ECB – Finadium

ECB, ETFs, Securities Lending, Total Return Swaps

ECB, ETFs, Securities Lending, topstory, Total Return Swaps

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…

The ECB’s Cœuré walks through ESTER: time is short to solve some tricky problems

October 18, 2018

Benchmarks, ECB, Europe, Interest rates, Regulatory

ECB, ESTER, topstory

The ECB’s Benoit Cœuré recently spoke about ESTER, the ECB’s new overnight rate. Benchmark reform is all the rage, and Europe, while initially setting itself some tough deadlines, is now…

How can central banks effectively monitor transmission of monetary policy?

August 8, 2018

Collateral, ECB, Liquidity Management

ECB, Liquidity, monetary policy, topstory

A new paper from the European Central Bank looks at the transmission of monetary policy and the concept of fragmentation, which means that monetary policy goals are not getting through…

The ECB swings a big stick on supervision of repo CCPs

July 19, 2018

CCP, ECB, Europe, Repo

CCP, Cover 2, ECB, topstory

We understand the impulse: if a CCP’s potential failure could cause severe damage to a region’s economy and monetary policy operations, then that region’s financial supervisors should want to have…

Central bank digital currencies keep getting a lot of attention at central banks. What’s going on here?

May 22, 2018

Cryptocurrency, ECB, Federal Reserve, Technology

Bank of England, blockchain, central bank digital currency, ECB, Federal Reserve, topstory

For all the times central bankers have said that they don’t plan to launch digital currencies any time soon, their staffs sure are paying a lot of attention to the…

No one is happy about US deregulation except these people (Premium)

April 24, 2018

Basel III, Dodd-Frank, ECB, Federal Reserve, Regulatory, US

Basel III, deregulation, Dodd-Frank, ECB, House, Senate, topstory, US

As US deregulation moves into gear, international regulators are voicing their deep concern with the breakdown of the attempted finalization of Basel III. Meanwhile, the US Congress pushes ahead while…

Man on a mission: the Bundesbank’s Andreas Dombret has a clear vision of Europe’s financial future

February 20, 2018

Basel III, ECB, Europe, Featured, Regulatory

Andreas Dombret, Basel III, Brexit, Bundesbank, globalization, topstory

The Bundesbank’s Dr. Andreas Dombret, responsible for banking, financial supervision and risk control, is presenting a vision of Europe’s financial future that should be heeded. We track some of his…

Finadium Survey: Better Regulation for Europe’s Securities Financing Transactions

February 14, 2018

Basel III, Collateral Management, ECB, Europe, Repo, Securities Lending

Basel III, Europe, Finadium, Leverage Ratio, Liquidity Coverage Ratio, Repo, securities financing transactions, Securities Lending, topstory

European regulation of Securities Financing Transactions (SFTs) is having its desired effect, which is a near gold standard of risk management. Unfortunately, it’s at the cost of market vibrancy. A…

How did US and European repo markets fare at the end of 2017? (Premium)

January 3, 2018

ECB, Europe, Repo, Tri-Party Repo, US

BNY Mellon, DTCC, ECB, Federal Reserve, GCF, Repo, RepoFundsRate, Reverse Repo Facility, topstory

US and European repo markets got a bit tetchy last week as the year closed but not as bad as 2016. We review the data and offer some observations. Continue…

Regulatory roundup: Powell confirmation, UK Financial Stability, BoJ on local bonds, ECB on unsecured rates and more (Premium)

November 30, 2017

Asia, Bank of England, Bank of Japan, ECB, Europe, Federal Reserve, Regulatory, US

Bank of England, Bank of Japan, ECB, Federal Reserve, LIBOR, Powell, Repo, Repo Clearing, topstory

It’s been a brisk week for interesting regulatory announcements and discussions. This edition of regulatory roundup highlights key points for collateralized trading, including thinking about the direction of the Federal…

A strange situation in Slovenia shows a threat to Central Bank independence

November 9, 2017

ECB, Europe, Federal Reserve

Banka Slovenije, Central Banks, independence, Slovenia, topstory

There’s some logic to the legal case, and a clear unconstitutionality, that the Central Bank of Slovenia, Banka Slovenije, should be liable to shareholders of banks that it took over…

CFTC Chief Giancarlo calls EU regulatory proposals “disruptive, expensive and detrimental” to the US

November 6, 2017

CFTC, ECB, Europe, Regulatory, US

CFTC, ECB, ESMA, European Union, Giancarlo, topstory, US

In the strongest words that we’ve seen used by a leading regulator in a long time, CFTC Chairman J. Christopher Giancarlo today roundly criticized EU plans to regulate non-EU financial…

Is the European repo market in recovery? The latest ICMA survey suggests some direction

