Posts by Josh Galper

LCH, Repo

LONDON (Reuters) – Nearly all UK-based clearing of euro-denominated repo and government bond trades moved to Paris this week, the London Stock Exchange’s clearing arm said on Thursday in a…

Federal Reserve paper shows securities lending benefits to OTC market liquidity

February 21, 2019

Corporate Bonds, Federal Reserve, Securities Lending

Corporate Bonds, Federal Reserve, Liquidity, Securities Lending, topstory

In a strong validation for the role of securities lending in capital markets, a Federal Reserve working paper has documented that securities lending is a direct contributor to market liquidity.…

BIS Working Paper: Safe assets: made, not just born

February 20, 2019

BIS, HQLA, safe assets

Official reserve managers have a big stake in the debate over safe assets: their portfolios just about define such assets. This paper conveys the message that reserve managers need not…

Fed blog suggests high bank reserves are better for financial stability

February 20, 2019

Basel III, Federal Reserve, Liberty Street Economics, Liquidity

Stressed Outflows and the Supply of Central Bank Reserves Ryan Bush, Adam Kirk, Antoine Martin, Phil Weed, and Patricia Zobel Since the financial crisis, banking regulators around the world have…

For US banks, is CCAR or the Leverage Ratio the binding constraint on securities finance

February 20, 2019

Basel III, Federal Reserve, Regulatory, US

CCAR, Leverage Ratio, topstory, US

The Federal Reserve’s Comprehensive Capital Adequacy Review (CCAR) stress test are more of a binding constraint on bank’s use of capital than the Leverage Ratio for some activities, for example…

ECB papers highlight the state approach to solving market problems

February 19, 2019

Europe, Regulatory

ECB, Europe, Regulation, topstory

Recent European Central Bank (ECB) working papers on collateral have been really good, well researched and thoughtful about the problems they are tackling. They also show a continued bias towards…

ESMA issues positive opinion on BaFin short selling ban on Wirecard AG

February 18, 2019

Bafin, ESMA, Short selling, Short selling bans

The European Securities and Markets Authority (ESMA) has issued an official opinion agreeing to an emergency net short position ban, for a period of two months, by the Bundesanstalt für…

ISLA: ESMA Publishes Key Priorities for 2019

February 18, 2019

CSDR, ESMA, ISLA, SFTR

ESMA has recently published its Supervisory Convergence Work Programme for 2019 (https://www.esma.europa.eu/file/50237/download?token=ry0ziDAM). Amongst other things, this contains references to both SFTR and CSDR. The full summary from ISLA is available…

What’s in the US OFR’s new repo data collection rules (Premium)

February 18, 2019

Big Data, cleared repo, Regulatory, Repo, US

CCP, FICC, OFR, Repo, topstory, US

The US Office of Financial Research last week released its final rules for repo data collection from CCPs with open commitments of $50 billion in repo activity over the last…

ECB paper profiles the Euro IRS market

February 16, 2019

ECB, interest rate swaps

Working Paper Series The anatomy of the euro area interest rate swap market Silvia Dalla Fontana, Marco Holz auf der Heide, Loriana Pelizzon, Martin Scheicher Using a novel regulatory dataset…

ECB Working Paper: Money markets, collateral and monetary policy

February 15, 2019

collateral, ECB, Money Markets

Money markets, collateral and monetary policy ECB Working Paper Series Fiorella De Fiore, Marie Hoerova, Harald Uhlig Interbank money markets have been subject to substantial impairments in the recent decade,…

ISLA publishes GMSLA Pledge documentation Q&A

February 14, 2019

ISLA, pledge

Following the initial launch of the new GMSLA “Pledge” Structure Documentation, ISLA is delighted to publish a series of supporting Frequently Asked Questions (FAQs). The document is available for download…

US mutual fund and ETF seclending data causing trouble already (Premium)

February 14, 2019

Securities Lending

ETF, mutual fund, sec, Securities Lending, topstory

The US Securities and Exchange Commission meant well when it mandated that all US closed end and open end mutual funds, and ETFs and Variable Annuities, report their securities lending…

CanDeal partners with six Canadian Banks to Create Market Data Hub

February 13, 2019

Canada, CanDeal, derivatives

The six largest Canadian banks have partnered with CanDeal to create the country’s first comprehensive fixed income and derivatives market data hub. The Data-as-a-Service (DaaS) business, DataVault Innovations, intends to…

CNBC: Fidelity and Schwab cut trading commissions on more ETF

February 13, 2019

ETFs, fidelity, Schwab

The price war between major U.S. brokerages heated up Tuesday after Charles Schwab and Fidelity both announced they would expand commission-free trading to hundreds more exchange-traded funds. Both companies said…

Opportunities for SFTR data in the private sector (Premium)

February 13, 2019

Big Data, ESMA, Europe, Repo, Securities Lending

Data, ESMA, SFTR, topstory

We’ve been thinking about what the markets will do with SFTR data when it is published by Trade Repositories. In particular, we’ve been thinking about what Finadium plans to do…

