Progress Report from the New York Fed's Tri-Party Repo Task Force

Saturday, June 27, 2015

The Federal Reserve Bank of New York’s Tri-Party Repo Infrastructure Reform Task Force issued a progress report on June 24, 2015. The report touts some impressive progress since the task force’s last update in 2014, including the implementation of the task force’s new settlement regime by the major tri-party clearing player, Bank of New York Mellon.  “…Earlier this spring, Bank of New York Mellon completed the final piece of its new settlement process for triparty repo, achieving a number of reform goals and serving to bring all triparty repo trades into alignment with the roadmap originally laid out by the Industry Task Force back in 2012. As a result, the share of triparty repo volume that is financed with intraday credit from a clearing bank has dropped markedly, from 100 percent as recently as 2012, to a level averaging 3 to 5 percent today (as compared with the Task Force’s original target of no more than 10 percent). Clearing ...

BIS Forms Consultation Committee to Address FX Practices

Sunday, May 31, 2015

Amidst the series of legal settlements in recent months by global banks for forex market manipulation, the  Bank for International Settlements (BIS) has announced that it will set up a working group under its Markets Committee to study improvements in the foreign exchange markets.  

BIS Progress Report on Basel Framework Implementation

Sunday, May 17, 2015

At the end of April, the Bank for International Settlements (BIS) issued its eighth progress report on the adoption of the Basel regulatory framework.  This report provides a high-level overview of the progress made by Basel Committee member states in adopting the Basel II, Basel 2.5, and Basel III framework as of the end of March 2015.  

Office of Financial Research Seeks Better Securities Lending and Repo Data

Tuesday, April 28, 2015

Prior to the financial crisis, regulators only had limited data available to them about securities lending and repo markets.  The crisis exposed a number of vulnerabilities previously not recognized as a result of this lack of data.  Right away, regulators realized that the only way to understand and effectively address these weaknesses -- leverage and liquidity risks, weak market infrastructure, and fire sale risks — was to obtain more and better regulatory data about securities lending and repo volume, the types and quality of collateral being employed, and how securities lending and repo fit into firms’ risk management processes.  But a recent release by the Office of Financial Research says these data collection efforts are not enough.  According to the OFR, despite the efforts of regulators, significant gaps remain, and "the risk of set fire sales before or after a counterpart default remains largely ...

A Revised Fiduciary Standard Proposal from the DOL

Tuesday, April 14, 2015

On April 14, 2014, the Department of Labor issued its long awaited reproposal of fiduciary standards for advisors of ERISA retirement plans.   These new rules propose to expand the scope of the the definition of fiduciary under ERISA in order to capture more of the current services of 401(k) and IRA providers.  

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