Collateral
Argentina attempts to speed up financial transactions
The central bank will allow the public to directly submit their tax returns to banks, as part of a series of measures designed to boost credit
Opaque money markets work well, Nobel laureate says
Bengt Holmström says policymakers should not try to make money markets more transparent
Fed’s liquidity policies more restrictive than other central banks
NY Fed article compares the Fed’s collateral and liquidity frameworks to other major central banks, finding the US central bank is much more limited in its operations
Fixing the ‘perverse incentives’ in the SLR
Richard Heckinger warns the US’s supplementary leverage ratio in its current form discourages banks from using central counterparties
‘No evidence’ of criminality in BoE crisis auctions
Bank of England given all clear on question of whether financial crisis liquidity auctions were rigged; central bank has now corrected may of the issues with its liquidity framework
Irish paper examines why banks set collateral conditions
Ex-ante risk and loan size are key factors, researchers say
Pure DLT systems not yet suitable for wholesale payments – Bank of Canada
The current state of distributed ledger technology makes it too inefficient to run as a pure system, though elements could still be useful, researchers say; details of RTGS project emerge
Belgian paper examines use of illiquid loans as collateral
Liquidity and funding purposes both inform banks’ decisions, researchers say
Central banks could intervene on repo market function – BIS study
Markets still in a “state of transition” but some central banks might want to take action to mitigate adverse effects, CGFS report says
Risk management services provider of the year: OpenLink
OpenLink has continued the evolution of its Findur product with the development of collateral management functionality, notably supporting the Bank of Canada in its move towards collateral posting
Regulations and QE impacting repo market – ECB’s Mersch
Executive board member says “confluence of factors” has boosted demand for collateral and impaired its supply, but the situation may improve
LCH platform to provide risk calculations for margin hub
SwapAgent will send standardised sensitivities for bilateral trades to AcadiaSoft to make IM calls
FSB: ‘no immediate case’ for aligning rehypothecation rules
No pressing need to harmonise rules, but better monitoring of global collateral reuse will give regulators a clearer understanding, FSB says
ECB will stay in asset markets - Draghi
Asset purchases will continue, but at a lower monthly rate; ECB to accept cash as collateral in securities lending programme
Euro architect says ECB has ‘destroyed’ market discipline in Europe
Otmar Issing, the man who designed the operational framework for the euro, says failures by European politicians and the ECB mean “all the elements” are in place to bring “disaster” to the monetary union
IMF’s Singh urges central banks to beware of collateral impact of policy
Senior economist says asset purchase programmes have drained quality collateral from the system, damaging the economy’s “financial plumbing”
RBI’s Mundra hopes to boost credit to small businesses
Deputy governor outlines “ABCD” of issues affecting small businesses’ ability to access credit, including better access to information and new forms of collateral
BoE researchers outline risk of collateral collapse
In stress periods, collateral chains could break, paper in forthcoming Journal of Financial Market Infrastructure warns
Network analysis sheds light on systemic risk – BoE paper
Pilot study of derivatives markets makes use of CDS data to map network of interlinkages, finding more than just immediate counterparty ties matter for systemic risk
ECB paper considers impact of loss in collateral value
Research examines how a loss in value will impact the wider economy by studying the effects of a legal reform in Sweden in 2004; sees potential for ‘negative consequences’
Paper models impact of ECB’s collateral policy
A working paper offers a model of the impact of the ECB’s collateral policy on the eurozone between 2009 and 2011; effects smoothed transmission of monetary policy, researchers argue
FSB looks to gauge risks around collateral reuse
Reusing collateral brings various benefits, but could also pose stability risks, report says; FSB outlines options for measures that could give supervisors a clearer picture of reuse patterns
Jamaica will require banks to have recovery plans to access emergency liquidity
Banks must provide recovery plans under new emergency liquidity facility, Jamaican bank governor says
Riksbank floats new collateral limits
Swedish central bank looks to limit the amount of covered bonds pledged as collateral for intraday credit; assessment suggests limited impact on banks