US Office of Financial Research to collect CCP repo transactions

February 12, 2019

GCF Repo, OFR, Repo

The U.S. Office of Financial Research adopted a final rule today to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo) market. The daily…

Finadium: Trust, Technology and Advances in Crypto Privacy

February 12, 2019

Cryptocurrency, Technology

Crypto, Finadium, privacy, technology

Trust remains a critical component of building a successful crypto marketplace. While cryptocurrencies and tokens have proven theoretically interesting to the public, continued hacks and exposures of transactions mean that…

BIS Working Paper: Central counterparty capitalization and misaligned incentives

February 12, 2019

BIS, capitalization, CCPs, skin in the game

Wenqian Huang 11 February 2019 PDF full text This paper investigates for-profit central counterparties (CCPs), asking whether their incentives might undermine financial stability. Such CCPs choose how much capital to…

FSB work plan for 2019 focuses on wrapping up loose ends

February 12, 2019

Financial Stability Board, FSB

FSB work programme for 2019 This work programme details the FSB’s planned work and an indicative timetable of main publications for 2019. It reflects the FSB’s continued pivot from policy…

Indonesia prepares new Securities Finance Agency to provide financing

February 12, 2019

ABNR, Indonesia, securities finance

The Financial Services Authority (“OJK”) has issued a regulation that provides a detailed framework for the establishment of a dedicated Securities Finance Agency (Lembaga Pendanaan Efek / “SFA”) so as…

Finadium training: Securities Lending 101 client webinar, March 5, 2019

February 12, 2019

Securities Lending

Securities Lending, topstory

Finadium will present an online training session for our clients: Securities Lending 101 will run on Tuesday March 5, 2019 at 10AM EST / 3PM GMT / 11PM HKT. We are…

Eurex clears first swap transaction for U.S. end clients

February 11, 2019

Eurex, OTC derivatives, US

Eurex Clearing, one of the world’s leading central counterparties (CCP), has cleared its first swap transaction for end clients domiciled in the U.S. Citi is the first futures commission merchant…

Fed blog on the dominance of the US Dollar as a reserve currency

February 11, 2019

Federal Reserve Bank of New York, Liberty Street Economics, reserve currency, US dollar

The U.S. Dollar’s Global Roles: Where Do Things Stand? Liberty Street Economics Linda S. Goldberg and Robert Lerman Previous Liberty Street Economics analysis and New York Fed research addressed the…

On the buy-side, “if you have no collateral strategy, you’re dead”

February 11, 2019

Collateral, Collateral Management

BOCT, buy-side, collateral management, Frankfurt, topstory

We heard this from a buy-side firm last week preparing for our Business of Collateral Trading conference coming up in Frankfurt on February 21. Collateral strategy on the buy-side is…

Fed’s Randal Quarles: next steps for the Financial Stability Board

February 10, 2019

Federal Reserve, FSB, Quarles

Ideas of Order: Charting a Course for the Financial Stability Board Vice Chairman for Supervision Randal K. Quarles At Bank for International Settlements Special Governors Meeting, Hong Kong February 10,…

Finadium Big Ideas Quarterly Q1 2019 now online

February 7, 2019

Securities Lending

BOCT, events, FISL NYC, Repo, Securities Lending, topstory

Our quarterly presentation on research, news and events. Finadium Securities Finance, Collateral and Derivatives subscription clients can log in and download the presentation here. If you are already logged in,…

MTS sees record trading on its repo markets in January 2019

February 7, 2019

MTS, Repo

MTS Repo sees highest ever trading day on 21 January 2019 January was a record month for repo market activity on MTS MTS, the electronic trading platform that is part…

DFAST and CCAR scenarios for 2019: what’s the worst that could happen?

February 7, 2019

Federal Reserve, Regulatory, US

capital adequacy, CCAR, counterparty defaults, DFAST, Federal Reserve, Regulation, topstory

The Federal Reserve has released its scenarios for the 2019 Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act stress test (DFAST) exercises. The scenarios typically include Baseline, Adverse, and…

Tradeweb reports new post-crisis high in repo trading of over $170 billion daily for January 2019

February 6, 2019

Trading activity set a new record in January 2019 following the previous high set in December 2018. Average daily volume (ADV) for Tradeweb Markets of $624.5 billion (bn) across rates,…

Comments on whether the US NSFR will be a binding constraint on securities finance

February 6, 2019

Basel III, Regulatory, US

NSFR, Regulation, topstory, US

The final US Net Stable Funding Ratio (NSFR) rules have been expected for some time. Although US regulators produced draft NSFR rules in 2016, the market has still been in…

NY Fed proposes change to the Overnight Bank Funding Rate

February 5, 2019

Federal Reserve, OBFR

As the administrator of the Overnight Bank Funding Rate (OBFR), the New York Fed is proposing a change in the composition of the rate, and is providing details of this…

