Europe

Europe, Repo, Securities Lending, Total Return Swaps

events, Finadium, Securities Lending, SFTR, topstory, Zurich

That was really interesting. We held our fifth annual securities lending and repo update yesterday in Zurich. Discussion centered on SFTR and the evolution of the securities finance business in…

Progress on Frankfurt as the next big banking hub

December 5, 2018

Collateral Management, Europe, Liquidity Management

Brexit, collateral, Frankfurt, Frankfurt Main Finance, topstory

Arguments are growing in favor of Frankfurt as a larger financial hub post-Brexit. A regional lobbyist is saying that 750 to 800 billion Euros in assets will transfer from London…

Europe readies for CRD-V (Premium)

November 14, 2018

Basel III, Europe, Regulatory

Basel III, CRD-V, Europe, Leverage Ratio, topstory

The European Parliament and the European Council are in discussions to amend the Capital Requirements Directive and Regulation rules (CRD-IV) to create CRD-V. This latest iteration recognizes recent Basel Committee…

Protectionist government policies and the impact on financial markets

October 31, 2018

Europe, US

financial markets, politics, stock market returns, topstory

As Brazil’s election this week shows, the trend towards electing governments that diverge from historical norms is not yet over, and protectionism and nationalism remain popular. We ask, what can…

Trends in European vs. US tri-party repo

October 24, 2018

Europe, Repo, Tri-Party Repo, US

Federal Reserve, ICMA, topstory, tri-party

The latest ICMA European repo market survey showed a sharp drop in the percentage of business going to tri-party, just 6% down from 12% in December 2016. There are several…

The Cum-Ex trade, CCPs, FTTs and other rough roads in European regulation (Premium)

October 22, 2018

CCP, Europe, Repo, Securities Lending

CFTC, Cum-ex, EMIR, ESMA, Germany, ICMA, topstory

Just when you thought things were settling down and European regulation was becoming predictable, a string of news suggests the opposite. The end of 2018 clear through into 2019 could…

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…

Several blows this week to London as a financial center post-Brexit (Premium)

October 11, 2018

CCP, Derivatives, Europe, Risk Management

back-to-back, Brexit, ECB, FT, ISDA, London, topstory

The odds for London thriving as a financial center post-Brexit got worse this week. Here’s what happened and where things seem to be going. Continue reading

The ECB on repo in the Leverage Ratio: taking a strong stand today may not turn out well tomorrow

October 8, 2018

Basel III, Europe, Regulatory

ECB, Leverage Ratio, Repo, topstory

The ECB’s publication last week of “The implications of removing repo assets from the leverage ratio” creates a conundrum. On the one hand, the findings stick true to the Basel…

Sanction backfire: a non-US payment system would change the balance of financial power

August 29, 2018

Europe, Regulatory, US

Germany, Payments, sanctions, Swift, topstory

The idea has been floated that Europe should create its own payments system so that European firms doing business with Iran could separate themselves from the US payment system. The…

European roundup: some weighty news for the end of July (Premium)

August 1, 2018

CCP, Cleared Interest Rate Swaps, Derivatives, ESMA, Europe, Securities Lending

Clearing, Deutsche Bank, Deutsche Borse, ESMA, Europe, FT, Securities Lending, topstory

As July wound down, European market participants released some important news items. We look at Euro clearing moving to Frankfurt, UCITS funds and collateral and the FT’s article on SFTR.…

The SFTR win for firms that don’t trade with European counterparties

July 26, 2018

Dodd-Frank, Europe, Regulatory

Dodd-Frank, Europe, SFTR, topstory

The Securities Financing Transaction Regulation (SFTR) will be global regulation by default as the majority of market participants trade with a European entity or subsidiary and hence are captured by…

More on handicapping the odds of a repo carve out for the US Leverage Ratio

July 25, 2018

Europe, Repo, SOFR

Europe, Federal Reserve, OFR, Regulatory, Repo, SOFR, topstory

At our Rates & Repo 2017 conference, we proposed taking bets on whether regulators would adopt the US Treasury’s recommendation of excluding Treasuries from the calculation of the Supplementary Leverage…

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…

SEC panelists: MiFID II not useful for credit markets yet and likely to get more complex (Premium)

July 18, 2018

Europe, Regulatory

credit, Fixed Income, MiFID II, sec, topstory

Speaking at the SEC Fixed Income Market Structure Advisory Committee on Monday, several panelists noted that while MiFID II has introduced a new innovation in pre-trade transparency, in practice this…

Market consolidation in derivatives and financing on both sides of the Atlantic (Premium)

July 11, 2018

Derivatives, Europe, Repo, US

consolidation, derivatives, Repo, topstory

Market consolidation of banks and dealers has been discussed for a while, but we’re now seeing some moves that make us think we are at the beginning of a significant…

One golden source data repository is necessary for smart regulation

July 9, 2018

Michael Cyrus

Big Data, Europe, Regulatory

Big Data, DekaBank, Europe, Michael Cyrus, Regulatory, smart regulation, topstory

When discussing data for regulatory reporting, the European Union currently suffers from a burdensome approach to reporting across multiple and often inconsistent regulations. A golden source of data for regulatory…

Electronic RFQ repo markets: The solution for reporting challenges and laying the building blocks for automation

July 5, 2018

Tom Trott

Automation, Europe, Repo

Europe, Repo, RFQ, topstory, Tradeweb

Challenges faced by the repo market including regulatory reporting requirements, reduced balance sheet and fewer resources, have all been well documented. Therefore it comes as no surprise that the use…

Regulatory reporting generates huge data sets, but what happens next?

