ECB to end Asset Purchase Program in 2018
At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending…
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Basel Committee seeks to reduce window dressing in the Leverage Ratio
The Basel III leverage ratio standard comprises a 3% minimum level that banks must meet at all times, a buffer for global systemically-important banks and a set of public disclosure…
Read More Euroclear: Asset Managers making securities lending mainstream
While the global securities lending market all but closed in the aftermath of the global financial crisis, the past decade has seen it come back strongly. But according to buy-side…
Read More European Commission adopts SFTR rules
Monitoring of financial stability risks outside the banking sector: Commission adopts package of rules to increase transparency in securities financing markets In an important step towards increasing the transparency of…
Read More BNYM purchases Trading Apps’ agency lending IT and IP
On November 29th, BNY Mellon purchased the agency securities finance software and associated intellectual property of Trading Apps, the UK-based provider of market-leading front-end software. The transaction will deliver substantial…
Read More One of JPM’s EquiLend ownership positions sold to NBC
The sale to National Bank of Canada was confirmed on media sites. According to EquiLend CEO Brian Lamb, “NBC is a strong supporter of fintech and automation in the securities…
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The buzz on Total Return Futures (Premium)
The markets are starting to talk more about Total Return Futures (TRF) as a realistic alternative to Total Return Swaps (TRS), which themselves are competition for securities finance products. TRFs…
Read More WSJ: Investors sell short $10 Billion of bond ETFs
Warning lights are flashing in a corner of U.S. debt markets. Bond investors scrambling to protect themselves from losses are increasingly using bets against the largest junk-bond exchange-traded funds and…
Read More Morningstar says benefits of securities lending to fundholders outweigh the risks
Securities Lending: An Examination of the Risks and Rewards By Adam McCullough | 11 December 2018 Securities lending carries risk, but the risk entailed today is less than in the past. Increased…
Read More Basel Committee publishes Pillar 3 disclosure requirements – updated framework
The Basel Committee on Banking Supervision has published today updated Pillar 3 disclosure requirements. These requirements, together with the updates published in January 2015 and March 2017, complete the Pillar…
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Finadium: US Repo Market at End of 2018
Finadium has released an end of year overview on the US repo market including key themes for liquidity and spreads in the coming year. This report is based on Finadium…
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Are fiduciaries risking litigation by not electing scrip dividends or rights issues? (Premium)
A new white paper by a lawyer and a consultant on behalf of Scorpeo, a corporate actions consultancy, argues that asset holders that do not optimize scrip dividends and rights…
Read More ISDA Publishes 2018 Benchmarks Supplement Protocol
December 10, 2018 ISDA has today published the ISDA 2018 Benchmarks Supplement Protocol, intended to help market participants incorporate the ISDA Benchmarks Supplement into their interest rate, FX, equity and…
Read More ISDA: Key Trends in the Size and Composition of OTC Derivatives Market
December 10, 2018 A new research paper has been posted on ISDA.org: Key Trends in the Size and Composition of OTC Derivatives Market This paper analyzes recent trends in the size and…
Read More FCA proposes permanent measures for retail CFDs and binary options
The Financial Conduct Authority (FCA) is proposing rules to address harm to retail consumers from the sale of certain complex derivative products with the publication of two consultation papers. The…
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A European challenge to the dollar highlights the breakdown of the Bretton Woods order
Most Americans don’t understand the immense benefit they receive from the dollar as the world’s reserve currency, nor the fact that this global choice is the result of the US-led…
Read More ARRC Releases Consultations on Fallback Contract Language for Bilateral Business Loans and Securitizations for Public Feedback
The Alternative Reference Rates Committee (ARRC) released consultations on U.S. dollar (USD) LIBOR fallback contract language for bilateral business loans and securitizations for public feedback. These consultations outline draft language…
Read More ICMA: European bond markets still waiting to experience the benefits of MiFID II implementation
6 December 2018 ICMA has today published a report on the impacts and challenges of MiFID II/R for the international bond market in the year since the implementation date. The…
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What we learned at yesterday’s securities finance event in Zurich (Premium)
That was really interesting. We held our fifth annual securities lending and repo update yesterday in Zurich. Discussion centered on SFTR and the evolution of the securities finance business in…
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Progress on Frankfurt as the next big banking hub
Arguments are growing in favor of Frankfurt as a larger financial hub post-Brexit. A regional lobbyist is saying that 750 to 800 billion Euros in assets will transfer from London…
Read More World Federation of Exchanges report finds securities lending helpful to draw investors to emerging markets
What attracts international investors to emerging markets? World Federation of Exchanges December 2018 The only market structure feature found to be positively associated with international invest- ment is the introduction…
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Fed survey sharpens understanding of banks and IOER
A new survey from the Federal Reserve of Senior Financial Officers shines light on why banks use Interest on Excess Reserves (IOER), and what options they might choose if their…
Read More Fed to expand UST data collection beyond TRACE
The Structure of the Treasury Market: What Are We Learning? Governor Lael Brainard At “The Evolving Structure of the U.S. Treasury Market” Fourth Annual Conference Hosted by the Federal Reserve…
Read More Reuters: EU takes new step on derivative clearing, despite UK, U.S. concerns
BRUSSELS (Reuters) – European Union governments backed on Monday a proposal that could force systemic foreign clearing houses with operations in the EU to relocate to the bloc if they…
Read More OCC seclending CCP up 4.2% in Nov 2018 year over year
Securities Lending: OCC’s securities lending CCP activity was up 4.2 percent in new loans from November 2017 with 111,814 transactions last month. Year-to-date stock loan activity increased 18.5 percent from…
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The ECB finds risk in ETF securities lending and TRS – is this real or a rehash of old stories?