BCBS: An examination of initial experience with the global systemically important bank framework

February 5, 2019

BCBS, BIS, G-SIBs

This paper presents a first analysis of the experience to date with the global systemically important bank (G-SIB) framework, the methodology for assessing the systemic importance of G-SIBs. Several issues…

ECB finds €10.9 trillion in Euro HQLA but potential for pockets of HQLA scarcity

February 5, 2019

ECB, HQLA

Availability of high-quality liquid assets and monetary policy operations: an analysis for the euro area Occasional Paper Series No 218 / February 2019 Roel Grandia, Petra Hänling, Michelina Lo Russo, Pontus…

The Eurosystem Collateral Management System (ECMS) and tri-party: good, bad or indifferent? (Premium)

February 5, 2019

Collateral Management, ECB, Europe

ECB, ECMS, European Central Bank, Eurosystem Collateral Management System, topstory

The ECB recently took the next step in their Eurosystem Single Market Infrastructure Gateway (ESMIG) project, which itself progresses the aims of the Eurosystem Collateral Management System (ECMS). We look…

FSB publishes Global Monitoring Report on Non-Bank Financial Intermediation 2018

February 4, 2019

FSB, Non-Bank financial intermediation

The Financial Stability Board (FSB) today published the Global Monitoring Report on Non-Bank Financial Intermediation 2018. The report presents the results of the FSB’s eighth annual monitoring exercise that assesses…

EquiLend Partners With Stonewain to Offer Fully Integrated Securities Finance Platform

February 4, 2019

EquiLend has partnered with Stonewain to offer securities finance market participants around the globe the ability to manage their book of business on a single, comprehensive and integrated platform. The…

Behind the uptick in Jan 31 2019 US repo rates (Premium)

February 4, 2019

Repo, SOFR, Tri-Party Repo, US

Canadian banks, Repo, topstory, tri-party, US

Some market participants were surprised while others saw it coming, but all the same, US repo rates saw a sharp uptick on Thursday Jan 31. According to dealers, at one…

ECB working paper: From cash- to securities-driven euro area repo markets: the role of financial stress and safe asset scarcity

February 2, 2019

ECB, Repo

Claus Brand, Lorenzo Ferrante, Antoine Hubert No 2232 / January 2019 Focussing on repo specialness premia, using ISIN-specific transaction-by-transaction data of one-day maturity repos, we document a gradual shift from…

OCC seclending CCP down 1.5% in Jan 2019 year over year

February 1, 2019

OCC, Options Clearing Corp, Securities Lending

OCC’s securities lending CCP activity was down 1.5 percent in new loans from January 2018 with 114,940 transactions last month. The average daily loan value at OCC in January 2019…

BofE Working Paper: To ask or not to ask: collateral vs screening in lending relationships

February 1, 2019

Bank of England, collateral

We study the impact of higher capital requirements on banks’ decisions to grant collateralized rather than uncollateralized loans. We exploit the 2011 EBA capital exercise, a quasi-natural experiment that required…

NY Fed: notes from the Fourth Annual Conference on the Evolving Structure of the U.S. Treasury Market

February 1, 2019

Federal Reserve, US Treasuries

The New York Fed recently hosted the fourth annual Conference on the Evolving Structure of the U.S. Treasury Market. The one-day event was co-sponsored with the U.S. Department of the…

ARRC addresses volatility of SOFR

January 31, 2019

ARRC, SOFR

Contracts referencing SOFR are usually based on an average of daily interest rates over a given period of time. These averages of SOFR are quite smooth and can be easily…

RepoClear hits €197 trn in 2018 volume, up 13% from 2017

January 31, 2019

ECB’s Yves Mersch: The possible triangle – frictionless movement of payments, securities and collateral across Europe

January 31, 2019

collateral, ECB, ICMA

Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the 2019 Annual General Meeting of the International Capital Markets Association’s European Repo and…

ECB publishes results of Dec 2018 SESFOD

January 31, 2019

ECB, SESFOD

Results of the December 2018 SESFOD Survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets Credit terms tightened for all counterparts, but non-price terms offered…

Bloomberg dips its toe into securities lending and repo trading (Premium)

January 31, 2019

CCP, Repo, Technology

Bloomberg, Repo, Securities Lending, topstory

With some nice looking black and white brochures and client meetings at the end of 2018, Bloomberg is telling the market that it will offer securities lending and repo trading…

LSEG to acquire 4.92% of Euroclear Holding SA/NV

January 30, 2019

London Stock Exchange Group plc (“LSEG”) announces it will acquire an aggregate 4.92% stake in Euroclear’s share capital for €278.5 million (£241.9 million). Euroclear is a leading financial market infrastructure…

ESMA updates CSDR, benchmark Q&As

January 30, 2019

Benchmark Regulation, CSDR, ESMA