High up in a New York City skyscraper, China’s biggest bank is playing in the shadows of American finance.
The prize for Industrial & Commercial Bank of China Ltd. isn’t stocks, bonds or currencies. It’s the grease in the wheels of all those markets: repurchase agreements.
By exploiting a loophole in rules intended to keep U.S. banks from getting “too big to fail,” the state-owned ICBC has become a go-to dealer in repos in just a few short years, alongside longtime powerhouses like Goldman Sachs Group Inc. The short-term loans allow investors to borrow money by lending securities, serving a vital role in day-to-day trading on Wall Street.
The full article is available at https://www.bloomberg.com/news/articles/2017-06-06/with-260-to-1-leverage-a-chinese-giant-takes-on-goldman-in-repo