October 18, 2017

ECB, Europe, Repo

Europe, ICMA, ICMA European Repo Council, Repo, topstory

The headlines look good: based on the ICMA ERCC’s June 2017 data collection, the European repo market grew 6.4% since December 2016 and 12.4% since June 2016 based on a…

An ECB Reverse Repo Facility is a painful idea, even if it may be necessary

October 3, 2017

ECB, Europe, Repo, RRP

ECB, Europe, ICMA, Reverse Repo Facility, topstory

ICMA’s Andy Hill was quoted by Global Investor as being in support of a Reverse Repo Facility (RRP) in Europe: “To the extent that regulation prevents banks from doing what…

Major global banks look to digital currency to speed cross-currency settlement

September 13, 2017

Blockchain, ECB, Federal Reserve, Fintech, Market infrastructure, Operations, Settlements, Technology

Barclays, blockchain, CIBC, Credit Suisse, FX, HSBC, MUFG, State Street, UBS, utility settlement coin

Late in 2015, UBS announced it was working on a blockchain-based digital currency for capital markets, called the utility settlement coin (USC). The USC would be used to facilitate settlement…

Finadium: Central Bank Tapering: Impacts for Liquidity and Collateral Markets

September 12, 2017

Bank of England, Bank of Japan, Collateral Management, ECB, Federal Reserve, Investments, Liquidity Management

Bank of England, Bank of Japan, Central Banks, European Central Bank, Federal Reserve, Finadium, tapering, topstory

Central bank tapering season is on the horizon: this means opportunities for price volatility, spread movements between products, and exchange rate fluctuations. It also means a potentially new set of…

Who should be counterparties to central banks? (Premium)

August 9, 2017

Credit Exposure, ECB, Federal Reserve

Central Banks, counterparties, European Central Bank, Federal Reserve, primary dealers, topstory

Central banks have shown two models for interacting with counterparties. In the Federal Reserve’s primary dealer system, there are a limited number of participants. On the other hand, the European…

Get ahead on key issues with Finadium research: an example from the BIS Annual Report

July 12, 2017

Bank for International Settlements, Funding/Liquidity, systemic risk, topstory

Cash management, Collateral Management, ECB, Europe, Liquidity Management, Market infrastructure, Money Market Funds, Pro-cyclicality, Regulatory, Repo, Risk Management, Systemic Risk

The Bank for International Settlements (BIS) released their 87th annual report on June 25th including an important section on risks in the US dollar funding market. The section outlines concerns…

ECB calls for completion of bank regulations, but which version?

March 15, 2017

Basel III, Dodd-Frank, ECB, Europe, US

Basel III, ECB, Sabine Lautenschläger, topstory

In a speech this week, a senior ECB official called for completion of bank regulations, citing both Basel III and European rules in process. This was a good speech and…

A new proposal for getting non-performing loans at European banks off of balance sheets

February 7, 2017

ECB, Europe, Investments, Securitization

bad bank, ECB, Europe, Non-performing loans, topstory

The ECB’s Vice President Vítor Constâncio made a lucid, coherent and altogether applaudable speech on the critical need to get non-performing loans (NPLs) off of European bank balance sheets. This…

European news roundup: Basel III, FTTs and Brexit (Premium)

September 1, 2016

Basel III, ECB, Europe, Tax

Basel III, Brexit, EU, Europe, FTT, topstory

We were pleased to see two points of sanity emerge from Europe this week. Both had the themes of scaling back regulatory overreach and seeking to strike a realistic balance between a…

Brexit reaction by Bank of England brings UK in closer alignment to Europe but not in a good way

August 11, 2016

Bank of England, ECB, Europe, Interest rates, Short Term Interest Rate Benchmarks

Bank of England, Brexit, ECB, European Central Bank, Quantitative Easing, topstory

On August 4th, the Bank of England (BoE) cut its key overnight rate by half to a new record low of 0.25%, lower even than directly in the wake of…

Bad debt at European banks a blink test of capital rules and the resolve of governments (Premium)

July 28, 2016

Basel III, ECB, Europe, Regulatory, Systemic Risk

bank capital, Basel capital rules, ECB, Europe, GSIB, topstory

Rising bad debt at European banks – particularly those in Portugal, Spain and Italy – has taken a prominent position in the spotlight in the wake of the Brexit vote. While…

ECB report shows more market instability as central bank policy is uncertain

January 18, 2016

ECB, Europe, Federal Reserve, Regulatory, Shadow Banking

ECB, Fed, monetary policy, Quantitative Easing, topstory

On January 13th, the European Central Bank (ECB) released its summary of their December 2-3rd debate over stimulus and rate direction. There remain calls for stronger and increasing stimulus by…

