Posts by Josh Galper

EFAMA, ETFs, Europe, Liquidity

EFAMA recently finalised a Comment Paper in response to the ECB’s November 2018 findings around liquidity and counterparty risks in ETFs, included in the ECB’s semi-annual Financial Stability Review. While…

Global Investor: LCH to end Euro repo trading in London after Paris switch

July 17, 2019

LCH, Repo

Euro repo and bond trades will be completely withdrawn from London-based LCH Ltd at the start of next year. The full article is available at https://www.globalinvestormagazine.com/articles/3692895/lch-to-end-euro-repo-trading-in-london-after-paris-switch

Bank of England’s Hauser says bigger central bank balance sheets are here to stay

July 17, 2019

Andrew Hauser, Bank of England

Waiting for the exit: QT and the Bank of England’s long-term balance sheet Speech given by Andrew Hauser, Executive Director, Markets At the European Bank for Reconstruction and Development, London,…

Regulation Asia: HKMA Asks Banks to Prepare Systems for Revised Leverage Ratio

July 15, 2019

HKMA, Hong Kong, Leverage Ratio

Both the revised leverage ratio treatment of client cleared derivatives and the revised disclosure requirements will come into effect in Hong Kong on 1 January 2022, in line with the…

Fed blog: Large Bank Cash Balances and Liquidity Regulations

July 15, 2019

cash balances, Liberty Street Economics, Liquidity

The Federal Open Market Committee (FOMC) has recently communicated its aim to continue implementing monetary policy in a regime that maintains an ample supply of reserves, though with a significantly…

Key takeaways from Hazeltree’s 3rd annual buy-side treasury and portfolio finance event (Premium)

July 15, 2019

Hedge Funds, Repo

HazelTree, hedge funds, topstory, treasurers, Treasury

We attended Hazeltree’s June 4, 2019 event, “The Future of Treasury and Portfolio Finance Management and their Differentiated Benefit,” co-sponsored by Federated. The first panel featured five hedge fund treasury…

India’s YES Bank makes blockchain commercial paper issuance

July 11, 2019

News and Notes, News and Notes – Fintech

blockchain, Commercial Paper, India, YES Bank

Financial technology solutions provider MonetaGo has today announced that a commercial paper has been digitally issued in Asia for the first time using blockchain technology. MonetaGo completed this transaction through…

Finadium: Declining Securities Finance Volumes: Pricing, Problems and Solutions

July 11, 2019

Securities Lending

automation, Finadium, pricing, Securities Lending, topstory

A new report from Finadium investigates the causes of reduced securities lending volumes from the perspectives of beneficial owners, agent lenders, prime brokers and hedge funds, and seeks solutions that…

ENSO launches financing replication and reconciliation tools

July 10, 2019

Enso, financing replication

ENSO provides effective Financing Replication and Reconciliation tools that consolidate financing data across prime brokers. The services highlight the drivers of costs as well as potential avenues to reduce manual…

Fed releases updated Statement on IOSCO Compliance for the EFFR, OBFR, and Treasury Repo Reference Rates

July 10, 2019

Federal Reserve, IOSCO, Repo reference rates

The Federal Reserve Bank of New York today updated its Statement of Compliance with the IOSCO Principles for Financial Benchmarks (the Principles) to cover the inclusion of “selected deposit” transactions…

TreasurySpring launches Fixed-Term Fund (FTF) platform

July 10, 2019

TreasurySpring, the London-based financial technology company today announced the launch of its Fixed-Term Fund (FTF) platform. A Fixed-Term Fund is a completely new financial instrument, conceived, designed and built by…

CFTC says no documentation required on initial margin until the threshold amount exceeds $50 million

July 9, 2019

CFTC, Initial Margin, Phase 5, UMR

The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a Staff Advisory noting that CFTC’s uncleared swap margin rules do not require documentation…

US regulators simplify capital rules for smaller banks and exempt community banks from the Volcker Rule

July 9, 2019

capital rules, FDIC, Federal Reserve

The federal bank regulatory agencies today issued a final rule that reduces regulatory burden by simplifying several requirements in the agencies’ regulatory capital rules. The simplifications in the final rule…

Fed blog: Untangling the U.S. Dollar Funding Market

July 9, 2019

Federal Reserve, Liberty Street Economics, US repo

From Policy Rates to Market Rates: Untangling the U.S. Dollar Funding Market Gara Afonso, Fabiola Ravazzolo, and Alessandro Zori How do changes in the rate that the Federal Reserve pays…

Delta One equity finance platform announces launch

July 9, 2019

Delta One, stock loan

The first day in operation following its wide release saw a total of $3.4 Billion notional reversal and conversion interests available for system matching spread across 117 individual equity securities.…

Tradeweb repo ADV at $213.1 billion in June 2019

July 9, 2019

In the past year, Tradeweb has made significant progress in growing electronic trading of bilateral repos by helping to preserve relationships between dealers and clients while reducing the inefficiencies and…

