Collateral
Using assets as collateral increases volatility of returns, Buba paper finds
Bundesbank discussion paper uses model comprising agents differing in their level of risk aversion; negative economic shocks substantially alter wealth distribution between the two
Collateral could be useful tool at zero lower bound, says ECB paper
Working paper shows broader collateral eligibility makes funding conditions easier for banks; notes this could be useful for policy, but central banks should not forget sound risk management
A new and explicit policy on liquidity provision
The Bank of England's new rules on liquidity provision reflect much closer regulation of banks' liquidity policies and a desire to avoid the mistakes of the crisis
ECB's Cœuré backs committed liquidity facility
European Central Bank executive board member suggests a committed liquidity facility could help remove incentives for regulatory arbitrage in the Eurosystem
ECB 'streamlines’ assessment of settlement systems
Eurosystem central banks will use a new framework with ‘considerable procedural simplifications’ to judge whether settlement systems are safe enough to be used in their credit operations
NY Fed trials new reverse repo facility
Federal Reserve Bank of New York tests new overnight reverse repo facility; William Dudley believes it will bolster the Fed’s control over short-term money market rates
ECB pushes banks on ABS reporting
European Central Bank raises the reporting bar for banks looking to use securities backed by SME loans as collateral; sets October deadline for more detailed disclosure
MAS to lend Singapore dollars against JGBs
Monetary Authority of Singapore and Bank of Japan strike cross-border collateral arrangement; MAS looking to make it easier for banks to manage their liquidity needs
ECB collateral move aims to cut ‘wrong-way risk' while boosting SME lending
Observers think incentivising of SME loan ABS could be precursor for an SME-targeted long-term refinancing operation
ECB compares central bank collateral frameworks
Study by ECB contact group says differences in central bank, regulator and CCP collateral frameworks enhance resilience of financial market infrastructures
Bank of Canada reins in risk concerns
Review of Canadian financial system finds risks from European sovereign debt crisis and Canadian housing market are retreating; special report says collateral demand is ‘manageable’
BoE markets head warns of collateral balancing act
Andrew Hauser says repo markets must be ‘prudentially sound’ but remain ‘sufficiently deep and liquid’; warns against an ‘excessive’ central bank presence
BIS finds ‘no evidence' of persistent collateral scarcity
Report says increased reliance on collateralised funding and demands of regulatory reforms have not led to any 'lasting or widespread scarcity' of high quality assets
The changing structure of the euro money market
Systematic reports on the European secured and unsecured money market would represent a powerful tool for central bankers despite the current distortions caused by Eurosystem liquidity operations
European Commissioner defends under-fire Tobin tax
Algirdas Šemeta says the European Commission’s proposal for a financial transactions tax is ‘technically and legally sound’; numerous stakeholders concerned by impact on repo markets
ECB paper models central bank liquidity provision
Researchers create model to find optimal level of central bank liquidity provision, by determining the most appropriate collateral framework
Bundesbank research proposes improved structure for counterparty credit risk
Discussion paper finds ‘quadri-partite’ structure gives best results for managing counterparty credit risk
ECB paper finds initial response to financial crisis was not good enough
Working paper suggests policy up to end of 2011 was insufficient to reduce credit availability problems for small businesses, underlining the importance of more recent innovations
BIS report ‘takes stock' of central bank collateral policy developments
Central bank collateral policy has responded to financial market shocks in different ways, though common principles underpin new frameworks
New York Fed demands better management of foreign exchange risks
Greater use of capital and collateral to mitigate all risks relating to foreign exchange trading is crucial, warns Jeanmarie Davis, head of financial market infrastructure at the NY Fed
Collateral problems in the euro area
The euro area sovereign debt crisis has caused remarkable growth in the operations of the Eurosystem. It also led to diminished collateral availability.
IMF paper says central banks are hoarding good collateral
Study finds pools of good collateral are evaporating as a result of unorthodox central bank policies; regulation is amplifying the trend
Book notes: Guardians of Finance
This is a book offering a useful contribution to the debate over the future of regulation. By James R Barth, Gerard Caprio Jr and Ross Levine
Asia can ease collateral squeeze, says Clearstream chief
The global thirst for high-grade collateral resulting from OTC clearing will require Asia to play a greater role in future, according to Jeffrey Tessler, chief executive of Clearstream