collateral

Securitization

Basel capital rules, collateral, ESMA, LCR, PCS, SRT, STS, topstory

European Union securitization legislation was supposed to pave the way for a resurgence of the market. We speak with Ian Bell, head of PCS, about the state of the market…

We size the global collateral markets at $19.8 trillion (Premium)

January 7, 2020

CCP, Collateral Management, Derivatives, Repo, Securities Lending

collateral, OTC derivatives, Repo, Securities Lending, topstory

Finadium conducted a market sizing exercise of the global collateral markets, including a diversity of collateral product types held by private sector market participants. Here’s what we found. Continue reading

Is there offshore demand for Chinese bonds as collateral? (Premium)

November 14, 2019

China, Collateral Management, Fixed Income

Bonds, China, collateral, offshore, onshore, topstory

At ¥95.5 trillion (US$13.7 trillion), the Chinese bond market is big and growing. Chinese institutions would like to see Chinese bonds accepted as collateral offshore. The effort faces obstacles however.…

A pan-Asian collateral stablecoin? Why it may be worth taking seriously (Premium)

October 24, 2019

Asia, Blockchain, Collateral Management, Repo

Asia, blockchain, collateral, collateral baskets, Repo, stablecoins, tokens, topstory

We’re generally positive on blockchain-inspired solutions for collateral, securities lending and repo, but they’ve been slow to gain traction in part because existing platforms are also pretty efficient. In Asia…

BNY Mellon: signs point to wider adoption of ETF collateral

October 3, 2019

BNY Mellon, collateral, ETFs

The market for exchange-traded funds (ETFs) has skyrocketed over the past quarter-century, thanks to the trillions of dollars investors are put¬ting to work in passive, index-tracking strategies. What hasn’t yet…

SFM Magazine, Fall 2019, is now online

October 1, 2019

Big Data, Collateral Management, Common Domain Model, Repo, Securities Lending, SFTR, Technology

buy-side, collateral, Repo, securities finance, Securities Lending, SFTR, topstory, treasuries

Securities Finance Monitor Magazine, Fall 2019, is now online. This edition features articles on best execution in securities lending, electronic dealer and RFQ repo markets, the Common Domain Model in…

BofE working paper: Liquidity transformation, collateral assets and counterparties

September 27, 2019

Bank of England, collateral, Repo

Staff Working Paper No. 830 Liquidity transformation, collateral assets and counterparties Calebe de Roure and Nick McLaren We investigate how counterparties’ characteristics, and the collateral they use, interact with their…

Connected Data: The Opportunity for Collateral and Liquidity Optimization

September 12, 2019

Bimal Kadikar

Collateral Management, Operations, Technology

Big Data, Bimal Kadikar, collateral, collateral optimization, topstory, Transcend

The function and definition of collateral and liquidity optimization has continued to expand from its roots in the early 2000s. Practitioners must now consider the application of connected data on…

Moscow Exchange’s OTC derivatives market migrates to Unified Collateral Pool

July 30, 2019

collateral, MOEX, Moscow Exchange, OTC derivatives

MOEX’s Standartised OTC Derivatives Market migrated to the Unified Collateral Pool, allowing securities to be posted as collateral for trades on the market. The Unified Collateral Pool model delivers cross-market clearing…

An opportunity for market-led reform in equity-for-equity collateral exchanges

July 18, 2019

Oscar Huettner

Collateral Management, Repo

15c3-3, collateral, DEGC, DTCC-Euroclear GlobalCollateral, Equity for Equity, Repo, topstory

Regulatory changes put in place following the financial crisis of 2008 have broadly reshaped the US repo market but few reforms outside of the Intermediate Holding Company requirement have impacted…

Bloomberg: Democrats Back Wall Street Push to Free Up $40 Billion in Margin

June 28, 2019

affiliates, Bloomberg, collateral, Margin, US Democrats

A group of House Democrats is pressing bank regulators to roll back a rule that forces the biggest Wall Street firms to set aside as much as $40 billion as…

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…

ECB paper: Does liquidity regulation impede the liquidity profile of collateral?