Fed’s Powell: stress tests need to keep up with bank evolution

July 9, 2019

Federal Reserve, Jerome Powell, stress tests

Welcoming Remarks (via prerecorded video) Chair Jerome H. Powell At “Stress Testing: A Discussion and Review,” a research conference at the Federal Reserve Bank of Boston, Boston, Massachusetts Good morning…

ICMA: Repo market best practice with respect to the transition from EONIA to €STR

July 8, 2019

ICMA, non-cleared repo

The practicalities of the EONIA/€STR transition for non-cleared repo market have been discussed at length by the ICMA ERCC and the ERCC Operations Group. The ERCC has agreed on the…

TriOptima Record Compression Shrinks Notional in Eurex Clearing

July 8, 2019

compression, Eurex, TriOptima

TriOptima, a leading infrastructure service that lowers costs and mitigates risk in OTC derivatives markets, today announced that it has reduced notional outstanding at Eurex Clearing by 26% following a…

Financial Stability Institute: Proportionality under Pillar 2 of the Basel framework

July 8, 2019

Basel III, Financial Stability Institute, Pillar 2

Pillar 2 of the Basel framework aims to ensure that the minimum Pillar 1 capital and liquidity requirements are better aligned with a bank’s overall risk profile. Pillar 2 accommodates…

Understanding Deutsche Bank’s “radical transformation”

July 8, 2019

Investments, Prime Brokerage

agency lending, Deutsche Bank, prime finance, topstory

Deutsche Bank announced yesterday its long-awaited plans for righting the ship, and they are big. The firm will exit global equities and create a bad bank for assets that need…

EU CRD5/CRR2 to apply from June 28 2021

July 7, 2019

capital regulation, CRD5, CRR2, Europe

EU Capital Requirements Directive V and Capital Requirements Regulation II Finalized Shearman and Sterling The legislative amendments to the EU’s Capital Requirements Regulation and the Capital Requirements Directive, widely referred…

IHS Markit says Q2 2019 seclending revenues down 10% from last three years’ Q2 averages

July 7, 2019

IHS Markit, Securities Lending

Global securities lending revenues for Q2 2019 totalled $2.6bn, 10% below the average Q2 revenue over the last three years. There were some bright spots, with an increase in special…

SEC and CFTC propose lower margin rules for security futures

July 3, 2019

CFTC, Margin, sec, security futures

The Commodity Futures Trading Commission (“CFTC”) and the Securities and Exchange Commission (“SEC”) (collectively, the “Commissions”) are proposing amendments to regulations that establish minimum customer margin requirements for security futures.…

EBA sees European bank Basel III shortfall at EUR 135.1 billion

July 3, 2019

Basel III, EBA, Europe

The European Banking Authority (EBA) presented today, during a public hearing, the results of its Basel III implementation assessment, which includes a quantitative impact study (QIS) based on data from…

FSB publishes review of TLAC Standard

July 2, 2019

FSB, TLAC

The Financial Stability Board (FSB) today published a technical review of the implementation of the Total Loss-Absorbing Capacity (TLAC) Standard for Global Systemically Important Banks (G-SIBs) in resolution. When fully…

Can Japan get out of its deflationary spiral? (Premium)

July 2, 2019

Asia, Interest rates

Bank of Japan, deflation, interest rates, Japan, topstory

The economic position of Japan in raising its interest rates and getting out of nearly 20 years of deflation is not going well. Can anything be done at this point,…

OCC seclending CCP volumes down 10.6% in June 2019 year over year

July 1, 2019

CCP, OCC, Options Clearing Corp, Securities Lending

Securities Lending: OCC’s securities lending CCP activity was down 10.6 percent in new loans from June 2018 with 106,566 transactions last month. Year-to-date stock loan activity has decreased 3.2 percent…

BIS to set up Innovation Hub for central banks

July 1, 2019

The Board of the Bank for International Settlements (BIS) today approved the establishment of a BIS Innovation Hub to foster international collaboration on innovative financial technology within the central banking…

Winners and losers from the Basel Committee’s Leverage Ratio changes on margin and window-dressing

July 1, 2019

Basel III, Regulatory

Basel Committee, Leverage Ratio, OTC derivatives, Repo, SA-CCR, securities financing transactions, topstory

The Basel Committee on Banking Supervision (BCBS) issued changes to the Leverage Ratio last week that will have impacts to the derivatives and securities finance industries. Like any regulation, this…

Bloomberg: Democrats Back Wall Street Push to Free Up $40 Billion in Margin

June 28, 2019

affiliates, Bloomberg, collateral, Margin, US Democrats

A group of House Democrats is pressing bank regulators to roll back a rule that forces the biggest Wall Street firms to set aside as much as $40 billion as…

Fed passes 18 banks on CCAR, Credit Suisse to address “limited weaknesses”

June 27, 2019

CCAR, Federal Reserve

The nation’s largest banks have strong capital levels and virtually all are now meeting supervisory expectations for capital planning, the Federal Reserve Board on Thursday announced following its annual examination.…

Risk: LCH and Eurex create fix for floating repo’s Eonia problem

June 27, 2019

Eonia, Eurex, LCH, Repo

Clearing houses LCH and Eurex will settle floating rate repos in two stages come October, as the industry adjusts to the next-day calculation of the European Central Bank’s new euro…

