Securities Finance Monitor is on vacation the week of August 18. See you August 25.

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WSJ on repo: the news is still depressing

The WSJ is having a field day reporting on repo. Two related back-to-back articles, “Banks Retreat From Market That Keeps Cash Flowing” (August 12th and updated on the 13th) and “Fed Officials Suggest Limiting Banks’ Repo Exposure” (August 13th). Both are by Ryan Tracy. Little of the news is good.

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Survey preview: insurance companies, fund managers and collateral policies (Finadium subscribers only)

This article previews an upcoming Finadium research survey on insurance companies, fund managers and the process of collateral management. In particular, we look at manager thinking on collateral efficiency and portfolio strategy, non-cash vs. cash and the value of trading collateral.

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The Harvard Law School Forum article “Nationalize the Clearinghouses” — the author may have jumped the gun

An article in the August 8, 2014  Harvard Law School Forum on Corporate Governance and Financial Regulation entitled “Nationalize the Clearinghouses!” brought up some interesting issues. We take a look.

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“Financial Stability Monitoring” by the Fed keeps looking for that line between the gold standard of risk management and the desire to let the economy grow

A recently revised staff research report from the Federal Reserve, “Financial Stability Monitoring,” by Tobias Adrian, Daniel Covitz, and Nellie Liang, looks at how risk should be tracked across financial markets. We review both the revised report and a new blog article by the authors.

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Reuters article on Puerto Rican bonds as repo collateral — interesting although missing some detail

An August 5, 2014 article in Reuters, “Unlikely booster for money market funds: beat-up Puerto Rico bonds” by Tim McLaughlin caught our attention. But it seems to be missing some details.

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Cross margining of derivatives: can it work?

There have been a couple articles on cross margining of derivatives recently, mostly focused on netting exposures within CCPs. This has been a hard nut to crack.

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Too big to fail and bank funding costs: results of a new GAO study (Finadium subscribers only)

The US Government Accountability Office (GAO) released a study last week that looked at US bank funding costs in light of recent financial regulatory reforms. The study showed no 100% conclusive results, but details reveal some helpful suggestions in considering how bank funding costs should be assessed.

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Tackling the question of insurance companies and pension plans in systemic risk

The Bank of England has published a useful discussion paper on insurance companies and pension plans as procyclical investors. This important topic is one of the few that has not gotten significant attention since the financial crisis. Sure, its all well that banks have higher capital requirements. But what happens if the major investors all rush towards […]

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Thursday news roundup: defining liquidity, Moody’s, seclending CCPs, non-bank financial credit providers

Interesting news and articles from the last week that we haven’t gotten a chance to talk about elsewhere, including MiFID and liquidity, a suggestion that Moody’s has preferenced ratings of bonds held by its corporate owners, and securities lending CCPs. Read on.

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