March 28, 2019

collateral, ECB, LCR

Kirsten Schmidt Working Paper Series No 2256 / March 2019 We analyze the pledging behavior of Euro area banks during the introduction of the liquidity coverage ratio (LCR). The LCR…

Finadium: Scenarios for a Cyber Collateral Attack

March 26, 2019

Collateral Management, Technology

collateral, cyberattack, Finadium, topstory

Both the financial services industry and corporations everywhere have faced an increase in cyberattacks in recent years, by both state-led and individual actors. This report focuses on how an attack…

Transparency requirements of EU Securitisation Regulation to be incorporated into Eurosystem collateral framework

March 24, 2019

collateral, ECB, securitisations

Eligibility requirements for loan-level data reporting in collateral framework to be adjusted to reflect EU Securitisation Regulation’s disclosure requirements Eligibility criteria for asset-backed securities to change at a future date,…

ECB Working Paper: Money markets, collateral and monetary policy

February 15, 2019

collateral, ECB, Money Markets

Money markets, collateral and monetary policy ECB Working Paper Series Fiorella De Fiore, Marie Hoerova, Harald Uhlig Interbank money markets have been subject to substantial impairments in the recent decade,…

BofE Working Paper: To ask or not to ask: collateral vs screening in lending relationships

February 1, 2019

Bank of England, collateral

We study the impact of higher capital requirements on banks’ decisions to grant collateralized rather than uncollateralized loans. We exploit the 2011 EBA capital exercise, a quasi-natural experiment that required…

ECB’s Yves Mersch: The possible triangle – frictionless movement of payments, securities and collateral across Europe

January 31, 2019

collateral, ECB, ICMA

Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the 2019 Annual General Meeting of the International Capital Markets Association’s European Repo and…

Shanghai Stock Exchange Releases Notice On Collateralized Repo Of Shares

January 30, 2019

collateral, equity repo, Shanghai Stock Exchange

To implement relevant requirements on preventing and defusing the shares collateral risks of listed companies given by the Financial Stability and Development Committee under the State Council and encourage and…

Review: RMA and EquiLend’s LatAm guide

January 30, 2019

Collateral Management, Securities Lending

collateral, Equilend, Latin America, Repo, RMA, Securities Lending, topstory

RMA and EquiLend have produced a new report on the Latin American securities lending market, “Latin American Securities Finance User Guide 2019.” There’s a lot to appreciate in this piece…

Review of the second annual Asian Prime Collateral Forum

January 24, 2019

Asia, Collateral Management

Asian Prime Collateral Forum, collateral, Fixed Income, Repo, topstory

We applaud the efforts of the Asian Prime Collateral Forum to popularize the idea of collateral as an important building block for Asia’s capital markets. The second annual Forum was…

BoE Consultation Paper: Credit risk mitigation: Eligibility of financial collateral

January 10, 2019

Bank of England, collateral, credit risk mitigation

Overview In this Consultation Paper (CP), the Prudential Regulation Authority (PRA) sets out its proposed changes to Supervisory Statement (SS) 17/13 ‘Credit risk mitigation’ to clarify expectations regarding the eligibility of…

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…

ECB working paper: Re-use of collateral: leverage, volatility, and welfare

December 21, 2018

collateral, ECB, re-use

We assess the quantitative implications of collateral re-use on leverage, volatility, and wel- fare within an infinite-horizon asset-pricing model with heterogeneous agents. In our model, the ability of agents to…

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…

IFLR: Initial margin prompts shift to unconventional collateral

November 27, 2018

collateral, IFLR, uncleared margin

Phase four and five firms are moving away from standard forms of eligible collateral under the uncleared margin rules (UMR), but sources warn that this will lead to delays due…

The US SA-CCR proposal on collateral: generally speaking, good news for the markets (Premium)

November 1, 2018

Collateral Management, Regulatory, US

collateral, SA-CCR, topstory, US regulators

Collateral Management, Regulatory, Securities Lending

US regulators have issued a Notice of Proposed Rulemaking (NPR) for the Standardized Approach for measuring counterparty credit risk” (SA-CCR) in derivatives contracts. This long-awaited proposal shows that US regulators…

Regulatory Changes and the Need for Collateral Flexibility

September 27, 2018

Glenn Horner

collateral, non-cash, Regulation, Securities Lending, State Street, topstory

Since the financial crisis regulatory changes and market dynamics have led to an increased usage of non-cash collateral for securities lending transactions. This trend is most dramatic in the U.S., which…

Direct Clearing: A New Competitive Differentiator for the Buy-side

September 11, 2018

Frank Odendall

CCP, Collateral Management, Credit Exposure, Uncategorized

CCP, collateral, Direct Clearing, Eurex, Margin, topstory

The introduction of buy-side direct clearing for central counterparties (CCPs) has created buy-side opportunities while raising new considerations about business models, risk and reward. Whether and how to engage, for…

US Treasury fintech report: four impacts to securities finance

August 2, 2018

Artificial Intelligence, Big Data, Collateral Management, Credit Exposure, Regulatory, US

collateral, fintech, technology, topstory, US Treasury

The US Treasury issued the fourth report in their series, “A Financial System That Creates Economic Opportunities”; this one focuses on Fintech. Some of the recommendations speak to matters that…

