• Fed Adds $81.4 Billion in Short-Term Liquidity to Markets, by @michaelsderby in @WSJmarkets - #repo - Link
    FinReg Alert Tue 10 Dec 2019 02:50

    The Federal Reserve Bank of New York added $81.4 billion in temporary liquidity to financial markets.

    Monday’s intervention came in two parts. One was via overnight repurchase agreements, or repos, that totaled $56.4 billion. The other came in a $25 billion 28-day repo aimed at providing liquidity over year’s end.

    The Fed took all securities...

  • There’s the Legend of #PaulVolcker and the Man I Got to Know, by @cr_harper in @business - Link
    FinReg Alert Mon 09 Dec 2019 22:25
  • A Remembrance: The Pragmatism of #PaulVolcker comment by @greg_ip in @WSJ - Link
    FinReg Alert Mon 09 Dec 2019 22:04

    When I started covering the Federal Reserve in 2001, Paul Volcker had long since left the building, and yet he was everywhere. Every time he spoke, he made news.

    Troubled organizations tapped him when they needed a fixer whose personal integrity and moral clarity were beyond reproach. In 2008, President-elect Barack Obama appointed him head of his outside economic advisory board. His successors regularly paid him homage for defeating inflation.

    ...
  • There’s the Legend of #PaulVolcker and the Man I Got to Know, by @cr_harper in @business - Link (cc: @NormOrnstein)
    FinReg Alert Mon 09 Dec 2019 21:54
  • #blastfromthepast #RIPPaulVolcker - (cc: @Spencerjakab) Link
    FinReg Alert Mon 09 Dec 2019 21:49

    You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

  • #blastfromthepast #RIPPaulVolcker - (cc: @gilliantett, @CardiffGarcia, @M_C_Klein, @SamRo) Link
    FinReg Alert Mon 09 Dec 2019 21:49

    You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

  • #blastfromthepast #RIPPaulVolcker - (cc: @izakaminska) Link
    FinReg Alert Mon 09 Dec 2019 21:49

    You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

  • #blastfromthepast #RIPPaulVolcker - (cc: @gilliantett, @CardiffGarcia, @M_C_Klein) Link
    FinReg Alert Mon 09 Dec 2019 21:44

    You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

  • How the Discount Window Became a Pain in the #Repo Market - Link
    FinReg Alert Mon 09 Dec 2019 19:14

    By David Benoit November 21, 2019, The Wall Street Journal

    Banks have all but abandoned the Federal Reserve’s discount window, and it is straining Wall Street’s post-crisis infrastructure.

    Borrowing from the discount window, the Fed’s only channel for lending directly to banks, has plummeted. Through October, banks are on pace to borrow just $750 million from the Fed this year, half of last year’s total and well below the record low of $940 million set in 1961.

    full article

  • Fed Officials Weighed Money Market Control Strategies at October Meeting - Link
    FinReg Alert Mon 09 Dec 2019 19:09

    By Michael S. Derby November 20, 2019, The Wall Street Journal

    Federal Reserve officials at their October policy meeting weighed but didn’t settle on strategies that could provide a more enduring fix to the money-market interest-rate volatility that flared in September.

    Minutes from the Oct. 29-30 meeting showed central bankers split on whether they should commit to continuing to add liquidity on a temporary basis via repurchase agreements, or repos, or whether they needed to adopt a bolder solution to ensure short-term rate markets remain calm.

    full article

  • Fed loosens supplementary leverage ratio rules - Link
    FinReg Alert Mon 09 Dec 2019 19:04

    By Perle Battistella November 20, 2019, Global Investor Group

    U.S. federal bank regulatory agencies have completed changes to a capital requirement for banks involved in custodial services, proposed in the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA) in April.