The European Central Bank released their Financial Stability Report last week, including a feature on counterparty risk in synthetic and physical ETFs. We find some valid points in the analysis…
Read More Fed working paper: “Emergency Collateral Upgrades”
During the 2008-09 financial crisis, the Federal Reserve established two emergency facilities for broker-dealers. One provided collateralized loans. The other lent securities against a pledge of other securities, effectively providing…
Read More Spain to launch Financial Transactions Tax
Ernst & Young notes: The Government announced the creation of a Financial Transactions Tax (FTT); as anticipated, the parliamentary proceeding for its approval (Bill proposal, or Royal-Decree Law) has not…
Read More Tradeweb Connects to Eurex for Direct Clearing
As part of their efforts to enhance clients’ trading and clearing workflows, Eurex Clearing, a leading global central counterparty, and Tradeweb Markets, a leading global provider of fixed income, derivatives…
Read More European Parliament MEPs call for inquiry on cum-ex trades
Cum-ex tax fraud: MEPs call for inquiry, justice and stronger tax authorities The tax fraud, which was uncovered by a team of investigative journalists and has affected at least 11…
Read More Fed blog: “Breaking Down TRACE Volumes Further” finds off-the-run is 27% of overall volumes
Following an earlier joint FEDS Note and Liberty Street Economics blog post that examined aggregate trading volume in the Treasury cash market across venues, this post looks at volume across…
Read More BoE Systemic Risk Survey 2018 H2: 67% expect a high-impact risk event in the short term
Probability of a high‑impact event and confidence in the UK financial system The perceived probability of a high‑impact event in the UK financial system over the short term has increased…
Read More BoE Financial Stability Report: UK banks can withstand a Brexit shock
Since the EU referendum in 2016, the FPC and other authorities have identified risks of disruption to the financial system that could arise from Brexit and worked to ensure they…
Read More Fed’s Powell says that financial stability risks are moderate
The Federal Reserve’s Framework for Monitoring Financial Stability Chairman Jerome H. Powell November 28, 2018 The New Approach to Financial Stability This new approach can be divided into three parts.…
Read More Bundesbank’s Burkhard Balz: patience is paying off for RMB in international payments
Burkhard Balz: The role of the renminbi in international payments Keynote speech by Mr Burkhard Balz, Member of the Executive Board of the Deutsche Bundesbank, at the 5th European-Chinese Banking…
Read More Fed blog: Is the United States Relying on Foreign Investors to Fund Its Larger Budget Deficit?
The federal tax cut and the increase in federal spending at the beginning of 2018 substantially increased the government deficit, requiring a jump in the amount of Treasury securities needed…
Read More Finadium: Stablecoins, Capital Markets and the Fiat/Digital Currency Divide
A new Finadium report explores stablecoins, an exciting new product to enter financial markets. They are a potential bridge between the digital and fiat currency worlds that could end up…
Read More ISDA Publishes Preliminary Results of Benchmark Consultation
ISDA has today published a statement summarizing the preliminary results of a consultation on technical issues related to new benchmark fallbacks for derivatives contracts that reference certain interbank offered rates…
Read More IFLR: Initial margin prompts shift to unconventional collateral
Phase four and five firms are moving away from standard forms of eligible collateral under the uncleared margin rules (UMR), but sources warn that this will lead to delays due…
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Why it’s time to stop quoting 30 year LIBOR (Premium)
It’s hard to take LIBOR seriously anymore in its current formulation. We analyzed some recent data and find a lack of credibility in overnight LIBOR rates compared to the Secured…
Read More A primer on the Fed’s proposed stress capital buffer and stress leverage buffer (Premium)
The Federal Reserve has proposed a new stress capital buffer based on stress test results. This would take the place of the current fixed 2.5% stress capital buffer. There is…
Read More Banque de France’s Villeroy de Galhau: Brexit an opportunity for European financial infrastructure
François Villeroy de Galhau: The consequences of Brexit for the French and European financial sectors Speech by Mr François Villeroy de Galhau, Governor of the Bank of France and Chairman…
Read More An odd WSJ article on the US repo market
Investment Banks’ Secret Cash Cow Jon Sindreu Nov. 23, 2018 Investment banks have made a nice little money-spinner out of a once broken trading strategy: The repo. But now that…
Read More ESMA issues statement on managing risks of a no-deal Brexit for central clearing
The European Securities and Markets Authority (ESMA) is publishing this Public Statement to address the risks of a no-deal Brexit scenario in the area of central clearing. The ESMA Board…
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China and Japan are holding fewer US Treasuries. What happens next?
China and Japan together hold 35% of US Treasuries outstanding, according to new US Treasury data. But that figure is decreasing and there are no big buyers stepping up to…
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Which money fund will be first to force price improvement on repo CCPs? (Premium)
Cleared repo is growing but rates remain about the same as in the bilateral market. How long will money funds accept this status quo? Or, how long can big cash…
Read More Global regulatory committees say CCP adoption working but concentration of clearing firms is high
The Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published today…
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Finadium launches new event in Frankfurt, The Business of Collateral Trading, for February 2019
Finadium is announcing a new event launch, The Business of Collateral Trading, 21 February 2019 in Frankfurt. This event is the result of our in-depth research and consulting activities in Europe…
Read More LCH SwapAgent completes its first swaption trade
Deutsche Bank and Nomura are counterparties to the first swaptions trades processed through LCH SwapAgent Trades were brokered by ICAP as interdealer broker LCH SwapAgent offers standardised infrastructure and efficiencies…
Read More FSB adds Groupe BPCE to G-SIB list, removes Nordea and RBS
The Financial Stability Board (FSB) today published the 2018 list of global systemically important banks (G-SIBs) using end-2017 data and an assessment methodology designed by the Basel Committee on Banking…
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