Liquidity Management

Liquidity Management, US

dollar liquidity, reserve currency, topstory, US

American’s economic competitors are seeing dollar liquidity stress this month as a sign to evaluate their plans: should they continue to rely on the dollar as their reserve and trading…

Tracking US repo stress as part of dollar funding demand (Premium)

March 18, 2020

Liquidity Management, Repo

dollar liquidity, topstory, US repo

A global dollar liquidity crisis is the boogeyman in the closet of global systemic risk concerns. As the coronavirus exposes cracks in the system, we look at reporting and data…

Federal Reserve cuts rates and six central banks thunder in with dollar liquidity

March 15, 2020

Interest rates, Liquidity Management, Regulatory

Central Banks, Discount Window, dollar liquidity, Federal Reserve, interest rates, topstory

In the biggest liquidity injection since the 2008 Global Financial Crisis, six central banks announced today coordinated action to provide immense liquidity to US Treasury and dollar liquidity swap markets.…

Should the Fed skip the small talk and become a quasi-primary dealer?

November 4, 2019

Federal Reserve, Liquidity Management, Repo, US

Federal Reserve, primary dealers, Repo, topstory, US Treasuries

The Federal Reserve’s intervention in recent US repo market activity suggests that it alone has the ability and resources to maintain orderly markets in the face of liquidity rules and…

US bank balance sheets show capacity – at what point would policymakers react?

June 5, 2019

cleared repo, Liquidity Management, Repo, US

bank balance sheets, financial risk, Repo, topstory

Multiple data points indicate that US banks have balance sheet capacity to go around, from what’s happening in the repo market to indicators of collateral velocity. Further increases could create…

New paper from Fed researchers finds concrete link between securities lending, trade volumes and price discovery

May 20, 2019

Corporate Bonds, Federal Reserve, Liquidity Management, Securities Lending

Corporate Bonds, Federal Reserve, insurance companies, Securities Lending, topstory

“We provide compelling evidence that the corporate bonds held by more risk tolerant insurance companies with securities lending programs tend to have greater spot market trade volume and more price…

In five years, 90% of funding will be done by machines

April 25, 2019

Bimal Kadikar

Big Data, Collateral Management, Liquidity Management, Technology, Uncategorized

Big Data, Bimal Kadikar, collateral, connected data, Liquidity, technology, topstory, Transcend

You may disagree with the number of years or the percent, but everyone understands that automation in the funding and collateral space is occurring at a fast pace. The question…

Thursday news roundup: SOFR end of March, Modern Monetary Theory, Brexit liquidity risk (Premium)

April 4, 2019

Bank of England, Liquidity Management, Regulatory, SOFR, UK

Brexit, Modern Monetary Theory, SOFR, topstory

There’s been a lot of news this week that deserves a mention, and one piece of non-news. This Thursday roundup covers big recent events that we haven’t mentioned elsewhere. Continue…

UC Berkeley and the Chicago Fed on securities finance conditions, asset prices and liquidity

January 23, 2019

Liquidity Management, Regulatory

asset prices, Chicago Fed, Liquidity, Regulation, securities finance, topstory, UC Berkeley

A recent academic paper from Tomas Breach of UC Berkeley and Thomas B. King of the Chicago Fed looked at the relationship between bilateral securities financing activities, asset prices and…

Finadium: European Delta One Trader Survey

January 22, 2019

Delta One, Europe, Liquidity Management, Securities Lending

Delta One, Europe, Finadium, listed derivatives, securities finance, topstory

The Delta One business is a type of market making for liquidity and risk management clients that seek economic exposure of a security without the complexity of carrying the underlyings.…

Could Chinese banks become an important liquidity source for Western banks? (Premium)

January 9, 2019

China, Collateral Management, Liquidity Management

Bank of China, China, collateral, ICBC, Liquidity, topstory

In recent conversations on Delta One trading for an upcoming report, we heard the idea that Chinese banks could become an important future liquidity source for Western banks. The logic…

A European challenge to the dollar highlights the breakdown of the Bretton Woods order