Rate games adding to the complexity in collateralized funding markets (Premium)

January 13, 2016

China, ECB, Federal Reserve, Interest rates, Repo, Short Term Interest Rate Benchmarks, Systemic Risk

China, Euro, fed rate hike, Fed Repo Facility, monetary policy, topstory

Now that the US Fed has uncorked the bottle with their first rate hike in several years, central banks around the world are starting to react in interesting ways. As…

Why the Leverage Ratio doesn’t reduce risk, it just moves it around (Premium Content)

November 30, 2015

Basel III, ECB, Regulatory, Risk Management

ECB, European Central Bank, Leverage Ratio, risk management, topstory

The value of the Leverage Ratio has been proclaimed as a non-risk based measure that is supposed to capture all on and off-balance sheet liabilities of a bank. Together with…

A European regional perspective on market reform and growth

September 14, 2015

Michael Cyrus

ECB, Europe, Featured, Investments

Deka, DekaBank, ECB, Europe, Regulation, systemic risk, topstory

In 2008, a global de-regulation super trend came to a grinding halt and gave rise to an era of financial repression. However, while financial innovation and financial repression are global…

Securities Finance Monitor Magazine Edition 1 is now online

We are pleased to announce the launch of Securities Finance Monitor Magazine. Hard copies were distributed at ISLA and to subscribers who completed their registration information. Download your free copy…

T2S launches today: our podcast series on T2S, collateral and liquidity with Clearstream

June 22, 2015

Collateral Management, ECB, Europe, Liquidity Management

Clearstream, ECB, T2S, topstory

Finadium and Clearstream have produced a series of podcasts on T2S, collateral and liquidity. Need to get smart about today’s launch of T2S and what it means for your collateral…

Event recaps: T2S, collateral and liquidity in Frankfurt, London and Paris (Premium Content)

June 8, 2015

Collateral Management, ECB, Europe, Market infrastructure

Clearstream, collateral, Liquidity, T2S, topstory

We’ve just returned from three European road shows with Clearstream discussing T2S, collateral and liquidity. These were extremely interesting – our synopsis and lessons learned are below. The meeting participants…

T2S, the ECB and Quantitative Easing

June 1, 2015

Collateral Management, ECB, Europe, Liquidity Management, Market infrastructure, Regulatory, Settlements

Clearstream, collateral, ECB, Liquidity, Quantitative Easing, Settlements, T2S, topstory

The European Central Bank’s recent Quantitative Easing (QE) program is putting a squeeze on European repo markets. QE takes securities out of the market. T2S will help repo by aggregating…

T2S, Equities and Collateral

May 27, 2015

Collateral Management, ECB, Europe, Liquidity Management, Market infrastructure, Settlements

Clearstream, collateral, Equities, Liquidity, Settlements, T2S, topstory

T2S opens many doors in the world of collateral and liquidity. At its simplest, financial intermediaries will soon be able to open up one account for settlement purposes and one…

T2S, Collateral and Business Model Change

May 26, 2015

Collateral Management, ECB, Europe, Liquidity Management, Market infrastructure, Settlements

Clearstream, collateral, Liquidity, Settlements, T2S, topstory

Despite a common currency, Eurozone securities do not have a single settlement system. That will soon be changing. TARGET2-Securities (T2S), the European Central Bank’s (ECB) settlement initiative, tackles the fragmented…

Finadium: T2S, Collateral and Liquidity: Building a Strategy for Growth

May 14, 2015

Collateral Management, Custodians, ECB, Europe, Liquidity Management

Agent Banks, collateral, Custodians, European Central Bank, Finadium, financial intermediaries, Liquidity, Payment Banks, T2S, topstory

Collateral and liquidity management under TARGET2-Securities (T2S) is an emerging work stream that requires attention from market participants. Settlement mechanisms under T2S are now generally understood, including how settlement will…

The European repo market is singing the QE blues.

April 22, 2015

ECB, Europe, Featured, Federal Reserve, LTRO, Repo, Uncategorized

European Repo Council, ICMA, QE, topstory

Some recent articles have highlighted illiquidity in the European repo markets, a result of the ECB’s QE program.Continue reading

A new LCR-compliant basket for European repo trading

March 2, 2015

Tobias Duchscherer

Basel III, Collateral Management, ECB, Europe, Repo

Basel III, ECB, Eurex repo, LCR, Repo, topstory

The European repo market is seeing the emergence of an LCR-compliant trading basket that takes the work out of conducting credit analysis on individual bonds, especially in light of national…

The ECB’s stress tests: what got stressed and what do the results mean?

