Category Archives: Collateral

Gallery

Using taxes, fees or haircuts to reform repo

This gallery contains 1 photos.

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

Gallery

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

This gallery contains 1 photos.

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

Gallery

Risk may move from credit default swaps to repos

This gallery contains 1 photos.

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

Gallery

The repurchase market has become Too Big To Fail

This gallery contains 1 photos.

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

Gallery

Have you checked your repo market today?

This gallery contains 1 photos.

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

Gallery

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

This gallery contains 1 photos.

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

Gallery

Fear in today’s markets shows failure of Dodd-Frank

This gallery contains 1 photos.

If the financial crisis in 2007-2008 was fundamentally about mortgages, as many believe, why are we facing a similar financial crisis today? Here’s the answer: The fundamental problem three years ago was not mortgages. It was the repurchase market and credit default swaps. … Continue reading

Gallery

JP Morgan: Repos will transmit the shockwave of a U.S. default

This gallery contains 1 photos.

Money market funds, repos and foreign investors will transmit the shockwave of a U.S. default throughout the economy and the government, according to a JP Morgan report. The authors of the report said they think a default is highly unlikely. But if … Continue reading

Gallery

Fitch: Repo could be ‘serious’ threat to money market funds if U.S. defaults

This gallery contains 1 photos.

If the U.S. defaults on its debt payments, a key danger to U.S. money market funds lies on the repurchase market, Fitch Ratings said in a special report July 18. Fitch said it continues to believe an agreement will be reached … Continue reading

Gallery

FT: A U.S. default could threaten world’s ‘plumbing system’

This gallery contains 1 photos.

Finally we have a news story from the mainstream business press that explains the potential dangers of a U.S. default. Congratulations to the Financial Times for its consistent, clear reporting on the repurchase market and for not being afraid to … Continue reading

Gallery

Press reports unclear on dangers of Greek default

This gallery contains 1 photos.

Last updated June 26, 2012 Commentary From the editor: The main reason world finance officials want to prevent Greece from defaulting on its debt is the same reason U.S. officials bailed out the investment banks in 2008:  To prevent a … Continue reading

Gallery

UK regulators warn of dangers in repo mutations

This gallery contains 1 photos.

Repurchase transactions are morphing into riskier forms of collateralized lending, the Bank of England warned in its June 2011 Financial Stability Report. With interest rates continuing at record lows, financial institutions and other investors are looking for ways to juice … Continue reading

Gallery

European repo leader wary of transparency

This gallery contains 2 photos.

The European repo community appears to be worried that regulators will require the repurchase market to become more transparent, based on a top repo official’s comments in a Financial News column June 13. Godfried De Vidts, chairman of the European Repo Council, … Continue reading

Gallery

Some experts are comparing Greece to Lehman

This gallery contains 1 photos.

If eurozone officials decide Greece does not have to repay its debt in full, the European Central Bank says it may stop making repo loans to financial institutions that put up Greece’s debt as collateral, according to a June 10 story by the … Continue reading

Gallery

London conference: More calls to fix bankruptcy exemption for mortgage-backed repos

This gallery contains 1 photos.

The special bankruptcy treatment extended to repurchase agreements in 2005 played a critical role in the financial crisis of 2007-2008, and changes must be made, experts cautioned at a financial conference in London June 1.   The warnings came just … Continue reading

Gallery

U.S. debt default could freeze repo market

This gallery contains 1 photos.

Geithner Last updated June 26, 2012 When Treasury Secretary Tim Geithner says a U.S. default on its debt “would inflict catastrophic, far-reaching damage on our Nation’s economy,” one of his key worries is the repurchase market. That’s because if repo … Continue reading

Gallery

Securitized banking in Europe still stressed

This gallery contains 1 photos.

Securitized banking continues to be under stress in Europe, as can be seen in two unrelated news reports from Financial News on May 6 that show it is getting harder for some financial institutions to raise cash in Europe. In … Continue reading

Gallery

Why couldn’t experts see the coming financial crisis in their data?

This gallery contains 1 photos.

In the years leading up to the financial blowout in 2008, the two most important sets of missing data that could have helped experts spot looming trouble were measurements of (1) mortgage quality and (2) repo volumes and collateral quality, … Continue reading

Gallery

The underbelly of securitized banking is emerging

This gallery contains 2 photos.

The underbelly of securitized banking is showing, as investors and traders fight over the scraps left after the financial crisis of 2007-2008. One battle that has gotten media attention is a class action against JP Morgan Chase, where pension funds that were clients … Continue reading

Gallery

Repo fraud “happens all the time,” says convicted Farkas

This gallery contains 1 photos.

Securitized banking has its first 21st century crook. Lee B. Farkas, chairman of one of the largest privately owned mortgage lending companies in the U.S. when it collapsed in 2009, was convicted by a jury April 19 of a $2.9 … Continue reading