The SEC has released their long-awaited rules on 2a-7 institutional money market funds and has chosen the floating NAV model. This is a shocker, to be sure. There were many who thought that the SEC would opt for one of two models, either floating NAV or constant NAV with restrictions, and many who are unhappy […]
The SEC shakes up the US institutional money fund industry; institutional prime funds must go to floating NAV
“Reforming Major Interest Rate Benchmarks” from the FSB looks at using GCF repo as derivatives benchmark
The FBS published on July 22nd a major report “Reforming Major Interest Rate Benchmarks”. They look at how the ‘IBORs could be reformed. The LIBOR scandal may have prompted the work, but it goes beyond that to include “risk-free rate” options available. Repo is part of the mix and we take a look.
Securities lending CCPs are at the intersection of major changes to liquidity and leverage in financial markets. Aside from requirements for increasing bank capitalization, Basel III is introducing new liquidity metrics such as the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). These shake-ups have already begun to change relationships between borrowers and […]
It is no secret that regulatory change brings out innovation (necessity and all that). Lately we’ve been seeing more proof of this in the securities finance space. Besides product launches in counterparty exposure management and ideas on centrally cleared repo, an interesting speech on innovation from a senior custody exec caught our attention. Here’s an […]
“Embedded Financing: The Unsung Virtue of Derivatives”: An article from the Journal of Derivatives that every securities financing professional should read
Earlier in the summer there was a paper in the Journal of Derivatives that every person in securities financing should read. It is called “Embedded Financing: The Unsung Virtue of Derivatives” by NYU Stern Professor Bruce Tuckman. Let us explain.
What happens when derivatives trading has more volume than the underlying? Is this the future for bond markets? (Finadium subscribers only)
The short answer is that the markets get messy and uncertain; we’ve seen this before with Fed Funds and OIS. Now the same situation could occur with US Treasuries, Gilts, other OECD government bonds and corporate bonds. What are the implications for this new market dynamic?
Citi Investor Services released a big hedge fund study, “Opportunities and Challenges for Hedge Funds in the Coming Era of Optimization,” the other week. While much of this contains older news, there are two things worth pointing out: Citi’s breakdown of asset manager needs for financing and an illustration of what being an efficient financing counterpart […]
The Economist writes about repo: “Neither liquid nor solid” and blames tight specials markets on regulatory change. Sorry, but no.
Repo seems to be getting a wave of confusing press. An important article by virtue of its large circulation was in the July 12th Economist, “Neither liquid nor solid”.
The latest post on the FRB-NY’s Liberty Street Economics blog is “Lifting the Veil on the U.S. Bilateral Repo Market”. Written by Adam Copeland, Isaac Davis, Eric LeSueur, and Antoine Martin, it addresses some important issues on sizing and composition of the repo market. It is worth a look.
Wednesday News Roundup: repo failures, Germany collateralizes, bank benefits from collateral (Finadium subscribers only)
Some new and compelling news stories over the last week spark up talk about shifting collateral needs, and more importantly, fundamental changes to bond market liquidity that we could impact securities finance in a profound way. Here is our take:
September 18, 2014
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London: Building New Business Models for Repo and Secured Funding
September 22, 2014
Sponsored by Zurcher Kantonalbank
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July 24th, 2014
Highly renowned within the securities lending industry, IMNs event has been Beneficial Owners meeting of choice for nearly twenty years and attracts close to 300+ attendees. We have an exclusive 10% discount for you to attend - use discount code SFM and join the rest of the beneficial owner community in London this September. For more information including confirmed speakers and complete agenda please visit: http://www.imn.org/eurosec14