June 28, 2018

Andrea Ferrise

Big Data, Europe, Regulatory, Technology, Trade Repositories

Big Data, collateral, LEI, Regulatory, topstory, Trade repositories, Unavista

The lure of big data to support regulatory oversight of risk, collateral chains and market behavior is strong, but regulators must be ready for big data analytics. This creates a…

The future of European securities lending: it’s still about people

June 25, 2018

Dan Copin

Europe, Securities Lending

CACEIS, Securities Lending, SFTR, topstory

The European securities lending market continues to go through profound change as regulation and competitive pressures push firms to streamline their operations. Whichever way the market turns, we must remember…

European and US repo markets are different, and that means one-size-fits-all-regulation is unwise

June 13, 2018

Europe, Market infrastructure, Re-Hypothecation, Regulatory, Repo, Systemic Risk, Tri-Party Repo, US

Europe, Repo, topstory, US

The US and European markets are not identical, although they are often made out to be just that. Besides macro differences, within Europe, transactions are subject to individual country laws,…

Finadium: Is Frankfurt the Next Collateral and Liquidity Hub?

May 15, 2018

Asia, Collateral, Collateral Management, Europe, Liquidity Management

Asian banks, collateral, Finadium, Frankfurt, Liquidity, topstory

A new Finadium research report looks at Frankfurt as a financial center and some key aspects that may determine its competitiveness and future relevance post-Brexit and beyond. Does it have…

FISL London is next week – here’s a status update

April 30, 2018

Europe, Finadium Event, FISL, Securities Lending

buy-side, FISL London, FISL London 2018, Securities Lending, topstory

We look forward to welcoming 140 buy-side attendees and sponsors to the Finadium Investors in Securities Lending (FISL) Conference in London next week, May 9-10. This is our second year…

SFTR reporting will cause trouble for the buy-side; delegated reporting could expose positions

April 19, 2018

Anna Reitman

Europe, Regulatory

ICMA, NEX, SFTR, topstory

NEX’s recently released report on the Securities Financing Transactions Regulation starts with an apt quote from an exhausted UK voter facing the 2017 election: “You’re joking! Not another one. Oh,…

When looking at bankers leaving London post-Brexit, it’s computers as much as headcount (Premium)

April 3, 2018

Collateral Management, Europe, Regulatory, Technology

Brexit, European Central Bank, headcount, London, topstory

We’ve been reading the numbers of bankers leaving Brexit (4,000 for Paris, 1,000 for Frankfurt) and something has seemed amiss. EU regulations require more than a token presence in order…

What to make of the Deutsche Borse/HQLAx announcement on blockchain for securities lending (Premium)

March 28, 2018

Blockchain, Europe, Repo, Securities Lending, Technology

Clearstream, Deutsche Borse, Eurex Clearing, Eurex repo, HQLAx, Securities Lending, topstory

Deutsche Börse Group and HQLAᵡ announced on Monday a partnership to build a new securities lending blockchain platform based on R3’s Corda technology. “The partners will build a fully integrated…

We review the new European repo market survey: overall growth but uneven progress

March 21, 2018

Europe, Repo, Tri-Party Repo

ERCC, Europe, ICMA, Repo, topstory, tri-party

The International Capital Market Association (ICMA) European Repo Market Survey for December 2017 was released last week. There was an encouraging amount of growth in the markets although it was…

The EU General Data Protection Regulation (GDPR) sets a new, extraterritorial standard for client data protection

March 13, 2018

Big Data, Europe, Technology

Europe, GDPR, topstory

In a now recurring story, the European Union has created regulation that effectively captures the majority of transactions around the world. It will require a broad range of new compliance…

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…

SFTR, Trade Data Repositories and Transparency: An Industry Challenge from the Inside Out

February 15, 2018

Mark Ellis

Europe, Regulatory, Trade Repositories

NEX, Regulatory, SFTR, topstory, Trade repositories

Regulators have made a call for substantial transparency in the form of the Securities Financing Transaction Regulation (SFTR). The data that must be delivered to trade repositories is comprehensive, patchily…

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…

The Changing Market Structure of Equity Repo Financing

February 5, 2018

Nik Todorovic

CCP, Credit Exposure, Europe, Operations, Repo

bilateral, CCP, counterparty credit, equity repo, Europe, ICMA, Nik Todorovic, SIX, STP, topstory

Equity repo is different from its more well-known cousin, government bond repo: the operations of the trade are the same but the collateral and the rationale for engagement can vary…

News Update: dividend taxes in Switzerland, the US and Germany; and what’s next for the Basel Committee (Premium)

January 30, 2018

Basel III, Europe, Regulatory, Tax, US

Basel Committee, Germany, Regulation, Switzerland, taxation, topstory, US

This week’s News Update is on taxation and regulation. There’s a lot going on in the world and the details matter. Here’s the latest from Switzerland, the US, Germany and…

MiFID II and Best Execution in SFTs: A Happy Ending After All?