December 10, 2018

Europe, Liquidity Management, US

Bretton Woods, dollar, Euro, Liquidity, topstory

Most Americans don’t understand the immense benefit they receive from the dollar as the world’s reserve currency, nor the fact that this global choice is the result of the US-led…

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…

Fed survey sharpens understanding of banks and IOER

December 4, 2018

Federal Reserve, Liquidity Management, Repo

Federal Reserve, IOER, Repo, topstory

A new survey from the Federal Reserve of Senior Financial Officers shines light on why banks use Interest on Excess Reserves (IOER), and what options they might choose if their…

Finadium launches new event in Frankfurt, The Business of Collateral Trading, for February 2019

November 19, 2018

Collateral Management, Liquidity Management

Business of Collateral Trading, Finadium, Frankfurt, topstory

Finadium is announcing a new event launch, The Business of Collateral Trading, 21 February 2019 in Frankfurt. This event is the result of our in-depth research and consulting activities in Europe…

Will the need for scale plus CCLF mean US repo dealer consolidation? (Premium)

November 6, 2018

CCP, Liquidity Management, Repo

CCLF, CCPs, dealers, FICC, PFMI, Rates & Repo 2018, Repo, topstory

At our Rates & Repo 2018 conference, the Capped Contingency Liquidity Facility (CCLF) was a hot topic. Maybe too hot. We’re seeing a potential driver for market consolidation. Continue reading

The SEC’s proposed ETF rules help ETF market makers but hurt securities lenders (Premium)

October 1, 2018

Liquidity Management, Operations, Securities Lending

ETFs, market makers, sec, Securities Lending, topstory

A new proposed regulation from the US Securities and Exchange Commission (SEC) will make the ETF market more efficient while predictably creating new winners and losers, in this case market…

Envisioning the next evolution of the securities finance industry

September 18, 2018

Rajen Sheth

Big Data, Collateral Management, Liquidity Management, Securities Lending, Technology

Big Data, Pirum, securities finance, technology, topstory

Regulations and balance sheet management have combined to create the greatest level of disruption that the industry has seen since 2008, but this time the changes are likely to be…

Should the US care if global markets move away from dollars for transactions?

August 27, 2018

Investments, Liquidity Management

Liquidity, reserve currency, tariffs, topstory, US dollar

The US dollar is the global reserve currency. According to the Fed, there are $1.62 trillion in Federal Reserve notes outstanding, what we consider as cash, much of which is…

How can central banks effectively monitor transmission of monetary policy?

August 8, 2018

Collateral Management, 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…

Finadium announces H2 2018 event calendar for New York, London and Zurich

July 11, 2018

Collateral Management, Liquidity Management, Repo, Technology

collateral, Finadium events, Liquidity, Repo, Securities Lending, technology, topstory

Finadium will enter the fall months with a robust slate of events on technology, collateral, repo and securities lending. Here’s our upcoming calendar of events in New York, London and…

Treasury issuances and Fed rates are changing technicals in the short end (Premium)

June 20, 2018

Cash management, Federal Reserve, Fixed Income, Interest rates, Investments, Liquidity Management, Money Market Funds, Repo, Short Term Interest Rate Benchmarks, SOFR, US

Fed Funds, Repo, SOFR, topstory, US, US Treasury

As the US Treasury moves to add even more to short dated securities to fill their deficit hole, while at the same time the Fed raises rates and slowly unwinds…

Finadium: Is Frankfurt the Next Collateral and Liquidity Hub?

May 15, 2018

Asia, 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…

Can Fixed Income ETF liquidity hold up against underlying liquidity changes? Panel respondents say yes

April 26, 2018

Anna Reitman

ETFs, Fixed Income, Liquidity Management

ETFs, Fixed Income, Liquidity, topstory

The Fixed Income ETF marketplace is undergoing scrutiny as liquidity gravitates to these products and away from the underlying. The fact is, ETFs are easier to trade than individual fixed…

Fed’s Randal Quarles outlines face of banking regulation to come while the Fed issues a new SLR proposal

April 12, 2018

Basel III, Dodd-Frank, Federal Reserve, Liquidity Management, Regulatory, Systemic Risk, Uncategorized

