BIS chief calls for limits on NBFI leverage in bond markets
Use greater central clearing and minimum haircuts on repos to reduce risks, says Hernández de Cos
The use of leverage by non-bank financial institutions (NBFIs) to trade in the sovereign bond markets poses significant stability risks and must be curbed, the general manager of the Bank for International Settlements has urged.
Speaking at the London School of Economics today (November 27), Pablo Hernández de Cos noted that NBFIs had been increasingly present in the bond markets, as sovereign debt levels across advanced economies climbed and banks dialled back activities due to balance sheet
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