Monthly Archives: November 2010

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NYFed publishes road map for shadow banking

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“The rapid growth of the market-based financial system since the mid-1980s changed the nature of financial intermediation in the United States profoundly,” begins the July 2010 study of shadow banking by four economists at the Federal Reserve Bank of New … Continue reading

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Mini-panic hits repos backed by Irish bonds

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LCH.Clearnet, a London-based clearinghouse for financial transactions, said November 10 that borrowers on the repurchase market who used Irish bonds as collateral would have to deposit an extra 15 percent of the transaction in cash to protect the clearinghouse from … Continue reading

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Banks need more equity and less debt

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The chorus of critics who say the new Basel III capital requirements are not going to be nearly strong enough to protect financial markets from another crisis just got a lot louder. Twenty university professors headed by Anat Admati, professor … Continue reading

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“Securitized banking and the run on repo”

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Yale University professors Gary Gorton and Andrew Metrick have published an updated version of their explanation for the financial crisis of 2007 and 2008, in a paper called “Securitized banking and the run on repo.” From the November 9, 2010, … Continue reading

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IMF urges repo reforms

As part of its twice-a-year Global Financial Stability Report, the International Monetary Fund has issued a separate study of ways to reduce systemic risk in financial institutions and markets, including the repurchase market. “The repo market is used by large … Continue reading

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Dutch economist: tax repos’ bankruptcy exemption

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Writing for a leading network of economic researchers in Europe, a Dutch economist is calling for a tax on the exemption that repurchase agreements enjoy in bankruptcy court. The exemption means that when a repo borrower goes bankrupt, the repo … Continue reading