Chinese government authorities have created a multi-tiered plan to support sharply falling stock prices, including providing liquidity to the China Securities Finance Corporation (CSF). This entity provides margin and securities loans to brokers. By offering more capital to CSF, China hopes to stimulate demand for margin loans. At this point, more froth is needed and CSF will play a role. This article looks at CSF, what it is and how it works.
Regulators worldwide now recognize that market liquidity in fixed income is a Problem with a capital P. The interesting part is that in spite of the evidence, there is a struggle to accurately define what has caused the decline and how to reverse it. We look at recent regulatory commentary on market liquidity, what the work plans are, and see a couple of outcomes. Meanwhile, contrary evidence suggests that market liquidity is an obvious albeit indirect result of increased bank stability. Can regulators have both bank stability and market liquidity?
Bloomberg article: “Who Will Save the Repo Market? Barclays Has a Few Ideas”. Some ideas might have been missed.
Tracy Alloway and Liz McCormick wrote an article in Bloomberg: “Who Will Save the Repo Market? Barclays Has a Few Ideas” (June 29th), describing a research piece by Barclay’s Joseph Abate. It is interesting but misses some points.
OFR Financial Stability Monitor tracks drivers behind markets. We take a close look at Funding/Liquidity.Read More
The Fed updates on Tri-Party Repo Reform. What is left to do: cross-clearer GCF and post-default fire sales.Read More
IMN European Beneficial Owners' Securities Lending and Collateral Management Conference
Fleming Collateral Management Forum