Finadium Big Ideas Quarterly Q3 2018 now online

August 1, 2018

Collateral Management, Repo

collateral, Finadium, Repo, topstory

Our quarterly presentation on research, news and events. Finadium Securities Finance, Collateral and Derivatives subscription clients can log in and download the presentation here. If you are already logged in,…

US Treasury Markets Practice Group sees clearing and IDB risks in the US Treasury secondary market

July 16, 2018

Collateral Management, Investments, Market infrastructure, US

Clearing, collateral, settlement, TMPG, topstory, US Treasuries

The US Treasury Markets Practice Group (TMPG), hosted by the New York Fed, has issued a comprehensive paper on the US Treasury (UST) secondary market. In last week’s “White Paper…

Northern Trust Develops Enhanced Collateral Optimization Solution

July 13, 2018

Alex Tonhazy

collateral, Northern Trust

Northern Trust (Nasdaq: NTRS) has developed an enhanced collateral optimization solution designed to help institutional investors manage their collateral more efficiently whilst meeting the demands of continuing global regulatory reform.…

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…

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…

Nasdaq leads team for margin and collateral on the blockchain

June 19, 2018

News and Notes, News and Notes – Fintech

ABN Amro Clearing Bank, blockchain, collateral, DLT, EuroCCP, Euroclear, Margin, Nasdaq

ABN AMRO Clearing, EuroCCP, Euroclear and Nasdaq have completed a joint proof of concept to make the use of securities more efficient when used to cover margin calls, including after…

Nigeria’s central bank orders ₦1bn collateral cushion for OTC settlement

June 2, 2018

collateral, Nigeria, OTC derivatives clearing

The Central Bank of Nigeria (CBN) has ordered that Deposit Money Banks (DMBs) must keep at least ₦1 billion (USD$2.8 million) collateral in form of government or CBN securities for…

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…

Bloomberg: Japanese tech fund uses Alibaba shares for collateral on $8bn margin loan

April 7, 2018

News and Notes, News and Notes – Fintech

Alibaba, collateral, Softbank

SoftBank Group, the Japanese technology giant, used its stake in online retailer Alibaba Group as collateral for an $8 billion loan from a group of banks in what is one of…

ECB publishes new guidelines on haircuts, collateral, and Eurosystem monetary policy implementation

February 9, 2018

News and Notes, Uncategorized

collateral, ECB, Haircuts

The European Central Bank (ECB) has published three new guidelines on: implementation of the Eurosystem monetary policy; valuation haircuts; and additional temporary measures relating to Eurosystem refinancing operations and eligibility…

FT: stock lending by ETF operators worries investors

February 5, 2018

collateral, ETFs, Securities Lending

Investors are concerned about loaning out stocks, arguing the income generated by securities lending is unlikely to offset the risks, especially in market downturns. One concern for investors is the…

Blockchain loan platform SALT collateralizes digital tokens for cash

December 21, 2017

News and Notes – Fintech

blockchain, collateral, DLT, SALT, WAX

Worldwide Asset eXchange (WAX) will use blockchain-backed loan platform SALT (Secured Automated Lending Technology) to allow token holders to use WAX as collateral for cash loans. WAX token holders will…

ECB announces changes to collateral eligibility criteria for unsecured bank bonds

December 15, 2017

New eligibility criteria for senior unsecured bank bonds were decided and are expected to come into effect in the first quarter of 2018 Currently, eligible senior unsecured bank bonds that…

OneClearstream collateral management service launches

November 16, 2017

Clearstream, collateral, OneCMS, T2S

Clearstream’s new service enabling mutual customers of Clearstream Banking Luxembourg and Clearstream Banking Frankfurt to automatically mobilize assets across both ICSD and CSD for triparty collateral management is now live.…

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…

Collateral scarcity premia in euro area repo markets

October 27, 2017

News and Notes, Uncategorized

collateral, EU, premia

Using bond-level data from both repo and securities lending markets, this paper introduces a new measure of collateral reuse and studies the drivers of the cost of obtaining high-quality collateral, i.e.…

SIX: survey on uncollateralized OTC derivative transactions

October 16, 2017

collateral, Non-Cleared OTC Derivatives, SIX Securities Services

Industry wide European research from SIX Securities Services today reveals the statistic that more than 8 in 10 (85%) financial institutions believe that up to 40% of all OTC derivative…

Finadium Big Ideas Quarterly Q3 2017 now online

August 1, 2017

Collateral Management, Derivatives, Repo, Securities Lending

collateral, derivatives, Finadium, Repo, Securities Lending, technology, topstory

Our quarterly presentation on research, news and events. Finadium research clients can log in and download the presentation here

Finadium’s strategic plan for 2017-2018

July 27, 2017

Derivatives, Fintech, Fixed Income, Repo, Securities Lending, Technology

collateral, derivatives, Finadium, fintech, Fixed Income, securities finance, topstory