An odd WSJ article on the US repo market
Investment Banks’ Secret Cash Cow Jon Sindreu Nov. 23, 2018 Investment banks have made a nice little money-spinner out of a once broken trading strategy: The repo. But now that…
Read More US regulations approve amendments to swap margin rule
Five federal agencies approved final amendments to swap margin requirements to conform with recent rule changes that impose new restrictions on certain qualified financial contracts of systemically important banking organizations…
Read More US regulators accept some munis as HQLA
WASHINGTON–Three federal banking agencies today issued an interim final rule amending the agencies’ liquidity rules to treat certain eligible municipal securities as high-quality liquid assets, as required by the Economic…
Read More Bloomberg: What Squeeze? Treasury Repo Suggests Shorts Are Not So Extreme
For all of the hoopla about data showing speculators’ record net short positions in Treasury futures, the market for repurchase agreements suggests people may be overestimating the potential for a…
Read More Eurekahedge publishes data on the global hedge fund industry
Eurekahedge’s global hedge funds infographic sums up the industry as at August 2018. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional…
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Defining “strong regulation” for safe banks
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…
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Treasury issuances and Fed rates are changing technicals in the short end (Premium)
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…
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European and US repo markets are different, and that means one-size-fits-all-regulation is unwise
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,…
Read More The next evolutionary step in US tri-party?
The road to US tri-party reform has been long and winding, and has succeeded in mitigating over 90% of daylight credit exposure formerly associated with that market. Yet, structural efficiencies…
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Finadium: Beyond the Bulge: Foreign Banks and Smaller Dealers in US Repo
The focus on balance sheet and return on capital constraints faced in the repo business by bulge bracket US banks has often drowned out the vitality of foreign and non-bank…
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Finadium/DEGC repo breakfast recap: sharp insights on market structure, technology and future risks (Premium)
Finadium and DTCC-Euroclear GlobalCollateral (DEGC) held a repo breakfast update on Thursday, May 31 in New York. We were pleased to welcome 45 market participants across 27 dealer, buy-side and…
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No one is happy about US deregulation except these people (Premium)
As US deregulation moves into gear, international regulators are voicing their deep concern with the breakdown of the attempted finalization of Basel III. Meanwhile, the US Congress pushes ahead while…
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The global bond market sell-off and its big benefits for securities lending
A global bond market sell-off occurring this week may see US Treasury 10 year notes reach a yield of 3% and German five years stay positive. These are magic numbers…
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News Update: dividend taxes in Switzerland, the US and Germany; and what’s next for the Basel Committee (Premium)
This week’s News Update is on taxation and regulation. There’s a lot going on in the world and the details matter. Here’s the latest from Switzerland, the US, Germany and…
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What does “recalibrating” the Leverage Ratio mean?
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…
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Finadium Report: Analysis from the US Rates & Repo 2017 Conference
Finadium has documented the questions and feedback from our November 1, 2017 Rates & Repo event in New York as a research report. The event drew 145 attendees, with 34%…
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US borrowers reviewing beneficial owners for collateral comfort (Premium)
US prime brokers are now closely evaluating funds as securities lenders – beneficial owners – to ensure that their legal agreements offer proper protection in the event of a counterparty…
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CFTC Chief Giancarlo calls EU regulatory proposals “disruptive, expensive and detrimental” to the US
In the strongest words that we’ve seen used by a leading regulator in a long time, CFTC Chairman J. Christopher Giancarlo today roundly criticized EU plans to regulate non-EU financial…
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Recap of Finadium’s Rates & Repo Conference 2017 in New York
We are pleased to report that our first Rates & Repo Conference, held last week in New York, was by all accounts a great success. We had 162 registrations by…
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Debating solutions to the US Supplementary Leverage Ratio problem (Premium)
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…
Read More Our slides from the Oct 3 London event, “Market Competition, Europe and US regulations” (Premium)
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…
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What happens when tapering decreases the amount of availability on the Reverse Repo Facility? (Premium)
The Fed provided an update to their operating policy on the Reverse Repo Facility (RRP) last week. While nothing substantive will change in the coming months, the concurrent announcement of…
Read More Thursday News Roundup: Brexit moves, Volcker revisions, picking spots in secured financing and more
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,…
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What kind of Fed Governor would Randal Quarles be? (Premium)
Randal Quarles, former Carlyle Group Partner and Under Secretary of the Treasury for Domestic Finance, appeared before the US Senate Banking committee last week for a confirmation hearing to be…
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A CCP for US Treasuries? Here are some pros and cons (Premium)
The US House Subcommittee on Capital Markets, Securities, and Investment held an interesting hearing last Friday on US fixed income market structure. Although the product range is extremely diverse, witness…
Read More Basel Committee report card on LCR in China, EU, and US
Today the Basel Committee on Banking Supervision published reports assessing the implementation of the Liquidity Coverage Ratio (LCR) in China, the European Union and the United States. Overall, the LCR…
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As the US gets serious about deregulation, what will Europe do?
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…
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Repo approved as an alternative to LIBOR – what does this actually mean?
