Category Archives: Tri-party repo

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NY Fed economist buries the bad news about tri-party repo reform

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Commentary From the editor: To those of you who read the latest from the New York Fed’s Liberty Street economists, Stabilizing the Tri-Party Repo Market by Eliminating the ‘Unwind,’ I hope you read to the end of the piece. At … 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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Proposal: Central clearing for repos

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Central clearing for repurchase transactions could prevent the kind of runs on the repo market that triggered the financial crisis in 2007-2008,  writes Jeff Penney, senior advisor to McKinsey & Company, managing member of financial services consulting firm High Line Advisors, and … Continue reading

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Trade press tackles tri-party repo

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Freelance business journalist Katherine Heires of MediaKat LLC gives us a rare chance to hear directly from inside the changing world of tri-party repo in a Securities Technology Monitor report May 4. Business is growing even as the interworkings of the … Continue reading

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Tri-party repo reform seen as helpful but will not avert 2008-style panic

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JP Morgan Chase and Bank of New York Mellon are making good progress in protecting themselves from the tri-party repo risk that threatened their survival in 2008, but little progress is being made in protecting taxpayers who may have to pick … Continue reading

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Bernanke discusses clearinghouses but not tri-party repo

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Federal Reserve Chairman Ben Bernanke gave an important speech about systemic risk and the “plumbing” of the financial system April 4 and never mentioned the repurchase market. He especially talked about clearinghouses and clearing systems and their importance in managing … Continue reading

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Experts issue studies on repurchase market and systemic risk

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To RepoWatch readers: Some important work related to repos and systemic risk has been pouring out from economists and regulators in the past few days. I’ll be writing about each, trying to highlight the key points in simple language, but … 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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Repo continues long-term growth track in Europe

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The European repurchase market declined 15.3 percent in December, as compared to the prior June, because of the unwinding of some “very large and somewhat specialized transactions,” the European Repo Council reported March 10. The council did not identify the … Continue reading

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RepoWatch roundup of repo data

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Last updated June 26, 2012 RepoWatch’s quarterly roundup of repo data shows a very slow-growing financial market dominated by the mega-banks and still relying largely on collateral that is guaranteed by the U.S. taxpayer: PRIMARY DEALERS (1) Federal Reserve primary dealers, repo volume, … Continue reading

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Moody’s optimistic about tri-party repo reform

Moody’s analysts believe reform of the U.S. tri-party repurchase market now underway should substantially reduce a repeat of the bank runs that triggered the financial crisis of 2007 and 2008, according to a Financial Times report on a Feb. 22 teleconference by credit … Continue reading

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Bernanke emphasizes run on repo and too big to fail

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The biggest threat to the financial system during the crisis was the run on the repurchase market, especially the tri-party operation, Federal Reserve Chairman Ben Bernanke told the Financial Crisis Inquiry Commission in Nov. 17, 2009, testimony just released by … Continue reading

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J.P. Morgan to accept gold as repo collateral

J.P. Morgan Chase will accept physical gold as collateral for tri-party repurchase transactions, the banking giant said Monday. It will also let traders use gold as collateral in securities lending transactions. Bonds and stocks have traditionally been the collateral used … 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

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NYFed economists: Tri-party was surprisingly stable

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Fear for the safety of the tri-party repo market was a key reason for the Bush Administration’s bailout of the financial markets. Now economists at the Federal Reserve Bank of New York have issued a report on how that market … Continue reading

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NYU: Most of the leverage was in repos

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“Repo financing was the basis of most of the leveraged positions of the shadow banks.” From RepoWatch’s view, that’s the key sentence in “Regulating Wall Street,” a November 2010 book authored by New York University Stern School of Business professors Viral … Continue reading

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Tett: Silence on repo reform is “shocking”

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On the second anniversary of the collapse of Lehman Brothers, forced into insolvency by its repo lenders demanding more collateral or refusing to renew their loans, little has been done to reform the repurchase market, writes Gillian Tett, U.S. managing … Continue reading

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The Valukas Report: 2,200 pages about Lehman and repos

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Finally, repurchase agreements are getting some media attention. That’s because examiner Anton Valukas in the Lehman Brothers bankruptcy has accused that company of using Repo 105 and Repo 108 accounting shams to hide debt. Valukas has a whole volume called … Continue reading

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FT: Fed plans revamp of tri-party repo

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The Federal Reserve Bank of New York has recently created a task force to try to build a better plumbing system for the financial markets, the Financial Times reported October 23. The focus of the task force’s work will be … Continue reading