Federal Reserve, Leverage Ratio Volcker Rule, Randal Quarles, TLAC, topstory

Randal Quarles, Vice Chairman for Supervision at the Federal Reserve spoke last month at the American Bar Association Banking Law Annual Meeting. The speech, “Early Observations on Improving the Effectiveness of…

The Basel Committee works to figure out sovereign risk on bank balance sheets

December 20, 2017

Basel III, Liquidity Management, Risk Management

Basel Committee, sovereign risk, topstory

Sovereign risk has proven to be a double edged sword. How much risk is there really, and should sovereign debt be included at face value in the Leverage Ratio? Or…

We’re not much worried about US tax reform’s impact on repo, but non-tri-party, non-DvP repo participants should stay alert

December 19, 2017

Liquidity Management, Regulatory, Repo, Tax, US

DTCC, DvP, Liquidity, Repo, SOFR, topstory, US tax reform

As everyone connected to the Internet or paper media knows, the US is close to passing a massive tax reform package that offers some of the most substantial changes since…

Our analysis of IOSCO’s latest hedge fund survey (Premium)

November 27, 2017

Hedge Funds, IOSCO, Liquidity Management

hedge funds, IOSCO, Leverage, topstory

IOSCO released their 2016 data analysis of hedge fund assets, leverage and liquidity. While this document always feels a bit dated compared to current markets, it also has some kernels…

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…

Interfund lending: are repos the right way to get this done?

November 20, 2017

Liquidity Management, Repo

Barron's, interfund lending, Liquidity, Repo, sec, topstory

An article in the November 11, 2017 Barron’s discussed the idea of interfund lending. In “When Funds Lend to One Another,” the author notes that “interfund lending by fund companies…

Finadium: European Prime Brokerage Survey: Customers, Capital and Business Models

November 15, 2017

Basel III, Liquidity Management, Prime Brokerage

Europe, Finadium, Prime Brokerage, topstory

This Finadium research report is a survey of European prime brokers’ thinking towards capital and clients. We investigate how much prime brokers are aware of their balance sheet requirements and…

Why you should care about off-the-run US Treasury trading platforms

November 15, 2017

Collateral Management, Liquidity Management, US

Liquidity, LiquidityEdge, off-the-runs, OpenDoor, topstory, US Treasuries

Two press releases last week highlight the importance of liquidity in off-the-run US Treasuries. As the battle of the platforms is heating up, the winners will be holders of off-the-runs…

Are carve-outs in national versions of the Leverage Ratio a good idea?

November 8, 2017

Basel III, Liquidity Management, Regulatory

carve-outs, Leverage Ratio, SLR, topstory

There has been discussion in recent months about the possibility of large carve-outs in the US Supplementary Leverage Ratio; this follows years of carve-outs in the European version of Basel…

Debating solutions to the US Supplementary Leverage Ratio problem (Premium)

November 1, 2017

Basel III, Derivatives, Liquidity Management, US

SLR, Supplementary Leverage Ratio, topstory, US, US Treasury

The US Supplementary Leverage Ratio (SLR) isn’t working very well, that much we know. As a non-risk based measurement of risk, it captures every asset with the same risk weighting…

An activities-based approach to regulation from the US Treasury report on asset managers and insurance companies (Premium)

October 31, 2017

Derivatives, Dodd-Frank, Investments, Liquidity Management, Regulatory, SEC, US

asset managers, derivatives, Dodd-Frank, insurance companies, Liquidity, topstory, US Treasury

The US Treasury has released its third major report on core principles for financial markets. The first two covered capital markets and banks; the latest is on asset managers and…

Our slides from the Oct 3 London event, “Market Competition, Europe and US regulations” (Premium)

October 4, 2017

Bank of England, Bank of Japan, Basel III, Europe, Liquidity Management, Regulatory, Repo, Risk Management, Securities Lending, US

Europe, Finadium, London, Regulation, tapering, topstory, US

Thanks to our clients who attended our event in London this week on market regulations and their impact on competition between the US and Europe. Our slides are available for…

Credit Suisse’s Zoltan Pozsar on sterilization, repo and FX Swaps (Premium)

September 25, 2017

Cash management, Collateral Management, Federal Reserve, FX, Liquidity Management, Repo

Credit Suisse, FX Swaps, Liquidity, Repo, sterilization, topstory, Zoltan Pozsar

Credit Suisse’s Zoltan Pozsar has written a master class on how money flows in today’s financial markets. It’s on the complicated side and you might need to read this article…

Finadium: Can ETFs Replace Cash Accounts?

