Category Archives: Collateral

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Don’t touch my repo

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The repo industry has dire warnings for anyone who wants to rein in its market. The warnings are a sobering, inside look at how important the repurchase market has become to the world’s flow of credit. From the International Capital … Continue reading

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Economists and other analysts see value, danger in repo and shadow banking, urge reform

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Latest update: October 2, 2012 In recent months economists and other experts have published a torrent of reports on repo and shadow banking, noting their importance and their dangers and urging reform. Following are 74 of the reports, arranged chronologically … Continue reading

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News Round-up: Role of repo, securitization and shadow banking unsettled in post-crisis world

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RepoWatch recommends the following news reports. Items are arranged chronologically, with the most recent coming first. “Fed Said to Press BNY Mellon to Speed Repo Market Change” by Bradley Keoun, Bloomberg News, September 25: The Federal Reserve, seeking to cut … Continue reading

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Shadow banking, part 1: Failure to reform shadows hurts economy, endangers financial markets

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Updated June 18, 2012 One of the failures of the Dodd-Frank Act was in not restructuring shadow banking, with a sturdy repo market at its heart, so it could safely gear back up to boost credit and help the economy … Continue reading

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News round-up: Repo and shadow banking A to Z

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RepoWatch recommends the following reports. Search for the topics that interest you: DataWatch, Financial crisis, Finding a fix, Hedge funds, Regulation, Repurchase market, Securities lending, Securitization, Shadow banking, Too big to fail, and Tri-party repo. Items are arranged chronologically, within … Continue reading

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News round-up: Turmoil in shadow banking

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RepoWatch recommends the following reports. Search for the topics that interest you: Accounting, Collateral, DataWatch, Finding a fix, International repo, Money market funds, Securities lending, Securitization, Shadow banking, and Tri-party repo. Items are arranged chronologically, within topics that are listed alphabetically. … Continue reading

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News roundup: Repo and shadow banking in the crosshairs

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Repo and shadow banking have been getting a lot of attention lately. It’s rewarding that an understanding of their importance is spreading. RepoWatch recommends the following reports, arranged within topics that are listed alphabetically: Financial crisis “Getting up to speed … Continue reading

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Part 2: Here’s the data regulators need to collect on repo

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To spot the build-up of systemic risk in the financial markets, regulators need to collect six bits of information about every repo and securities lending transaction, according to a report from four economists at the Federal Reserve Bank of New … Continue reading

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Top dealers to Fed: Flow of credit continues to slow

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Credit in key areas of the repurchase market continued to tighten in the fourth quarter, according to the Federal Reserve’s quarterly survey of senior credit managers at 20 leading Wall Street dealers. The finding furthers a trend that the Fed reseachers … Continue reading

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The media buzz about rehypothecation

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Updated July 30, 2013 Rehypothecation may be the news hook that finally gets the U.S. business press to start covering the repurchase market. Ever since the broker-dealer MF Global filed bankruptcy October 31, and word escaped that $1.2 billion of … Continue reading

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Keep an eye on this quarterly Fed study of repos

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A shortgage of trusted repo collateral is slowing the flow of credit in the U.S. and in Europe, and that trend is showing up in a survey of the repo market now being conducted quarterly by the Federal Reserve. Spotting … Continue reading

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MF Global warning: Financial markets have not been fixed

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The October 31 bankruptcy of MF Global Holdings Ltd., a broker-dealer on Fifth Avenue in New York City, is important news for all Americans because it is a warning: The Dodd-Frank Act, which Congress passed 16 months ago to protect Americans … Continue reading

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Bloomberg details Fed’s three-year bailout frenzy

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Bloomberg News has given us a stunning picture of the frantic efforts by the Federal Reserve to save the credit markets between August 2007 and April 2010. The report doesn’t mention the R-word (repo), even though fear for the repurchase … Continue reading

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Why banks had so much skin in the game

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One of the great surprises of the financial crisis of 2007-2008 was that commercial and investment banks held one-fourth of the mortgage-backed securities they’d supposedly sold to investors. This surprise shot a big hole in the pre-crisis theory that securitization … Continue reading

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Fitch: Shortage of risk-free repo collateral hits prime money market funds

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Prime money market funds, which invest in both corporate and government securities, are increasingly accepting nongovernment securities as collateral for repo loans, according to an August 4 Fitch Ratings survey of the 17 money market funds it rates. The survey did not say what … Continue reading

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Using taxes, fees or haircuts to reform repo

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Americans don’t hear much debate these days on ways to avoid having to bail out the repurchase market again. That’s a problem, because Congress is not likely to act on an issue the American public is not paying attention to. … Continue reading

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Lenders, not borrowers, were the driving force behind the financial crisis

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Editor’s note: RepoWatch would like to recognize Financial Times editor Gillian Tett, whose August 11 column about the Pozsar report proves once again that she is far ahead of other journalists in her understanding of the core issues facing financial … Continue reading

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Risk may move from credit default swaps to repos

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In the financial crisis of 2007-2008, much of the systemic risk that forced federal regulators to inject trillions of dollars into the financial markets to keep them from collapsing was caused by repos and credit default swaps. Now it appears the … Continue reading

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The repurchase market has become Too Big To Fail

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Commentary From the editor: Have the U.S. and Europe reached the point where borrowers can not be allowed to default on their debt, and their lenders or investors can’t be forced to eat any losses, if financial institutions are widely using the debt as collateral … Continue reading

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Have you checked your repo market today?

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One of the best ways for RepoWatch readers to see what’s going on daily in the repo market during the U.S. debt crisis is the DTCC GFC Repo Index. If you check the DTCC index now, you will see that average rates on repo loans collateralized with Treasuries, though still low, … Continue reading