FSB looks to gauge risks around collateral reuse
Reusing collateral brings various benefits, but could also pose stability risks
The Financial Stability Board (FSB) is proposing a range of measures of collateral reuse that it hopes will give supervisors a better picture of potential stability risks.
As part of its work on promoting the resilience of shadow banks, the FSB published a variety of options on February 23 for both measures of collateral reuse and metrics designed to turn them into meaningful financial stability indicators.
Collateral posted as part of securities financing transactions (SFTs) is often eligible
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