Collateral
Central banks should prepare to deal with sharp drops in liquidity, IMF says
Policy-makers need to take action to halt rising risks relating to liquidity, IMF says; central banks may be able to use collateral policies to deal with crises
RBA paper finds distribution matters when assessing impact of wealth effects
Example of car buying highlights how different households adjust consumption in response to housing wealth effects, although channels remain unclear
China CLO market stutters on economic slowdown
Regulator's move to increase liquidity and a rise in NPLs have slowed China structured credit market
Dutch bulletin: T2S can only succeed if ‘many’ CSDs sign up
The Netherlands Bank's latest bulletin highlights the importance of more CSDs in Europe signing up to the Target2-Securities platform since the initial migration in June
Reform of Sterling Monetary Framework is ‘ongoing’, says BoE’s Salmon
Executive director for markets highlights potential for sharia-compliant facilities to be included in framework, among host of possible future developments
Regulators sound warning on collateral squeeze
Report calls on regulators to fix 'structural and regulatory limitations' around collateral
ECB paper flags risk of ‘collateral damage’ from financial transaction tax
Working paper finds an increase in transaction costs, such as the financial transaction tax mooted in the EU, could impact the availability of collateral and damage market liquidity
Collateral impact from eurozone QE still unclear, says Euroclear’s Evenepoel
Effect of new liquidity regulations and eurozone quantitative easing on collateral is still uncertain, but the market is ‘always creative’, according to Euroclear’s head of treasury
Eurozone moving towards ‘single market for collateral’, say central bankers
Panellists from Belgian, French and Dutch central banks discuss moves towards harmonised collateral markets in Europe at conference in Brussels
Repo market coping with liquidity regulations for now, panellists say
Participants at Euroclear’s Collateral Conference say repo markets have delivered new efficiency gains to keep collateral supply up, but the outlook over the coming year looks less certain
BIS committee urges central banks to consider collateral policies ahead of time
Central banks should be aware of the effects of their policies on collateral markets, and use this knowledge to prepare in advance for crises, CGFS report finds
RBA mulls creation of repo CCP
Australia currently lacks a CCP for clearing repos, which could be exacerbating systemic risk and impairing market functioning, but previous efforts met with little enthusiasm
ECB’s collateral move adds pressure to Greek negotiations
Decision to cease accepting some Greek debt as collateral two weeks earlier than necessary turns banks toward ELA and adds pressure to political negotiations
Curbs on rehypothecation may boost welfare, St Louis Fed paper finds
Researchers find rehypothecation boosts welfare, particularly as inflation rises, but it generally goes too far, implying there are benefits to regulatory intervention
Economists at SNB study reuse of collateral
Working paper estimates the level of reuse activity in the Swiss franc report market between 2006 and 2013, before analysing the drivers of it
Swiss paper examines cost of different clearing set-ups
Research finds more sophisticated clearing arrangements for OTC trades can improve welfare – in a Pareto sense – but require more collateral
ECB eases collateral requirements for Greek bonds as borrowing costs soar
European Central Bank says it will reduce the haircut it applies to Greek government bonds, but insists it is not an ‘ad hoc reaction’ to this week’s market stress
National Bank of Denmark narrows range of collateral it accepts
Financial market ‘normalisation' provides ‘opportunity' to omit assets made eligible after crisis to keep Danish banks from borrowing in euros
ESRB paper identifies difficulties in tracing origins of collateral
Occasional paper presents results from two data collection exercises, finding ‘widespread’ use of securities financing transactions and lack of clarity on the reuse of collateral
Mersch: T2S may prompt ‘more global network for mobilisation of collateral assets'
ECB board member says Target2 offers 'possibilities for linkages' between T2S central securities depositories with those 'from other geographical areas'
Conditions ‘in place’ for repo expansion in East Asia and Pacific
Report published by central bankers in the Asia-Pacific region finds that repo markets are ‘not as large as might be expected’, but conditions are in place for them to grow
Polish paper proposes new model for risk of ‘double default' on collateralised loans
Commonly used Gaussian copula-based approach does not properly capture the residual risk to central bank balance sheets posed by correlated defaults
Fed overhauls collateral requirements for discount window
The changes, including separate requirements for fixed-rate and floating-rate loans posted by depository institutions, could make it harder to obtain central bank liquidity
BoE adds ECA-backed loans as acceptable collateral
Loans guaranteed by UK export credit agency UKEF will be accepted under the Bank of England's Sterling Monetary Framework, with a haircut