Collateral
Eurozone moving towards ‘single market for collateral’, say central bankers
Panellists from Belgian, French and Dutch central banks discuss moves towards harmonised collateral markets in Europe at conference in Brussels
Repo market coping with liquidity regulations for now, panellists say
Participants at Euroclear’s Collateral Conference say repo markets have delivered new efficiency gains to keep collateral supply up, but the outlook over the coming year looks less certain
BIS committee urges central banks to consider collateral policies ahead of time
Central banks should be aware of the effects of their policies on collateral markets, and use this knowledge to prepare in advance for crises, CGFS report finds
RBA mulls creation of repo CCP
Australia currently lacks a CCP for clearing repos, which could be exacerbating systemic risk and impairing market functioning, but previous efforts met with little enthusiasm
ECB’s collateral move adds pressure to Greek negotiations
Decision to cease accepting some Greek debt as collateral two weeks earlier than necessary turns banks toward ELA and adds pressure to political negotiations
Curbs on rehypothecation may boost welfare, St Louis Fed paper finds
Researchers find rehypothecation boosts welfare, particularly as inflation rises, but it generally goes too far, implying there are benefits to regulatory intervention
Economists at SNB study reuse of collateral
Working paper estimates the level of reuse activity in the Swiss franc report market between 2006 and 2013, before analysing the drivers of it
Swiss paper examines cost of different clearing set-ups
Research finds more sophisticated clearing arrangements for OTC trades can improve welfare – in a Pareto sense – but require more collateral
ECB eases collateral requirements for Greek bonds as borrowing costs soar
European Central Bank says it will reduce the haircut it applies to Greek government bonds, but insists it is not an ‘ad hoc reaction’ to this week’s market stress
National Bank of Denmark narrows range of collateral it accepts
Financial market ‘normalisation' provides ‘opportunity' to omit assets made eligible after crisis to keep Danish banks from borrowing in euros
ESRB paper identifies difficulties in tracing origins of collateral
Occasional paper presents results from two data collection exercises, finding ‘widespread’ use of securities financing transactions and lack of clarity on the reuse of collateral
Mersch: T2S may prompt ‘more global network for mobilisation of collateral assets'
ECB board member says Target2 offers 'possibilities for linkages' between T2S central securities depositories with those 'from other geographical areas'
Conditions ‘in place’ for repo expansion in East Asia and Pacific
Report published by central bankers in the Asia-Pacific region finds that repo markets are ‘not as large as might be expected’, but conditions are in place for them to grow
Polish paper proposes new model for risk of ‘double default' on collateralised loans
Commonly used Gaussian copula-based approach does not properly capture the residual risk to central bank balance sheets posed by correlated defaults
Fed overhauls collateral requirements for discount window
The changes, including separate requirements for fixed-rate and floating-rate loans posted by depository institutions, could make it harder to obtain central bank liquidity
BoE adds ECA-backed loans as acceptable collateral
Loans guaranteed by UK export credit agency UKEF will be accepted under the Bank of England's Sterling Monetary Framework, with a haircut
Polish economist encourages ‘broad’ collateral acceptance
National Bank of Poland’s head of monetary policy analysis identifies risks in central banks adopting an overly loose or overly tight collateral framework
German debt office poised to collateralise swaps
Pending 2014 budget would allow Finanzagentur to post up to €8 billion in collateral
Using assets as collateral increases volatility of returns, Buba paper finds
Bundesbank discussion paper uses model comprising agents differing in their level of risk aversion; negative economic shocks substantially alter wealth distribution between the two
Collateral could be useful tool at zero lower bound, says ECB paper
Working paper shows broader collateral eligibility makes funding conditions easier for banks; notes this could be useful for policy, but central banks should not forget sound risk management
A new and explicit policy on liquidity provision
The Bank of England's new rules on liquidity provision reflect much closer regulation of banks' liquidity policies and a desire to avoid the mistakes of the crisis
ECB's Cœuré backs committed liquidity facility
European Central Bank executive board member suggests a committed liquidity facility could help remove incentives for regulatory arbitrage in the Eurosystem
ECB 'streamlines’ assessment of settlement systems
Eurosystem central banks will use a new framework with ‘considerable procedural simplifications’ to judge whether settlement systems are safe enough to be used in their credit operations
NY Fed trials new reverse repo facility
Federal Reserve Bank of New York tests new overnight reverse repo facility; William Dudley believes it will bolster the Fed’s control over short-term money market rates