Category Archives: International repo market

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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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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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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: Shadow bankers and regulators dig in for a long tug of war

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Updated June 18, 2012 RepoWatch recommends the following reports. Search for the topics that interest you: DataWatch, International repo market, Money market funds, Regulation, Repurchase transactions, Securitization, Shadow banking, Too big to fail, and Tri-party repo. Items are arranged chronologically, … Continue reading

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Repos are at the heart of the European distress

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As financial markets convulse over the European Union once again, RepoWatch would like to remind its readers that at the heart of the problem lies the repurchase market. Yes, some European countries spent too much money and now are burdened … Continue reading

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Shadow banking, part 2: Lack of shadow master plan means impact of new rules is uncertain

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The shape of shadow banking reform is now clear. Congress and regulators are going to put a bunch of new rules in place, but they’re not going to articulate a coherent vision of what shadow banking should, or should not, … 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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Part 2: Are JPM and BoNY the best we can do?

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As the Federal Reserve and clearing banks JP Morgan Chase and Bank of New York Mellon struggle to reform the U.S. tri-party repo market, some students of the system think it might be better to install an independent middleman rather … 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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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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To understand the financial crisis, read this book

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Book Review If you only read one book about the financial crisis, read “The Fall of the House of Credit” by Alistair Milne, a professor of financial economics at Loughborough University in Leicestershire, UK, north of London. This book, which … Continue reading

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WSJ steps up its repo coverage

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With no repo reform on the horizon, the European financial crisis threatens to erupt into a full-blown panic, Wall Street Journal reporter Kelly Evans wrote last week. While this is not news to RepoWatch readers, it’s big news to readers … Continue reading

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European repo market continues rapid growth

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While the U.S. repo recovery has lagged since the 2008 crisis, the European repurchase market has been expanding for two years and rose rapidly in the first half of 2011, according to a biannual survey by the European Repo Council. Fifty-five survey respondents reported that the value of … Continue reading

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Reuters: U.S. banks making repo loans to European banks

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Reuters reports U.S. banks have agreed in recent weeks to make billions of dollars of repurchase loans to European banks, contrary to the official word from U.S. regulators that American banks have reduced their exposure to European banks to a minimum … Continue reading

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Reuters: Repo participants are getting cautious

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Reuters news service reports some traders believe another run on repo has begun. Meanwhile, data tracked by RepoWatch shows a mild tightening. From an August 30 article by Reuters reporter Karen Brettell: Pockets of the fixed income and money markets … Continue reading

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Economists: Repos underlie financial crisis in Europe

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The financial crisis in Europe grows out of banks’ excessive use of repos and their assumption that government officials will not let the repurchase market fail, according to a July 2011 report by two economists. In “Europe on the Brink,” economists Peter Boone and Simon … 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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Watching U.S. money market funds for signs of a run on EU repo

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New reports from Fitch Ratings and the Financial Times say U.S. money market funds are cutting their exposure to European banks, presumably to protect themselves in the event of a full-blown EU debt crisis. But neither report answers a critical question … Continue reading

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If there’s an EU credit panic, repos could transmit it to U.S. banks

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Money market funds, interbank lending and the repurchase market would likely be the key sources of contagion for U.S. banks if Europe’s debt problems panic the credit markets, according to a July 21 article by Jeff Horwitz at the American … 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