Direct repo transactions had a major moment of publicity from the Wall Street Journal. “Repo Market Sees a Lending Shift as Rules Bite” by Katy Burne was a very good…Read More
A short research piece by Orçun Kaya at Deutsche Bank, “Liquidity is key for the central clearing of derivatives” (March 12, 2015) is worth reading. Kaya looks at where central clearing…Read More
We argue for better language to describe various functions in financial markets. There are banks and bank holding companies that offer a wide variety of credit intermediation and agency services.…Read More
Finadium has released a new report in our Finadium for Investors series, “Perspectives on Direct Borrowing and Lending”. The report defines Direct Borrowing and Lending, sizes the market, evaluates pros…Read More
We welcome the new year with one of the thorniest issues in financial regulation: how banks calculate their internal risk. Before the end of 2014, the Basel Committee for Banking…Read More
The new Senior Credit Officer Opinion Survey (SCOOS), produced quarterly by the Federal Reserve, was just released. There were a couple things that deserved some investigation. Continue readingRead More
We spotted this visual guide to the Supplementary Leverage Ratio (SLR) in the Harvard law School Forum. It was produced by the law firm Davis Polk and is great background…Read More
Pimco Total Return Fund reduces cash & repo in favor of futures exposure. Are they feeling the lack of liquidity in repo?
A September 17th article in Bloomberg “Bill Gross Used $45 Billion Derivatives to Lift Fund Gain” by Miles Weiss and Susanne Walker left us wondering if Pimco is having second…Read More
The topic of netting for repo, securities lending and prime brokerage has been alternately praised and attacked in financial markets. Proponents argue that it strengthens risk management by encouraging safe,…Read More
US regulators propose margin rules on non-cleared derivatives. Did they give non-financial end users a pass or not?
The underlying agenda of the regulators is to get as much of the derivatives market on cleared platforms. But they recognize that it isn’t going to be possible to get…Read More
A new survey from SunGard and the Professional Risk Managers’ International Association, and conducted by NewOak, shows risk managers getting smarter about what they want from a collateral management technology…Read More
At the Fed’s Workshop on the Risks of Wholesale Funding on August 13th, there were presentations on repealing the repo safe harbor. This is an idea that has gotten some…Read More
An August 5, 2014 article in Reuters, “Unlikely booster for money market funds: beat-up Puerto Rico bonds” by Tim McLaughlin caught our attention. But it seems to be missing some…Read More
Thursday news roundup: defining liquidity, Moody’s, seclending CCPs, non-bank financial credit providers
Interesting news and articles from the last week that we haven’t gotten a chance to talk about elsewhere, including MiFID and liquidity, a suggestion that Moody’s has preferenced ratings of…Read More
TRS as the next financing tool? Reuters and the FT have the story and we have some conclusions (Finadium subscribers only)
A revealing article in the Financial Times last week, “Goldman to sell up to €10bn bonds with new swap,” by Tracy Alloway and Michael Mackenzie, discussed Goldman’s plans to get…Read More
Earlier this month there was an article in Bloomberg “Shadow Bank REITs Draw Regulator Scrutiny Over Financing” by Heather Perlberg and Jody Shenn. We had heard rumblings of REITs accessing cash from…Read More
Beneficial owners are in a tough spot with securities lending CCPs. For years they have thought that CCPs were unattractive – loss of counterparty control, uncertain operations and too much…Read More
OTC Derivatives Market Notional Tops $700 trillion. But Gross Credit Exposure — the number to watch — drops to $3 trillion.
The global derivatives market is undoubtedly large. In the BIS “Statistical release: OTC derivatives statistics at end-December 2013” (May, 2014) the total derivatives market, as of the end of December,…Read More
The procyclicality and margin debate is one of those topics that reads like a damned if you do, damned if you don’t. Earlier this month the Bank of England published an…Read More
A May 5th Wall Street Journal article, “Banks Revive Role in Complex Debt, Lenders Had Eschewed Loan-Bond Leverage Since Crisis, but New Rules Spur Them to Seek Buyers” by Katy…Read More
A look at the new ISDA Margin Survey: cash vs. securities and who is doing the collateral optimization
ISDA has just published their 2014 Margin Survey. There is plenty to look at and discuss. In this post, we focus on the use of cash as collateral and who…Read More
Securities Finance Monitor had the unusual opportunity to interview Winthrop H. Smith Jr, most recently author of “Catching Lightning in a Bottle.” Mr. Smith has a 28 year history at…Read More
Last week the SEC issued a 400 page proposed rule-making for CCP operations in the US – this is the US translation of CPSS-IOSCO’s Principles for Financial Market Infrastructure from…Read More
Tri-party equity repo jumps up 40% yoy as repo desks shift to more volatile collateral in search of P&L. But will the Fed look kindly?
There have been a couple articles recently about the tri-party fire sales and higher market share of equity tri-party repo. Lets connect some of the dots. Continue readingRead More
The Liberty Street Economics Blog takes a look at the funding crisis of 1763. Is it déjà vu all over again?
The Fed’s Liberty Street Economics blog had a thought provoking post the other day, “Crisis Chronicles: The Commercial Credit Crisis of 1763 and Today’s Tri-Party Repo Market“ by James Narron…Read More
Since 2010 the Senior Supervisors Group (SSG), a cousin to the Basel Committee and the Financial Stability Board comprised of regulators from large financial markets, has been collecting data on…Read More