A rule on cross-margining released just a couple days before the March 11th start of mandatory clearing for derivatives caught the attention of a lot of people. It came from…Read More
In a speech today before the Committee on Banking, Housing, and Urban Affairs of the U.S. Senate, Federal Reserve Governor Daniel Tarullo will outline key priorities for the Federal Reserve…Read More
In a recent survey released by SunGard Adaptiv and the Professional Risk Managers International Association (PRMIA) there was an interesting question on the impact of new capital requirements. The results…Read More
Manmohan Singh, the IMF economist, has just published a great paper on collateral, “The Changing Collateral Space”. We take a look at what he has to say. Continue readingRead More
In late December the Federal Reserve released their quarterly “Senior Credit Officer Opinion Survey on Dealer Financing Terms” (SCOOS) report. The interesting stuff are always the special questions. This report’s…Read More
CFTC Commissioner Bart Chilton gave a speech entitled “Deciphering Chaos“ to the High-Frequency Trading Leaders Forum in Chicago on October 9, 2012. The speech was posted on the Harvard Law School…Read More
With Dodd-Frank in the "terrible twos", a Davis Polk reports on how the rule making is coming along.
Davis Polk & Wardwell, the “white shoe” Wall Street law firm, periodically puts out a regulatory update, the “Dodd-Frank Progress Report”. As Dodd-Frank hits its stride in the “terrible twos”,…Read More
Two US Senators on the Senate Banking Committee, Sherrod Brown (Democrat) and David Vitter (Republican) have sent a letter to the issuers of the latest US Basel III Notice of…Read More
Cash is king in the FRB “Senior Credit Officer Opinion Survey on Financing Terms”. We look at the questions they ask on collateral posted in OTC derivatives.
The Q3: 2012 Federal Reserve “Senior Credit Officer Opinion Survey on Financing Terms” report was released earlier this month. It included a special section on the types of assets posted…Read More
The IMF has released a paper called “Assessing the Cost of Financial Regulation” authored by Douglas Elliott, Suzanne Salloy, and André Oliveira Santos. They claim the costs of new regulation…Read More
Recently the question has come up about which are less risky in today’s financial environment: bilateral counterparties or CCPs. Both have their own pros and cons, and it is well…Read More
“The Fed’s Emergency Liquidity Facilities during the Financial Crisis: The CPFF”: a new post at the NY Fed's Liberty Street Economics blog is worth a read
An August 20, 2012 post in the New York Fed’s Liberty Street Economics blog is worth a read. Entitled “The Fed’s Emergency Liquidity Facilities during the Financial Crisis: The CPFF”…Read More
We’ve been doing some more digging into the US Office of Financial Research (OFR), a new initiative at the US Treasury Department, to understand how it expects to fulfill the…Read More
The US Treasury’s Office of Financial Research (OFR) recently published its first annual report, including an interesting section on data transparency in the repo markets. The OFR was created as…Read More
Sovereigns and OTC Derivatives Clearing: the rules are a mess. We look at an excellent paper from BNYM.
Recently Bank of NY Mellon (BNYM) published a paper “Sovereigns in Search of Solutions:OTC Derivatives Reform: Direct and Indirect Impacts” reviewing the dilemmas faced by banks when executing OTC derivatives…Read More
Singh and Stella on the velocity of collateral: banks just don't trust each other. We think there is more to it.
A July 2, 2012 post by IMF Economist Manmohan Singh and consultant Peter Stella in the blog Vox revisits a familiar topic: the velocity of collateral. We’ve written about this…Read More
Dodd-Frank Section 610 amends section 5200 of the Revised Statutes 12 U.S.C. 84 to include derivatives, sec lending, and repo in the legal lending limits. The news services have picked up the OCC…Read More
A new briefing from Finadium identifies the major Basel III and Dodd-Frank rules that could affect counterparty default (borrower) indemnification, an important provision for pension plans, mutual funds and others…Read More
An article in Futures and Option World entitled “OTC Clearing IV: How to ease the collateral squeeze” (May 21, 2012) caught our eye. Most of it is the usual stuff on the…Read More
“Replumbing Our Financial System: Uneven Progress” by Darrell Duffie: turn tri-party clearing into a "dedicated regulated utility"
A recent paper authored by Darrell Duffie, Finance Professor at Stanford GSB is worth taking a look at. “Replumbing Our Financial System: Uneven Progress” was presented at the Fed conference…Read More
The Financial Stability Board (FSB) Workstream on Securities Lending and Repos has released “Securities Lending and Repos: Market Overview and Financial Stability Issues” (April 27, 2012). We mentioned yesterday that…Read More
As of April 13, 2012 the CME has started accepting corporate bonds as collateral for cleared OTC Interest Rate Swaps. We have been thinking about the CME criteria for accepting…Read More
A new opinion piece from Woodbine Associates published on April 4, 2012 “Beyond Volcker: Seeing the Forest through the Trees” caught our eye. About half-way into the piece the author…Read More
The battle of the clearinghouses is on. The key to success is the ability to minimize collateral dislocation by managing margin exposure by portfolio. To do this, clearinghouses must go…Read More
Late last year the CFTC proposed changes in the rules governing how Futures Commission Merchants (FCMs) invest client cash. Those rules — 30.7 and especially 1.25 – become infamous post…Read More
Following her participation at IMN’s Beneficial Asset Holder conference in Arizona this past January, we invited Anita Ryan from eSecLending to comment on the differences between stays to securities lending…Read More
The comment period on the Volcker Rule came to a close on January 13, 2012. Digesting those letters will take a lot of work and will inevitably impact the structure…Read More
A recent article from Towers Watson, the consulting firm, entitled “Is this the end of OTC derivatives for pension schemes” caught our eye. It is about the impact on financial regulation…Read More
IMN Beneficial Owners' Securities Lending Conference: a review of the regulatory issues facing the industry
We were at the IMN Beneficial Owners’ Securities Lending Conference in Phoenix earlier this week. There were a number of great discussions. Not surprisingly, several panels reviewed key regulatory issues…Read More
Bank of England's Tucker: "There is a big gap in the regimes for CCPs – what happens if they go bust? I can tell you the simple answer: mayhem."
At a conference this morning in Brussels, the Bank of England’s Deputy Governor Paul Tucker (member of the Monetary Policy Committee and Financial Policy Committee) made some remarks about CCP…Read More
From the Wall Street Journal: U.S. regulators, in a draft of rules governing the Volcker rule, are proposing to carve out exemptions for so-called repo transactions and securities lending, the…Read More
This sounds to us like a “The Emperor is wearing no clothes” moment….. Michael Bodson, chief operating officer of US post-trade utility Depository Trust and Clearing Corporation, insisted that central…Read More
The just released Bank of England Quarterly Report 2011:Q3 includes an interesting article on Securities Lending
“Developments in the global securities lending market” was authored by Matthew Dive of the Bank’s Payments and Infrastructure Division, Ronan Hodge and Catrin Jones of the Bank’s Financial Institutions Division…Read More
Fears over exemptions to Volcker rule By Tom Braithwaite, the Financial Times, in New York, September 18, 2011 The Volcker rule, which bans US banks from trading for their own…Read More