October 28, 2014

ECB, Europe, Regulatory

European Central Bank, stress tests, topstory

You’ve seen the headlines by now: the European Central Bank’s stress tests showed 25 banks out of 130 with insufficient capital, and 12 of those have already raised further assets. The…

European rules on investment managers reporting securities financing to trade repositories — will they scare away lenders?

October 13, 2014

Custodians, ECB, Europe, Featured, Investments, Market infrastructure, Regulatory, Repo, Securities Lending, Trade Repositories

COO Connect, EBA, EIOPA, ESMA, ESRB, Securities Lending, topstory, Trade Repository

An excellent post in COO Connect “Regulation of repo and securities loan in Europe will increase the burden of reporting” (October 6, 2014) by Dominic Hobson caught our eye. He…

BIS calls for “Intense Review” of data on European deflation

September 25, 2014

Anna Vargo

ECB, Europe, Regulatory

BIS, Data, Draghi, ECB, financial stability, Regulation, topstory

In the opening remarks from a Sept 4th and 5th Bank for International Settlements conference, “Indicators to Support Monetary and Financial Stability Analysis: Data Sources and Statistical Methodologies”, BIS Deputy…

Two papers from the ECB on liquidity crunches and stress indices

September 2, 2014

ECB, Europe, Liquidity Management, Regulatory, Systemic Risk

ECB, financial regulation, Liquidity, stress tests

The European Central Bank released two working papers yesterday, each of which has something interesting to say about understanding financial markets. These papers add to the conversation of how regulators…

Qualifying Securitisations: a kinder, better SIV?

June 4, 2014

Bank of England, European Central Bank, securitisation, Securitization

Bank of England, Collateral Management, ECB, Securitization

A new discussion paper from the European Central Bank and the Bank of England, “The case for a better functioning securitisation market in the European Union,” has introduced the idea…

Some things we heard at the Finadium Conference

March 27, 2014

CCP, Credit Exposure, ECB, Featured, Primary Dealers, Regulatory, Repo, Securities Lending, Tri-Party Repo

CCPs, Central Counterparty, collateral shortage, Fannie Mae, Freddie Mac, HQLA, tri-party fire sale

Thank you to everyone at the Finadium Conference on Tuesday, March 25th. It was a great success with a record-breaking turnout. We would like to do a post on a…

Tuesday news roundup: modeling risk assets, illiquid collateral, EU money markets and CCP transparency

This edition of News Roundup covers some important issues in securities finance and regulation, including how banks model risk assets, posting illiquid collateral for bilateral trades, the ECB’s money market…

Evidence on whether the collateral transformation trade is slowly grinding to life (Finadium subscribers only)

October 30, 2013

Collateral Management, ECB, Federal Reserve, Liquidity Management, US

collateral transformation, Collateral upgrade, ECB, Euroclear, Federal Reserve, IOSCO, Newedge

Some recent news and comments point to indications of how far the collateral transformation trade has moved forward, and what look to be its prospects over the next year. Continue…

The Bank of England may have gotten into the collateral transformation business…will the Fed follow?

October 28, 2013

collateral transformation, FT

Bank of England, Basel III, CCP, Cleared Interest Rate Swaps, Collateral Management, Derivatives, ECB, Europe, Featured, Federal Reserve, LTRO, OTC Derivatives Clearing, Repo

Several news sources reported on last week’s speech by Mark Carney, the former Canadian central banker, now head of the Bank of England. Governor Carney spoke at a function celebrating…

ICMA's 25th Repo Survey is released, showing market growth. But the really interesting part is about Italian banks and CCPs.

September 19, 2013

CCP, Cleared Interest Rate Swaps, Derivatives, ECB, Europe, Featured, Regulatory, Repo

Cassa di Compensazione e Garanzia, CC&G, ICMA, IOER, LCH RepoClear

ICMA has released their 25th European Repo Survey, reflecting the market as of June 2013. It shows a larger market, driven by LTRO repayments and greater confidence. But it foreshadows…

Bloomberg article on the impact of regulatory reform for the repo market: is it cause and effect?

August 21, 2013

Collateral Management, Derivatives, Dodd-Frank, ECB, Europe, Featured, Federal Reserve, Hedge Funds, Investments, Liquidity Management, LTRO, OTC Derivatives Clearing, Regulatory, Repo

Finadium, LTRO, Quantitative Easing

An article in Bloomberg “Repo Market Decline Raises Alarm as Regulation Strains Debt” by Liz Capo McCormick & Anchalee Worrachate featured some interesting observations about how the regulatory environment is reducing liquidity.…

Benoît Cœuré on why low interest rates set the markets up for systemic fragility

July 4, 2013

Basel III, ECB, Europe, Featured, Pro-cyclicality, Regulatory, Repo, Systemic Risk

Benoît Cœuré, ECB