State Street Settles SEC Charges for Adding Undisclosed Markups on Client Expenses

June 27, 2019

The Securities and Exchange Commission today announced that State Street Bank and Trust Company has agreed to pay over $88 million to settle charges for overcharging mutual funds and other…

Basel Committee finalizes Leverage Ratio revisions for client margin and window-dressing for SFTs

June 27, 2019

Basel Committee, Leverage Ratio, Margin, SFTs, window-dressing

The Basel Committee on Banking Supervision today released a revised treatment of client cleared derivatives for purposes of the leverage ratio. The Basel Committee also issued a revision to the…

Bank of England: discussion paper on risk management approach to collateral referencing LIBOR for use in the Sterling Monetary Framework

June 27, 2019

Bank of England, LIBOR, SONIA, Sterling Monetary Framework

The purpose of this Discussion Paper is to seek initial feedback on the Bank of England’s (the Bank) approach to the risk management of collateral referencing LIBOR for use in…

BNYM: Sponsored Repos are Surging

June 26, 2019

BNYM, FICC, sponsored repo

The volume of sponsored repo activity in the clearinghouse was $230 billion as of December 31, according to Fixed Income Clearing Corporation (FICC), which is part of settlement giant Depository…

FCA confirms recognition of the FX Global and UK Money Markets Codes

June 26, 2019

FCA, FX Global Code, UK Money Markets Code

Following consultation feedback, the Financial Conduct Authority (FCA) is today confirming that it is recognising the following voluntary market codes of best practice under its codes recognition scheme: FX Global…

Basel Committee: The costs and benefits of bank capital – a review of the literature

June 25, 2019

bank capital, Basel Committee

In 2010, the Basel Committee on Banking Supervision published an assessment of the long-term economic impact (LEI) of stronger capital and liquidity requirements (BCBS (2010)). This paper considers this assessment…

IHS Markit and Cappitech integrate on SFTR reporting

June 25, 2019

Cappitech, IHS Markit, SFTR

Cappitech, a leading provider of regulatory reporting and intelligence solutions for the financial services industry and IHS Markit, a world leader in critical information, analytics and solutions, today announced an…

What’s next as the SEC addresses more unfinished Dodd-Frank business (Premium)

June 25, 2019

Dodd-Frank, Regulatory, SEC

capital, Dodd-Frank, sec, Securities Lending, Short selling, topstory

The US Securities and Exchange Commission (SEC) scored a big win last week with the announcement of capital and margin rules for security-based swap dealers and major security-based swap market…

DTCC Sponsored Service Achieves Key Milestone in Treasury Market Clearing with Citadel Activity

June 24, 2019

Citadel, Clearing, DTCC, FICC, Repo, US Treasuries

Transactions completed by Citadel in both cash and repo highlight the potential of the Sponsored Service to significantly increase centrally cleared US Treasury activity, reducing the risks of bilateral clearing…

ARRC Releases Preliminary Report on Potential Interdealer Cross-Currency Swap Market Conventions

June 24, 2019

ARRC, cross-currency swaps, SOFR

The Alternative Reference Rates Committee (ARRC) today released a report detailing preliminary considerations for the use of risk-free rates (RFRs) in interdealer cross-currency swaps. Cross-currency swaps are actively used by…

New report warns of skilled labor shortage in UK financial sector

June 24, 2019

Technology, UK

careers, Financial Services, skills, topstory

If Brexit wasn’t bad enough, a new report from the TheCityUK’s Financial Services Skills Taskforce, an industry association, warns of a “potentially existential” challenge to the UK’s financial services businesses:…

IOSCO examines liquidity in corporate bond markets under stressed conditions

June 23, 2019

Corporate Bonds, IOSCO, Liquidity

The Board of the International Organization of Securities Commissions today published a report that examines the factors affecting liquidity in secondary corporate bond markets under stressed conditions. The report, prepared…

Reuters: China improves short-selling mechanism ahead of tech board launch

June 23, 2019

China, Reuters, Short selling

China’s securities regulator on Friday published guidelines on mutual funds participating in the securities lending business, as part of efforts to improve China’s short-selling mechanism. Under the business, mutual funds…

SEC Adopts Capital, Margin, and Segregation Requirements for Security-Based Swap Dealers and Major Security-Based Swap Participants and Amends the Capital and Segregation Requirements for Broker-Dealers

June 21, 2019

capital, Margin, sec, security-based swap dealers

The Securities and Exchange Commission took another significant step toward establishing the regulatory regime for security-based swap dealers today by adopting a package of rules and rule amendments under Title…

Bank of England working paper: Bank funding costs and capital structure

June 21, 2019

bank funding costs, Bank of England

Staff Working Paper No. 805 By Andrew R Gimber and Aniruddha Rajan If bail-in is credible, risk premia on bank securities should decrease as funding sources junior to and alongside…

Basel Committee seeks to improve Leverage Ratio for margin, Securities Finance Transactions

June 21, 2019

Basel Committee, Leverage Ratio