Monthly Archives: September 2010

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Bear felled by loss of repo funding

The repurchase market was the lifeblood of investment banks in the run-up to the financial crisis of 2007 and 2008, and it was the loss of this funding that brought Bear Stearns to its knees in March of 2008, according … Continue reading

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Basel regulators study ways to improve repurchase market

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Regulators at the Bank for International Settlements in Basel, Switzerland, published a report in September on ways that the clearing and settlement of repo transactions can be improved in light of the crisis in 2008. Washington, D.C. bank consultant Karen … Continue reading

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Tett: Silence on repo reform is “shocking”

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On the second anniversary of the collapse of Lehman Brothers, forced into insolvency by its repo lenders demanding more collateral or refusing to renew their loans, little has been done to reform the repurchase market, writes Gillian Tett, U.S. managing … Continue reading

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WSJ: Money market funds accepting riskier repo collateral

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Some money market mutual funds, which since the financial crisis have made repo loans mainly collateralized by government securities, have begun accepting corporate debt and stocks as security, reports the Wall Street Journal September 16. This move to riskier collateral … Continue reading

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European repurchase market hits record trading volume

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The European repurchase market, which is considered vital to the functioning of the financial markets, hit record trading volumes in June, the Financial Times reported September 15. The value of the repo market was up 25 percent, to €7 trillion … Continue reading

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FT: Seoul is building a repurchase market

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Seoul is quietly building a repurchase market, reported the Financial Times’s Seoul bureau chief September 12. Korean financial institutions fund each other with short-term unsecured loans in a call market 51 percent of the time, the Financial Times reported. Only … Continue reading

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Proposal: Limit securitized banking to special banks

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Securitized banking is worth saving, and that can best be done by creating special banks to buy the securities, say Yale professors Gary Gorton and Andrew Metrick, early proponents of the view that the financial crisis of 2007-2008 was a … Continue reading