September 20, 2017

Cash management, ETFs, Investments, Liquidity Management, US

cash management, ETFs, Liquidity Management, topstory, ultra short

A new research report from Finadium looks at the range of ultra short ETFs, some of which are competing with traditional cash accounts for investor interest. This report should be…

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…

The SEC report on liquidity and regulations: its a complex story, not a done deal

August 15, 2017

Investments, Liquidity Management, Regulatory, SEC, US

Liquidity, sec, topstory, US Treasuries, Volcker Rule

The headlines say that the SEC reports little damage to liquidity from regulations, and this is going to influence both government and public opinion going forward. But the SEC measured…

What’s the real risk of CCPs, counterparty risk or liquidity risk?

August 7, 2017

CCP, Liquidity Management, Risk Management

CCP, default risk, liquidity risk, Margin, risk waterfall, topstory

A recently issued academic paper from Dr. Rama Cont at Imperial College London makes the argument that CCPs don’t mitigate counterparty credit risk, they just transform it into liquidity risk.…

TLAC bond requirements get tougher – will investors still want them?

August 1, 2017

Basel III, Corporate Bonds, Europe, Liquidity Management, Regulatory, Risk Management, Systemic Risk, unsecured funding

Bonds, Funding/Liquidity, regulatory capital, TLAC, topstory

Total Loss Absorbing Capital (TLAC) is a core element of the Basel regulatory capital regime, which sets minimum liquidity reserve standards for banks. Banks are now issuing qualifying debt instruments…

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…

Are the buy side and sell side on the same page about the direction of prime brokerage?

July 3, 2017

Hedge Funds, Investments, Liquidity Management, Prime Brokerage, US

BNY Mellon, buy-side, Finadium, financing, hedge funds, Liquidity, Prime Brokerage, topstory

BNY Mellon released the results of a buy-side survey on liquidity and financing on June 26th. How closely do the concerns and attitudes of investors towards their liquidity and financing…

Finadium: Scenarios for the Next Collateral Crisis – download a free excerpt

May 4, 2017

CCP, Collateral Management, Derivatives, Investments, Liquidity Management, Market infrastructure, Regulatory, Repo, Technology

CCPs, Central Banks, collateral management, dealers, Regulatory, Repo, technology, topstory

A new research report from Finadium looks at scenarios for a full-blown collateral crisis that could arise over the next two years. These scenarios are all based on real-world situations…

How much should government be involved in the securities financing markets? (Premium)

April 26, 2017

Basel III, Liquidity Management, Regulatory, Repo, Securities Lending

BIS, government, Liquidity, market failure, Regulation, Repo, securities finance, Securities Lending, topstory

Pick one: governments, in particular Central Banks, should be A) heavily and permanently involved in financing; B) only be involved in an emergency; or C) never be involved. Regulators seem…

Under bank capital rules a reduction in US Federal deficit would spell serious trouble

October 17, 2016

Collateral Management, Dodd-Frank, Federal Reserve, Liquidity Management, Market infrastructure, Money Market Funds, Regulatory, Repo, Systemic Risk, US

Federal deficit, Federal Reserve, Liquidity, systemic risk, topstory, US Treasuries

The US Federal deficit has been an absent topic in recent Presidential debates and skirmishes. Certainly it is less enticing to the general populace than the latest scandals and accusations.…

The collateral consequences of Brexit (Premium)

June 24, 2016

Collateral Management, Europe, Liquidity Management, Regulatory

bank capital, Brexit, collateral, ratings, topstory

The UK’s historic vote to leave the European Union has sent shock waves throughout financial markets. On Friday, the pound started the day down 9%, share prices were down 16%…

An interview with Bimal Kadikar, CEO of Transcend Street Solutions

May 16, 2016