Category Archives: Federal Reserve

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U.S. Regulators: Repo is vital, and it’s dangerous

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In the past three months, U.S. regulators have issued nine warnings about danger in the repo market, a market they repeatedly describe as critical to the worldwide financial system but needing reform. Is anyone listening? The Financial Stability Oversight Council, … Continue reading

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The future looks a lot like the past

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“Regulation of shadow banking is starting to look more and more like regulation of traditional banking 100 to 150 years ago, when it took decades of runs on banks, bank failures and economic agony before  Congress in 1933 finally approved … Continue reading

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NY Fed chief lays it on the line, for bankers and for the rest of us

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It felt like “The Gunfight at the O.K. Corral.” First to appear was departing Treasury Secretary Timothy Geithner, who told Wall Street Journal economics editor David Wessel in a wide-ranging exit interview January 17 that the financial markets are much … 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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The Federal Reserve’s century-long affair with repos

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Latest update: August 4, 2013 The Federal Reserve and the repurchase market are intimate partners in the financial system that delivers credit throughout the U.S. economy. For almost 100 years, they have relied on each other to help reach their … 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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Part 1: Tri-party repo’s problems are deep and unresolved

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The tri-party repurchase market is more vulnerable to panic and abuse and further from being fixed than has previously been understood, based on recent reports. This matters, because tri-party was the chief trouble spot in the financial markets in 2007 … 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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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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Regulators talk tough about tri-party reform

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If the industry task force working to make the tri-party repurchase market more stable in a crisis won’t do the job, regulators may have to do it for them. That tough warning comes from William Dudley, president of the Federal … 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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JPM and BoNY exposed during debt-ceiling crisis

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Editor’s note: It’s a scandal that Bernanke and Geithner handed reform of tri-party repo to  the bankers instead of to Congress and Dodd-Frank and the reform has not been done. Commentary The most vulnerable banks during this U.S. debt-ceiling crisis … Continue reading

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Doubt cast on key tri-party repo reform

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Three years after the financial crisis, Wall Street banks still have not fixed one of the most dangerous flaws in the markets, and they said July 6 they will not be able to meet an October 2011 deadline for reform … Continue reading

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Fed releases names of tri-party repo borrowers at height of crisis

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Bloomberg and Fox News began reporting March 31 the names of the financial institutions that got emergency repurchase loans from the Federal Reserve during the financial crisis. The names became public when the Fed released to the two news groups the reports … Continue reading

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New capital requirements possible for tri-party clearing banks

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The New York finance lawyer who blogs at Economics of Contempt is predicting the Fed will require the tri-party repo clearing banks, JP Morgan Chase and Bank of New York Mellon, to have enough equity, and enough ready cash or … Continue reading

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Bloomberg: Lehman used repos to look healthy when it wasn’t

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Lehman Brothers used repurchase agreements to make $3 billion in loans to itself and make itself look healthy when it was not, said a March 10 Bloomberg News story by Christine Richard and Bob Ivry.  But the transaction, as described … Continue reading

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Fed approves MF Global and SG Americas Securities as Primary Dealers

The Federal Reserve Bank of New York today added two Primary Dealers to the list of 18 broker-dealers approved to repo with the New York Fed. The newly approved dealers are MF Global Holdings Inc. and SG Americas Securities, LLC. … Continue reading

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Fed lowers MMF size for reverse repos

The Financial Times noted today that the Federal Reserve Bank of New York has dropped its size requirements for money market funds that it will do reverse repos with to $5 billion, down from $10 billion. It also reduced minimum … Continue reading

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NYFed adds more money market funds as repo partners

The Federal Reserve Bank of New York today released the names of 32 more money market funds that have been approved to buy securities from the New York Fed, if and when the Federal Open Market Committee decides to start … Continue reading