Money market funds
Basis trade loses its bite as banks move in
Returns on popular hedge fund strategy dwindle to as little as three basis points, while dealers make use of softened capital rules to replicate the trade
A not-so-stable Genius Act?
New stablecoin rules raise monetary sovereignty and financial stability concerns
The Genius Act: a smart move for global payments?
Experts from the stablecoin industry discuss if new US law can live up to its name
BoE’s Benjamin on market resilience, non-bank liquidity and the modern financial system
The UK central bank’s executive director for financial stability strategy and risk speaks about leverage in the gilt repo market, minimum haircuts and central clearing, and securing liquidity to where it’s needed
Book notes: Beyond banks, by Dan Awrey
The book proposes thoughtful reforms to establish the same reliability for new monetary IOUs as currently exists for bank IOUs
Tokenised MMF market ‘small’ but could create contagion – BdF
French central bank calls for international co-operation to regulate new assets
ECB intervention stabilised debt market during Covid – research
Study by bank’s economists says firms found it harder to issue commercial paper later on
Trump 2.0 piles pressure on reserve managers
Speakers at Central Banking Spring Meetings discuss positioning, interventions and impact of lost aid
Book notes: Central bank capitalism: monetary policy in times of crisis, by Joscha Wullweber
This book asks if independent monetary policy is feasible at a time when central banks prop up the poorly regulated shadow banking sector
BoE stress test highlights liquidity risks in non-banks
“First-of-its-kind” scenario exercise reveals how repo financing could be insufficient during shocks
Implementation of regulatory reforms ‘uneven’, says FSB
Annual report reviews efforts over past year to adopt Basel III and tackle risks in non-bank sector
Stablecoins are not ‘crypto safe haven’ – ECB paper
Shocks in crypto markets significantly reduce stablecoin market capitalisation, researchers find
Lessons from the banking turmoil of 2023
Guardrails on capital, liquidity, deposit insurance, resolution, digitalisation and disintermediation need a rethink
Riskiest non-banks shrink for first time since 2009
FSB says narrow measure of riskiest firms fell in 2022 as asset price falls hit investment funds
UK regulator proposes tougher rules for money market funds
BoE welcomes FCA move and warns of wider risk of “dysfunction” in core markets
Fed’s Cook is concerned about non-banks and real estate prices
Hedge funds could rapidly pull out of Treasury cash futures market
Stablecoins more vulnerable to runs, say Fed researchers
Authors point out similarities with MMFs and warn about financial instability risks
Soma manager predicts transition success for US reserves
Roberto Perli said short-term funding markets will likely not see significant disruptions
BoE to conduct ‘desk-based stress test’ for 2024
Financial policy committee warns of some risks in UK corporate and household finance
Banks increasingly reliant on ‘flighty’ finance, BIS finds
Money market funds are taking on an even greater role as funding sources, research says
Stefan Ingves on central bank failings on inflation and financial stability
The Riksbank veteran speaks about liquidity, interest rate and non-bank regulatory reforms, the importance of saying ‘no’, and the need for explicit legal definitions for digital money