    The Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency agreed the Act which states that banks involved in asset servicing, custody and safekeeping activities should exclude qualifying deposits at certain central banks from their supplementary leverage ratio calculations.

    full article

  • U.S. regulators approve SA-CCR rule - Link
    FinReg Alert Mon 09 Dec 2019 18:59

    By Sharon Thiruchelvam November 20, 2019, Global Investor Group

    U.S. regulators have finalized rules for derivatives contracts, under the “standardized approach for measuring counterparty credit risk,” (SA-CCR) to reflect market feedback given through a consultation this year.

    The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency announced the finalized rule, which will take improvements in the governance of the derivatives markets, such as central clearing and margin requirements, into account, yesterday.

    full article

  • Top Republican asks Mnuchin to probe Warren’s proposal to tax stock trades - Link
    FinReg Alert Mon 09 Dec 2019 18:54

    By Megan Henney November 21, 2019, Fox Business

    A top Republican is seeking additional answers on the potential impact of a financial transaction tax on the markets and U.S. economy.

    In a letter obtained by FOX Business, Ranking Member of the House Financial Services Committee Patrick McHenry asked Treasury Secretary Steven Mnuchin to analyze the effects of a new levy on stock trades – a policy favored by several Democratic presidential candidates, including Elizabeth Warren and Bernie Sanders.

    full article

  • Regulators tell derivatives industry to find #Libor consensus - #benchmarks #RFRs - Link
    FinReg Alert Mon 09 Dec 2019 18:49

    By Huw Jones November 19, 2019, The Wall Street Journal

    Regulators have told the world’s derivatives market that it must find a common approach for dealing with a sudden death of Libor, the tarnished interest rate benchmark used for pricing contracts worth more than $300 trillion globally.

    Libor became discredited after big investment banks were fined billions of dollars for trying to rig Libor or London Interbank Offered Rate, a benchmark that reflects the cost of borrowing among banks.

    full article

  • Sell-Side Preps for Next CAT Deadline - Link
    FinReg Alert Mon 09 Dec 2019 18:44

    By Rob Daly November 19, 2019, Markets Media

    When the U.S. equities and options markets begin their report-submissions testing for the Securities and Exchange Commission’s Rule 613 Consolidated Audit Trail on December 16, the sell-side firms are much more prepared than their European counterparts were in meeting their MiFID deadline, according to industry observers.

    “The difference is that MiFID touched every piece of the workflow and multiple European exchanges were going in different directions,” Linda Middleditch, executive vice president, head of product strategy at Itiviti, told Markets Media. “They were not unified in their implementations and were often late in announcing how they were going to implement it. You were dealing with quite a moving target.”

    full article

  • #Fannie, #Freddie Regulator Launches Process for New Capital Requirements at Mortgage Finance Firms - Link
    FinReg Alert Mon 09 Dec 2019 18:39

    By Andrew Ackerman November 19, 2019, The Wall Street Journal

    Fannie Mae and Freddie Mac’s federal regulator kicked off a process for the mortgage finance companies to raise enough capital for them to return to private ownership.

    The Tuesday announcement by the Federal Housing Finance Agency is a sign it thinks the companies likely need more than $180 billion in capital previously envisioned by the agency in 2018. At present, Fannie currently holds $6.4 billion in capital and Freddie holds $4.8 billion, according to the FHFA, far less than what they will need to eventually exit government control.

    full article

  • SEC revisits security-based swaps proposal - Link
    FinReg Alert Mon 09 Dec 2019 18:34

    By Robert Mackenzie Smith November 19, 2019, Risk

    The U.S. Securities and Exchange Commission is reworking its 2011 proposal on security-based swaps. New trading rules could be out for comment in the coming months, say industry sources.

    “We met with the SEC recently and they’re going to be publishing [new] rules about security-based swaps pretty soon,” says a senior figure at a swap execution facility (SEF).

    full article

  • Major banks mutualize #FRTB risk data - Link
    FinReg Alert Mon 09 Dec 2019 18:29

    By Sharon Thiruchelvam November 18, 2019, Global Investor Group

    The global industry utility Depository Trust & Clearing Corporation (DTCC) today launched a scheme that will give banks empirical data for the Fundamental Review of the Trading Book (FRTB) risk analysis, potentially leading to cost savings in the range of tens of millions.

