Europe

artificial intelligence, Center for the Governance of Change, ethical AI, Europe

News and Notes – Fintech

Europeans are anxious about technological change and want governments to take action, according to a new report by the Centre for the Governance of Change, which surveyed citizens of eight…

Uncertainty in reporting for CSDR settlement fails rules

March 11, 2019

ESMA, Europe, Regulatory, Settlements

CSDR, ESMA, Europe, settlement fails, topstory

It looks like ESMA’s application of settlement discipline under CSDR may have extraterritorial impacts, which could result in investor preferences to use one CSD over another to ensure being subject…

ECB papers highlight the state approach to solving market problems

February 19, 2019

Europe, Regulatory

ECB, Europe, Regulation, topstory

Recent European Central Bank (ECB) working papers on collateral have been really good, well researched and thoughtful about the problems they are tackling. They also show a continued bias towards…

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.…

ICMA: End of 2018 European repo market relatively uneventful

January 15, 2019

Europe, ICMA, Repo

Today ICMA has published a briefing note on the European repo market at 2018 year-end. The note documents and analyses repo market behaviour through 2018 year-end. Compared with the previous…

Not that dramatic: repo spikes in Europe and the US were quick and understandable

January 7, 2019

Repo, SOFR

Europe, Repo, SOFR, topstory, US

End of year repo trading in both the US and Europe saw the same types of leaps in General Collateral (GC) rates backed by government collateral that we’ve seen before,…

ICMA ERCC publishes revisions to the Guide to Best Practice in the European Repo Market

December 21, 2018

ERCC, Europe, ICMA, Repo

ICMA’s European Repo and Collateral Council (ERCC) is publishing revisions to its Guide to Best Practice in the European Repo Market (Guide). Written on the basis of detailed input from…

Reuters: EU takes new step on derivative clearing, despite UK, U.S. concerns

December 3, 2018

CCPs, equivalency, Europe, Reuters

BRUSSELS (Reuters) – European Union governments backed on Monday a proposal that could force systemic foreign clearing houses with operations in the EU to relocate to the bloc if they…

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…

ECB says securities finance markets lost liquidity from June to August 2018, deterioration in general collateral market

October 30, 2018

ECB, Europe, securities finance, SESFOD

Results of the September 2018 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD) Credit terms tightened, in line with the expectations reported in…

Bloomberg editorial: Europe’s Banks Aren’t Ready for the Next Crisis

October 24, 2018

banks, Bloomberg, Europe

A renewed bout of distress among Greek and Italian banks illustrates a deeper problem in Europe: The financial system’s overseers haven’t done nearly enough to prepare for the next crisis.…

FT: European banks weigh leaving UK derivatives market

October 2, 2018

derivatives, Europe, FT

European banks are considering whether to begin closing out their trillions of pounds’ worth of derivatives positions in London in the coming months as the UK struggles to finalise an…

EquiLend opens Dublin office

September 18, 2018

Dublin, Equilend, Europe, Ireland

DUBLIN (Sept. 18, 2018)—EquiLend, a leading provider of trading, post-trade, market data and clearing services for the securities finance industry, today announces the opening of its office in Dublin to…

FT: EBA Chief Enria says back-to-back trading must stay after Brexit

September 18, 2018

Andrea Enria, back-to-back trading, EBA, Europe

Andrea Enria, the head of the European Banking Authority, told the FT in an interview that a contentious way of transferring risk across borders was an indispensable “backbone” of global…

EMMI cancels European repo index project

September 12, 2018

EMMI, Europe, Repo

The EMMI Board of Directors has decided to stop the efforts toward the production of a pan-European reference index for the secured segment of the euro money market under the…

European Systemic Risk Board says data coverage of Shadow Banking “hampers activity-based monitoring”

September 12, 2018

Europe, Shadow Banking

The European Systemic Risk Board (ESRB) has today published the EU Shadow Banking Monitor 2018 which covers data up to end-2017. This is the third issue in an annual series…

ECB’s Mersch warns on pan-European payment failure and big foreign fintech dependence

September 5, 2018

News and Notes – Fintech

ECB, Europe, fintech, Payments, Yves Mersch

Excerpt from speech by Yves Mersch, Member of the Executive Board of the ECB, at the European Institute of Financial Regulation (EIFR), Paris, 3 September 2018 Progress towards an integrated…

Defining “strong regulation” for safe banks

August 14, 2018

Basel III, Regulatory

Europe, Regulation, topstory, US

In an interview with Welt am Sonntag last week, ECB Executive Board Member Sabine Lautenschläger argued that strong bank regulation leads to strong banks. US regulators would agree but have…

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…

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…

SFM Magazine, Summer 2018, is now online

July 2, 2018

Big Data, Collateral Management, Regulatory, Repo, Securities Lending, Technology, Trade Repositories, Tri-Party Repo

Big Data, collateral management, Data repositories, Emerging Markets, Europe, Regulation, Repo, Securities Lending, topstory

Securities Finance Monitor Magazine, Summer 2018, is now online. This edition features articles on what to do with all the data that regulators are collecting, if securities lending is a…