The Federal Reserve’s Alternative Reference Rates Committee (ARRC) announced last week that they had selected “a broad Treasuries repo financing rate” as “best practice for use in certain new U.S.…
Read More Bloomberg: How China’s Biggest Bank Became Wall Street’s Go-To Shadow Lender
High up in a New York City skyscraper, China’s biggest bank is playing in the shadows of American finance. The prize for Industrial & Commercial Bank of China Ltd. isn’t…
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US Financial CHOICE Act likely to pass House – will it pass the Senate? (Premium)
The US Financial CHOICE Act, the Republican plan to repeal and replace Dodd-Frank, is heading for a vote in the US House this week. If approved as expected, it moves…
Read More CFTC Issues Order of Registration to Eurex Zurich AG to Permit Trading by Direct Access from the U.S.
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) announced today that it has issued an Order of Registration (Order) to Eurex Zurich AG (Eurex Zurich), a Foreign Board…
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The business case for tri-party repo flexibility
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…
Read More Repealing Dodd-Frank: understanding the revised Financial CHOICE Act (Premium)
The US House of Representatives Financial Services Committee recently passed a revised Financial CHOICE Act for discussion. This is the big Republican plan for repealing/replacing Dodd-Frank rules, including the proposed…
Read More Trump suspends SIFI designations by FSOC pending review
Presidential Memorandum for the Secretary of the Treasury MEMORANDUM FOR THE SECRETARY OF THE TREASURY SUBJECT: Financial Stability Oversight Council The Dodd-Frank…
Read More Trump suspends Dodd-Frank’s Orderly Liquidation Authority pending review
Presidential Memorandum for the Secretary of the Treasury MEMORANDUM FOR THE SECRETARY OF THE TREASURY SUBJECT: Orderly Liquidation Authority Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act,…
Read More UST Repo: dealers get breathing room and make some money at end of Q1 2017 (Premium)
A Finadium analysis of US Treasury overnight repo rates from the last three quarters shows that Q1 2017 turned out alright for dealers. Not as good as Q3 2016, but…
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FISL in New York: day 2 highlights
Finadium’s Investors in Securities Lending (FISL) conferences are bringing together a wide spectrum of participants in the securities finance market, and you can follow the major issues discussed at the inaugural NYC launch here…
Read More Reuters: Republican senators want review of SIFI designation process
Republican lawmakers on Tuesday asked the U.S. Treasury secretary to review the process a government council uses to label non-bank institutions “too big to fail,” saying the additional capital requirements…
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If US health care reform is this hard, can Dodd-Frank reform get passed?
The lessons this week from US health care reform show the potential obstacles that Dodd-Frank reform could face in the next year, if the US government can get there at…
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GlobalCollateral introduces its Inventory Managing Service (IMS): dealers speak on the opportunities and challenges
On December 16th, 2016 Euroclear received regulatory approval from the Securities and Exchange Commission (SEC) to expand its exemptive order to include US equities. This cleared the way for DTCC-Euroclear…
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US and European repo markets at the end of 2016: a regional analysis (Premium)
Using ICMA’s recent analysis of the European repo markets and our own February 2017 research paper on US repo market trends, we contrast market conditions at the end of 2016 to…
Read More Mnuchin confirmed as US Treasury Secretary
Bloomberg reports: Steven Mnuchin was confirmed as U.S. Treasury secretary, filling the role of chief spokesman for the dollar and steward for the Trump administration’s economic priorities. The former Goldman…
Read More Finadium: The US Repo Market in December 2016: What Happened and What’s Next
In this Investor Focus report, we provide a statistical evaluation of the US repo market in December 2016 across US Treasuries, corporate bonds and S&P 500 equities. We use both…
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Is the US Republican administration the answer to global financial regulatory disarray? (Premium)
The Bundesbank says “no deal is better than a bad deal” on Basel III while the EU issues “adjusted” Basel rules. Asian regulators have published proposals but are taking a…
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Changes to US H-1B visa program for tech workers will impact banks, technology firms
US technology firms serving banks are amongst the most aggressive users of the H-1B Visa program, which allows for certain highly skilled foreign workers to receive preference in the “green…
Read More Would brokers move back into prop trading without Dodd-Frank? (Premium)
If changes to the Volcker Rule come to pass, what is the likelihood that brokers will dust off the prop desks and draw back trading talent that fled to the…
Read More SEC Establishes Supervisory Cooperation Arrangement With Hong Kong SFC
Washington D.C., Jan. 19, 2017 — The Securities and Exchange Commission today announced that it has established a comprehensive arrangement with the Hong Kong Securities and Futures Commission (SFC) as…
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Why Securities Lending Indemnification Matters to Beneficial Owners
Securities lending indemnification for investor portfolios continues to be heavily in demand. However, regulations and the ensuing capital charges associated with providing indemnification are increasingly changing how indemnification is perceived,…
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Securities Finance Monitor Magazine Edition 5, our technology special, is now online
Securities Finance Monitor Magazine Edition 5, our technology special, is now online. Hard copies will be distributed at Deutsche Borse’s Global Funding and Finance Summit and at our upcoming events…
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