    The scheme anonymizes, consolidates and standardizes historical transactions from existing derivative reporting infrastructure into a centralized data pool that banks can use, with their own trade data, to more effectively calibrate capital allocations by maximizing risk factor eligibility and reducing non-modellable risk factor (NMRF) results.

    full article

  • ISDA updates #IBORs fallback definitions - Link
    FinReg Alert Mon 09 Dec 2019 18:24

    By Sharon Thiruchelvam November 18, 2019, Global Investor Group

    The derivatives market has agreed technical details for two approaches to final parameter adjustments for derivatives fallbacks for interbank offered rates (IBORs).

    The majority of the market prefers a ‘historical median approach’ over a five-year lookback period, with no transitional period for spread adjustment calculation and not including outliers and negative spreads.

    full article

  • ICMA to update buy-in rules ahead of #CSDR - Link
    FinReg Alert Mon 09 Dec 2019 18:19

    By Oliver Wade November 15, 2019, Global Investor Group

    The International Capital Market Association (ICMA) will amend its buy-in rules to support the implementation of Europe’s Central Securities Depositories Regulation (CSDR) mandatory buy-in provisions.

    ICMA’s buy-in rules are part of its Secondary Market Rules & Recommendations which are widely relied upon by ICMA members in the international bond markets and they automatically apply to trades in international securities between ICMA members.

    full article

  • RT @Tradeweb: Chart of the Week ?: Realized volatility for the 2Y U.S. Treasury note is collapsing, though longer maturities remain relativ…
    FinReg Alert Mon 09 Dec 2019 18:14
  • #Libor’s Death Will Sting #Derivatives Dealers, new comment to @FinRegAlert via @banktraderisk + @TabbFORUM - #RFRs #benchmarks - Link https://t.co/k6BDzSCcab
    FinReg Alert Mon 09 Dec 2019 17:04
  • Investors Gird for Year-End Turmoil in Cash Markets - #repo - Link
    FinReg Alert Mon 09 Dec 2019 16:34

    By Daniel Kruger and Julia-Ambra Verlaine December 8, 2019, The Wall Street Journal

    Investors and policy makers are bracing for new disruptions to short-term cash markets going into the end of the year.

    Federal Reserve officials have so far committed about $350 billion to efforts aimed at calming the market for overnight repurchase agreements, or repos, where banks and other firms borrow cash for short periods in exchange for collateral, such as supersafe government securities. That includes injecting cash into money markets for the first time since the financial crisis and buying Treasury bills, a move some investors have compared to the post-crisis quantitative easing.

    full article

  • #Repo Market Minnows Say Fixing the Mess Means Going Beyond Big Banks - Link
    FinReg Alert Mon 09 Dec 2019 16:19

    By Alex Harris and Edward Bolingbroke December 6, 2019, Bloomberg

    If September’s dysfunction in the market for repurchase agreements has revealed anything, the biggest impediment is the dominance of a few institutions, according to a group of non-primary dealers.

    The Independent Dealer and Trader Association, a group of nine mid-sized securities firms led by Wall Street veteran James Tabacchi, has proposed several options to reduce how much the funding market relies on just a few players and alleviate volatility spikes.

    full article

  • #Repo Blowup Was Fueled by Big Banks and Hedge Funds, BIS Says - Link
    FinReg Alert Mon 09 Dec 2019 16:04

    By Liz McCormick December 8, 2019, Bloomberg

    The September mayhem in the U.S. repo market suggests there’s a structural problem in this vital corner of finance and the incident wasn’t just a temporary hiccup, according to a new analysis from the Bank for International Settlements.

    This market, which relies heavily on just four big U.S. banks for funding, was upended in part because those firms now hold more of their liquid assets in Treasuries relative to what they park at the Federal Reserve, officials at the Basel-based institution concluded in a report released Sunday. That meant “their ability to supply funding at short notice in repo markets was diminished.”

    full article

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