January 29, 2018

Ian Beattie

Europe, Regulatory, Repo, Securities Lending

Europe, MiFID II, RTS 27 and 28, Securities Lending, SFTs, topstory

MiFID II went live on January 3, 2018, but that doesn’t seem to be the end of the story. Keeping with the European Commission’s theme of “regulate first, refine later,”…

SFM Magazine, Winter 2018, is now online

Securities Finance Monitor Magazine, Winter 2018, is now online. This edition, our Technology Special, features articles on what protectionism means for efficiency in global capital markets, a proposal for smart…

A Proposal for Smart Regulation in European SFT Markets

January 25, 2018

Michael Cyrus

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

Europe, LCR, Leverage Ratio, Michael Cyrus, NSFR, Regulation, SFT, SFTR, topstory

In a post-crisis era, Europeans must focus on efficient and smart regulation in Securities Financing Transactions (SFT) to support competitive financial markets. This can be achieved but requires regulatory attention…

Success stories this week in securities finance (Premium)

January 18, 2018

Basel III, Dodd-Frank, Europe, Repo, Securities Lending, US

Dodd-Frank, Germany, ICMA, ISLA, LCR, topstory

After what seems like years of difficult news, we would like to publicly recognize situations and groups of people that are moving the collateralized trading markets in the right direction.…

Do EU margin requirements on anti-procyclicality for CCPs help or hurt risk management?

January 15, 2018

CCP, Credit Exposure, Derivatives, ESMA, Europe, OTC Derivatives Clearing, Pro-cyclicality, Regulatory, Risk Management

CCPs, Clearing, ESMA, Procyclicality, topstory

EMIR wants CCPs to hold more margin, in effect making CCPs into virtual fortresses. But the costs associated are high and the potential to push risk into markets or firms…

Bank of England on hedge fund and PB risk: better than it used to be but issues remain

January 4, 2018

Bank of England, Credit Exposure, Europe, Hedge Funds, Investments, Prime Brokerage, Pro-cyclicality, Risk Management, Systemic Risk

Bank of England, hedge funds, Initial Margin, prime brokers, Procyclicality, topstory

A recent publication from the Bank of England shows that hedge fund systemic risk is generally lower than it used to be; that’s a good thing for the markets. Hedge…

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…

ESMA Q&A updates on benchmarks and indirect clearing on CCPs

December 18, 2017

CCP, ESMA, Europe, LIBOR

Benchmarks, CCPs, ESMA, indirect clearing, topstory

The European Securities and Markets Authority (ESMA) posted five updated Q&As on its website last week covering most of the major EU regulation. We highlight responses to questions on benchmarks…

Finadium’s Zurich 2017 seclending and repo event: summary and our presentation (Premium)

December 4, 2017

Europe, Repo, Securities Lending

Repo, Securities Lending, Switzerland, topstory, Zurich

Our great thanks to attendees, ZKB and SIX Securities Services for a successful Finadium event in Zurich last week. We discussed a range of important topics from a standardized Swiss…

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…

Is the FRTB on semi-permanent hold?

November 29, 2017

Basel III, Europe, Regulatory, US

European Union, FRTB, regulatory arbitrage, topstory

The Fundamental Review of the Trading Book (FRTB) – part of the big Basel III master plan on bank balance sheet, market risk and operational risk management – may be…

The EU’s proposals on CCP location open the door to staggering new risks

November 28, 2017

Bank of England, CCP, Central Counterparties, Derivatives, Europe

CCPs, European Commission, extraterritoriality, topstory

The European Commission’s proposals to force large CCPs to submit to supervision or even move to the EU may send some shivers down the neck of anyone trading via a…

CM2025: the physical market rebounds

It’s the year 2025. Following the passage of Dodd-Frank and related Basel III capital rules, banks did what they were supposed to do: they reduced Shadow Banking risk by cutting…

From Brussels to New York, our observations on Peer to Peer and European government regulation (Premium)

November 16, 2017

Collateral Management, Europe, Repo, Securities Lending, US

CFTC, collateral, Europe, peer to peer, Regulation, SBL, Securities Lending, topstory

Between the Euroclear collateral conference held in Brussels this Monday and Tuesday, plus our own conversations in New York, we’ve digested a lot of feedback on collateralized trading markets. Here…

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