pay for currencies and to compute the day-to-day value
of their holdings, and by index providers such as FTSE Group and MSCI Inc.
(MSCI) that track stocks and bonds in multiple countries. While the rates
aren’t followed by most investors, even small movements can affect the
value of what Morningstar Inc. (MORN) estimates is $3.6 trillion in funds
including pension and savings accounts that track global indexes.
   Traders said that because they agree to deal at the 4 p.m. WM/Reuters
price, they have to push through the bulk of their trades during the window
when the rate is calculated to minimize potential losses. That leads to a
surge in trading volume, which can intensify any moves, they said."

See: www.wmcompany.com/wmr/index.htm
"Rates are fixed using a patented proprietery Methodology."  [spelling
mistake in original]

Question: "Who owns" the bug? The traders who learned the methodology's
design characteristics? Or the designer and patent-holder of the flawed


Joseph Potvin

On Sun, Sep 15, 2013 at 3:22 PM, Joseph Potvin <jpotvin@opman.ca> wrote:

> Ahead of the "Web Payments and Enabling Price Stability" BoF a day
> after the upcoming Edgeconf-NYC I would like to share some thoughts
> about price stability for transactions involving parties located
> within and amongst monetary jurisdictions.
> BoF Info: https://payswarm.com/events/2013/nyc-web-payments-bof
> Open-invitation to BoF, but RSVP.
> My suggestion is that the current Universal Payment System Use Case
> 2.11 "Currency Exchange" expressed in the use cases of the Payswarm
> in-progress reference implementation, should instead be named
> "Maintain Contract Price Stability". An optional Sub Use Case could
> then be "Negotiate Exchange Rate". This recommendation applies also to
> IFEX bullet point Multi-currency Exchange Rate Negotiation.
> https://payswarm.com/specs/source/use-cases/
> http://www.ifex-project.org/our-proposals/ifex
> A detailed explanation (v1.00) has just been posted on my project
> management site:
> http://www.projectmanagementhotel.com/projects/free-libre-commerce/wiki/Use_Case_%E2%80%93_Price_Stability
> http://www.projectmanagementhotel.com/projects/free-libre-commerce?&lang=fr&lang=en
> Discussion welcome on this list, and/or at the BoF.
> --
> Joseph Potvin
> Operations Manager | Gestionnaire des opérations
> The Opman Company | La compagnie Opman
> http://www.projectmanagementhotel.com/projects/opman-portfolio
> jpotvin@opman.ca
> Mobile: 819-593-5983
> LinkedIn (Google short URL): http://goo.gl/Ssp56

Received on Sunday, 6 October 2013 12:21:22 UTC

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