Tag Archives | Liquidity Management

Three conditions for pre-trade liquidity and collateral analysis tools hitting the market (Finadium subscribers only)

With BNY Mellon’s new Liquidity Aggregator tool hitting the market last week, we got to thinking about what pre-trade collateral and liquidity management tools would look like and what it will take for the market to adopt these tools.

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Tricky business: EU thinks about requiring formal consent to lend out client’s collateral

An article in Bloomberg BusinessWeek, “EU Weighs Curbs on Banks’ Use of Client Assets as Collateral” by Jim Brunsden last week, discussed a move that could have some serious ramifications for repo.

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Shadow Banking not that Shadowy, says Cantor

An article in the June 1, 2012 Business Week by Jody Shenn and Lisa Abramowicz, “Cantor Plans to Enter Shrinking Shadow Banking”, took us by surprise. Cantor Fitzgerald is starting a repo conduit called Institutional Secured Funding. For those who aren’t familiar with repo conduits, they are classic shadow banking. Traditional repo conduits allow securities […]

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A look at the Volcker Rule’s impact on market liquidity

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 addresses the impact of the Volcker Rule on market liquidity.

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CFTC’s “MF Global Rule” is pushing FCM’s client cash into repo market

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 MF Global. The evolution of those rules is well known. In December 2000 the CFTC allowed FCMs to invest client money is securities beyond US […]

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What is really driving the banks demand for LTRO cash from the ECB?

The LTRO continues to attract attention. With another tranche coming up on February 29th, pundits relish in writing about how much money the banks will make by buying sovereign debt and funding it via the LRTO. We are sure some banks, encouraged (or not) by government officials, will make that “free lunch” investment. (We would […]

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Sure enough, seclending and repo are central to financial markets

Securities Lending Times had a great comment out this morning: securities lending and repo came up the Association for Financial Markets in Europe (AFME) liquidity conference yesterday. A group of economists were discussing deleveraging in financial markets and brought up, without any apparent prompting, that securities lending and repo needed to regain some lost activity […]

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More on collateral upgrades and collateral mismatch

On January 20th we posted “Is the collateral upgrade trade a red herring?“. This isn’t the first time we have written about the complexities of collateral swaps. Last October we posted “Derivsource: Collateral Transformation, Silver Bullet or Smoke and Mirrors”. We too questioned the maturity mismatch between long dated swaps which need collateral posted in CCPs […]

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Euromoney interview with IMF Economist Manmohan Singh on repo, re-hypothecation, collateral chains, and more

Euromoney just published an interview with IMF Economist Manmohan Singh. A link is here. Singh has written extensively on securities financing, collateral chains, shadow banking, and re-hypothecation — all things near and dear to us. We have referred to his writings in Finadium research pieces (here is a link) as well as other www.secfinmonitor.com posts (including […]

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Where is all that corporate cash going? Why, to repo of course.

If you were wondering where all that corporate cash is going, according to a January 9, 2012 article in Reuters by Douwe Miedema (a link is here) it is going into the repo market. Afraid to lend the cash to banks in unsecured deposits, corporates are, more and more, investing in repo. The article quoted Frank […]

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