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

June 13, 2018

Jonathan Cooper

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,…

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

March 21, 2018

Jonathan Cooper

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…

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…

Germany, France call for cryptocurrency scrutiny while small European banks seize opportunities

February 12, 2018

News and Notes – Fintech

cryptocurrencies, Europe, France, G20, Germany

A letter sent to Argentina’s finance minister urging that cryptocurrencies get put on the G20 agenda has been making the rounds. Sent by heads of the German and French central…

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…

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,”…

CCP recovery and resolution moves forward in EU parliament

January 26, 2018

CCPs, Economic and Monetary Affairs committee, Europe, European Parliament, Resolution and recovery

The European Parliament’s Economic and Monetary Affairs committee confirmed that a report drafted by Kay Winburne and Jacob von Weizsacker received support and was voted through. The position of the…

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…

What does “recalibrating” the Leverage Ratio mean?

December 7, 2017

Basel III, Regulatory

Basel III, Europe, Leverage Ratio, Supplementary Leverage Ratio, topstory, US

There has been a lot of talk lately about recalibrating the Leverage Ratio, especially in the US where the enhanced Supplementary Leverage Ratio (eSLR) of 5% for holding companies and…

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…

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…

The EU Systemic Risk Board on collateral premia: some logical conclusions and a few open questions

November 2, 2017

Jonathan Cooper

Collateral Management, Europe, Repo, Systemic Risk

collateral management, EU Systemic Risk Board, Europe, GC, Repo, risk, scarcity, specialness, topstory

The EU Systemic Risk Board has published a paper, “Collateral scarcity premia in euro area repo markets” (October 26, 2017) that bears some examination. At the close of 2016, the…

DTCC’s GTR bolsters capabilities for SFTR

October 24, 2017

DTCC, Europe, SFTR

DTCC has begun efforts to enhance its European Global Trade Repository in support of the upcoming Securities Financing Transactions Regulation (SFTR) expected to be implemented in 2019. SFTR will require firms…

FN: European repo market fears a year-end freeze

October 19, 2017

Europe, Repo

Following a shocking spike in volatility in a key source of short-term funding for asset managers, banks and pension funds, market participants say there is no silver bullet to prevent…

Is the European repo market in recovery? The latest ICMA survey suggests some direction

October 18, 2017

ECB, Europe, Repo

Europe, ICMA, ICMA European Repo Council, Repo, topstory

The headlines look good: based on the ICMA ERCC’s June 2017 data collection, the European repo market grew 6.4% since December 2016 and 12.4% since June 2016 based on a…

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…

An ECB Reverse Repo Facility is a painful idea, even if it may be necessary

October 3, 2017

ECB, Europe, Repo, RRP

ECB, Europe, ICMA, Reverse Repo Facility, topstory

ICMA’s Andy Hill was quoted by Global Investor as being in support of a Reverse Repo Facility (RRP) in Europe: “To the extent that regulation prevents banks from doing what…

The European Commission doubles down on an integrated financial supervisory regime

September 26, 2017

Europe, Regulatory, Short Term Interest Rate Benchmarks

Benchmarks, EBA, EIOPA, ESMA, Europe, market data, topstory

Following moves towards a banking union (2012), the rupture of Brexit (2016) and major initiatives like MiFID II (coming to fruition in January 2018), the European Commission has announced its…

The layering of regulatory cost on Securities Financial Transactions

September 19, 2017

Michael Cyrus

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

DekaBank, Europe, Leverage Ratio, Michael Cyrus, NSFR, regulatory cost, securities finance, SFTs, topstory

It is now part of financial textbook wisdom that collateralization is a favored tool to reduce unsecured exposures in financial systems and thereby promote systemic stability. However, in stark contrast,…

Thursday News Roundup: Brexit moves, Volcker revisions, picking spots in secured financing and more

August 3, 2017

Dodd-Frank, Europe, Total Return Swaps, UK, US

blockchain, Brexit, Europe, topstory, UK, US, Volcker

There was a lot of news this week for what should be a slow summer period. In this edition of News Roundup we look at regulatory changes, technology in trading,…

A European Commission paper on EU finances has some good ideas, but a Financial Transactions Tax is not one of them

July 4, 2017

Europe, Tax

Europe, Financial Transactions Tax, FTT, topstory

The European Commission has released a compelling read, “Reflection paper on the future of EU finances“. This considers the tough question about what will happen to the EU budget after…

As the US gets serious about deregulation, what will Europe do?

June 29, 2017

Basel III, Europe, Regulatory, US

deregulation, Europe, topstory, US

Recent speeches by US regulators show an apparently sincere effort underway to reduce bank regulation. The biggest proposal out there – taking US Treasuries out of the Supplementary Leverage Ratio…

ICMA publishes study into the state and evolution of the European credit repo market

June 22, 2017

Credit Markets, Europe, ICMA, Repo

The International Capital Market Association (ICMA) has today published a study entitled ‘The European Credit Repo Market: The cornerstone of corporate bond market liquidity’ which explores and describes the state and…

ESMA says Brexit and EU elections are biggest risks for 2017

June 15, 2017

ESMA, Europe, risk