collateral

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

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, 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, 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, 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, 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

Financial markets are changing at a rapid pace; from front to back office and across products, anyone can see that today’s markets are not what they were 10 years ago.…

Finadium: Survey of Leading Asset Managers on Securities Lending

July 12, 2017

Collateral Management, Investments, Securities Lending

asset managers, collateral, Finadium, Securities Lending, Survey, topstory

This report presents the results of Finadium’s tenth annual survey of asset managers in securities lending. The report is a guide to best practices, a peer review and a forward-looking…

International Banker: Collateral is central bank policy’s secret sauce

July 11, 2017

Central Banks, collateral, monetary policy

Modern economies run on the back of a monetary and financial system through which most transactions ultimately settle in central bank money. As the ultimate issuers of money, central banks…

BNY Mellon Research Finds Collateral Pressures Impacting Most Buy-Side Institutions

June 26, 2017

BNY Mellon, collateral, Liquidity, PwC

The global buy-side community finds itself under intense liquidity and funding pressures in 2017. Across the world, financial institutions face new mandates to collateralize OTC derivatives trades, requiring them to…

The Five Cs of Bank and Client Success in Securities Finance

June 15, 2017

Anand Krishnan

Basel III, Cash management, Central Counterparties, Collateral Management, Derivatives, Hedge Funds, Investments, Repo

ALM, CCPs, collateral, Natixis, Repo, topstory

Today’s global investment banking market continues to be shaped by the need for innovation and synergies driven by an evolving regulatory landscape. We have identified the Five Cs for success…

Collateral Opportunities for Investors

May 30, 2017

Collateral Management, Investments, Repo, Securities Lending, Uncategorized

Beneficial Owners, BNPP, collateral, Repo, Securities Lending, topstory

A combination of legislative reform, geopolitical events and uncertainty as to the pace of US monetary policy tightening has created a disconnect in the financial markets, creating substantial opportunities for…

The business case for tri-party repo flexibility

May 16, 2017

Collateral Management, Europe, Market infrastructure, Repo, Tri-Party Repo, US

collateral, DTCC-Euroclear Global Collateral Ltd, IMS, Inventory Management Service, Repo, topstory, tri-party, tri-party repo, US

Building on our conversations with dealers on what DTCC-Euroclear Global Collateral Ltd’s Inventory Management Service (IMS) could offer them, we looked further at the business rationale for why US market…

Reuters: LME clearing house says interest growing to use metal as margin collateral

May 12, 2017

collateral, LME, metal

The head of the clearing house for the London Metal Exchange on Wednesday said interest was growing from major commodity financing banks to use metal as collateral for margins. Clearing…

EU relaxes derivatives rules – smart economic policy or a reaction to global competition?

May 8, 2017

Central Counterparties, Collateral Management, Derivatives, EMIR, Europe, Investments

CCPs, Clearing, collateral, derivatives, EMIR, Europe, topstory

The European Union last week proposed simpler and more efficient derivatives rules, a move that is widely accepted as helpful for a wide range of corporations, pensions and smaller banks.…

Finadium Big Ideas Quarterly Q2 2017 now online

May 1, 2017

Market infrastructure, Repo, Securities Lending, Technology

collateral, Indemnification, Repo, Securities Lending, technology, topstory

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

FISL in London: flexibility the name of the revenue game

April 27, 2017

Events, Finadium Event, Profitability, topstory

collateral, Indemnification, Regulations, revenues, RWA, topstory

Regulation, the macro market environment, and new ways of doing business were the topics of a panel scrutinizing the changing dynamics in securities lending markets at Finadium’s Investors in Securities Lending…

Time for the buy-side to take collateral responsibility in securities finance

April 24, 2017

Stephen Malekian

Collateral Management, Derivatives, Investments, Repo, Securities Lending, Technology

buy-side, collateral, CSAs, derivatives, Elixium, Repo, Securities Lending, technology, topstory

The buy-side has an opportunity to take control of its own collateral activity, bringing both financial and operational benefits. Breaking this process down shows that a robust collection of tools…

Failed Icelandic Bank Landsbanki Islands HF loses collateral bid in UK courts

April 20, 2017

collateral, Landsbanki Islands HF, Raiffeisen, Repo

– British high court throws out bid to revalue collateral – Repo and securities lending positions were between Landsbanki Islands and Raiffeisen – Landsbanki Islands had defaulted on the trade…

HQLAx and R3 make their move on a collateral blockchain: will this work?

April 11, 2017

Blockchain, Collateral Management, Market infrastructure, Settlements

blockchain, collateral, Digital Asset, DTCC, HQLAx, R3, topstory

HQLAx and R3 announced last week that they have tested a blockchain-based collateral trading system with a consortium of five banks. The press release revealed enough that with a little…

Does the Direct/Peer to Peer market need standardized contracts for success or will customized contracts be enough?

April 10, 2017

Collateral Management, Repo, Securities Lending, Technology

agreements, All to All, collateral, contracts, direct, peer to peer, topstory

An interesting point emerged at our Investors in Securities Lending Conference last week on the Direct/Peer to Peer/All to All panel: some platforms want participants to sign a standardized contract…

HQLAᵡ selects Corda for collateral lending solution in collaboration with R3 and five banks

April 6, 2017

blockchain, collateral, HQLAx, R3

Financial innovation firm R3, five of its members and financial resource management specialist HQLAᵡ have built a collateral lending solution for liquidity transfers on R3’s Corda distributed ledger platform. Project…

Highlights and takeaways from the Finadium 2017 Industry Conference (Premium)

March 22, 2017

Collateral Management, Market infrastructure, Regulatory, Repo, Securities Lending, Technology, US

buy-side, collateral, Finadium Conference, Market infrastructure, Repo, Securities Lending, technology, topstory